India's battery energy storage sector is expanding rapidly through government policy support, declining costs, and diverse market participation, driving down prices and fostering innovation while requiring careful oversight to maintain quality standards.
20 Dec 2025 | 4513 Views | By Pratik Kamdar, Neuron Energy
India’s battery energy storage market is rapidly evolving from an emerging concept into a vibrant, competitive sector. Strong policy support, ambitious renewable energy targets, falling technology costs, and growing private-sector participation have transformed the landscape. This competition benefits the economy and energy system by lowering costs, improving quality and innovation, ...
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India’s battery energy storage market is rapidly evolving from an emerging concept into a vibrant, competitive sector. Strong policy support, ambitious renewable energy targets, falling technology costs, and growing private-sector participation have transformed the landscape. This competition benefits the economy and energy system by lowering costs, improving quality and innovation, and strengthening grid reliability.
A Growing Market Backed by Clear Targets
India’s renewable energy ambitions are a major driver of energy storage demand. The government’s target of 500 gigawatts (GW) of renewable capacity by 2030 marks a substantial increase from current levels, and storage is essential for reliably integrating variable renewable energy into the grid.
Since 2018, India has tendered 171 gigawatt-hours (GWh) of storage capacity, including more than 55 GWh in the first half of 2025 alone. These include stand-alone battery projects as well as hybrid systems paired with solar or wind.
In Q1 2025, stand-alone energy storage tenders reached 6.1 GW, accounting for 64 per cent of all utility-scale storage tenders in that period. These tenders send clear demand signals to manufacturers, developers, and investors, demonstrating that storage is now a central component of India’s power system planning.
Policy Frameworks and Incentives Driving Competition
Government initiatives have made storage projects more viable. Viability Gap Funding (VGF) reduces capital costs, while extended transmission charge waivers for storage linked to renewables further improve project economics.
As a result, bids are coming not only from traditional power utilities but also from specialised storage companies and new entrants. Utilities and independent power producers (IPPs) are competing on price, technology, and service offerings — driving down tariffs and expanding technical options for buyers.
Cost Declines and Technology Improvements
Global battery prices have sharply declined over the past decade, and India is benefiting from this trend. Lower costs make battery energy storage systems (BESS) competitive with traditional grid-balancing tools, enabling applications such as renewable firming, peak management, and grid support.
In 2024, India commissioned 178 megawatt-hours (MWh) of battery storage and floated tenders totalling 67 GWh. Projections indicate that BESS capacity could grow to about 250 GWh by 2032, supported by nearly INR 4.79 lakh crore in investments. These numbers underscore both the speed of market expansion and the growing viability of new business models.
Diverse Participants Raising the Bar
Competition is also increasing because of the diverse mix of players entering the sector. Large energy conglomerates, state utilities, global technology firms, and domestic specialised storage companies are all bidding for tenders. This diversity drives innovation in battery management systems, modular designs, life-cycle services, and second-life applications.
For buyers, this translates into more choice, better performance guarantees, and stronger warranties. For the broader market, it brings in new investment and supports localisation of manufacturing — strengthening supply-chain resilience and creating jobs.
Why Competition Matters
Lower costs and better quality:
Competitive bidding brings down the levelised cost of storage. Developers optimise engineering, procurement, and delivery to offer lower tariffs, while buyers can demand higher performance standards.
Innovation across the value chain:
Companies differentiate through technology, spurring advancements in battery chemistries, management software, predictive maintenance, and integration with renewable forecasting. This extends system lifetimes and improves reliability.
Reduced delivery and execution risk:
A competitive market reduces dependence on any single supplier. If one vendor faces delays or financial stress, others can step in. This resilience is essential given the scale of storage required for India’s renewable expansion.
Addressing Market Challenges
Competition can turn unhealthy if bids are pushed to unsustainably low levels, risking execution delays or compromised quality. Industry observers have raised concerns about record-low tariffs. To ensure healthy competition, policymakers must enforce strong technical criteria and phased procurement processes that safeguard quality without limiting participation.
Conclusion
Competition in India’s battery energy storage market reflects the sector’s maturity and strategic importance. By enabling cost reductions, driving innovation, expanding choice, and improving grid reliability, it accelerates India’s transition to a cleaner and more resilient energy system. Continued policy support and thoughtful market oversight will ensure that competitive forces deliver long-term value for all stakeholders.
Pratik Kamdar is the Co-Founder & CEO of Neuron Energy. Views expressed are the author's personal.