Intelligent storage: the missing link in India’s energy transition

India’s energy story is undergoing a constantly evolving transformation. From being a country heavily reliant on fossil fuels to aggressively pursuing renewable energy alternatives, India’s trajectory is both visionary and challenging. However, for all the optimism surrounding renewable energy from massive solar parks and wind farms, and from net-zero targets, one critical truth that often goes unnoticed is that no sustainable energy transition is complete or secure without an indigenously-developed energy storage and management system. How to store and distribute the energy, to make it a more competitive alternative than fossil fuels, still requires much advancement.

At present, India is the world’s third-largest energy consumer, as per International Energy Agency figures, with coal contributing to almost half of the installed electricity generation capacity according to the CEA [Central Electricity Authority, of India] and NPP [National Power Portal]. While generation capacity from renewables has grown steadily, and commendable strides have been made to reduce the cost of solar cells, for example, our ability to store, intelligently manage, and distribute that energy still remains a massive challenge. This gap isn’t just a technical bottleneck but also a strategic vulnerability that requires much attention across the entire renewable energy value chain.

Energy storage is vital

A wise man once said the sun doesn’t shine at night and the wind doesn’t always blow. The core challenge with renewables lies in their intermittency. For renewable energy to completely replace fossil fuels, especially in grid applications and transport, we need to be able to store surplus power and deploy it on demand. Battery energy storage systems solve this problem but energy storage in isolation is not enough.

The actual intelligence lies in BMS, which manage the integration of hardware, firmware, and analytics that manage how batteries are charged, discharged, cooled, balanced, and monitored. In essence, BMS are what determines a battery’s performance, safety, lifespan, and interoperability with the grid.

Crisil Ratings this year said India’s storage-backed renewable energy capacity is expected to increase from near zero, in fiscal year 2025, to 25 GW to 30 GW by fiscal year 2028. This accounts for over 20% of all expected renewable energy additions in that period. Yet, most of the underlying BMS technology, which manages the renewable energy architecture, is currently imported from countries like China.

National security risks

The dependence on imported BMS technology, particularly from geopolitical rivals like China, raises an urgent national security question. Modern BMS platforms are not standalone devices but are cloud-connected, embedded with telemetry modules that gather, transmit, and even allow remote control and diagnostics of performance data. This offers significant benefits in predictive maintenance, analytics, AI and ML [machine learning] driven optimization, and distributed grid balancing. However, it also means that if the underlying software or firmware is foreign-made, it could be exposed to remote manipulation or cyber intrusion.

In fact, as recently as May 16, 2025, The Economic Times published a story that there were reports that China had allegedly installed instant kill-switches in solar panels sold to the West. It is not difficult to imagine a scenario where a foreign-made BMS used in EVs [electric vehicles], solar inverters, or grid-scale storage is disabled or, worse, weaponized during a geopolitical face-off.

Drawing parallels from the telecom and defence sectors, digital sovereignty is no longer optional. While the chances of such a black swan event are low, if we extrapolate and draw parallels, under no circumstances would we allow a rival state to control our missile defense systems. Then why would we allow them access to the control layer of our energy grid? This isn’t a merely hypothetical thought experiment but an ongoing and evolving reality.

India has already taken such steps and restricted certain Chinese telecom vendors from sensitive infrastructure, citing similar concerns. The logic should also extend to energy storage too, which is considered critical infrastructure.

Developing indigenous BMS

There is also a strong economic rationale, as well, to developing an indigenous BMS. India’s BMS market was valued at $278 million in 2024 and is projected to reach $1.2 billion by 2033, growing at a CAGR [compound annual growth rate] of 17.9%, as per the IMARC [International Market Analysis Research and Consulting] Group in 2025.

With the increasing adoption of rooftop solar, EVs, commercial and industrial (C&I) storage systems, and rural microgrids, demand for efficient, cost-effective BMS will accelerate across segments. India is already making strides in battery cell manufacturing, with gigafactory projects led by Reliance, Amara Raja, and others already underway. However, BMS which is the “brain” of energy storage, still remains largely overlooked in policy frameworks, and this needs to change.

If we are to truly achieve atmanirbharta [self reliance] in energy production and distribution, we must build out the entire value chain of cells, packs, electronics, software, and platforms.

Indigenous BMS development offers distinct advantages across multiple dimensions. For one, systems can be designed specifically for Indian conditions, optimizing for high temperatures and variability in environments, grid instability, and deployment in rural settings. Local manufacturing also enables cost efficiency through reduced import duties, efficient supply chains, greater customization, and streamlined after-sales support, ultimately lowering total lifecycle costs. Crucially, domestic development also ensures IP [intellectual property] ownership, positioning India to become a global exporter of BMS technology rather than a perpetual importer. Finally, it catalyzes high-value employment through R&D and advanced manufacturing, driving national capability in power electronics, embedded systems, and firmware innovation.

Smarter, cleaner, safer grids

Modern BMS platforms now integrate machine learning and artificial intelligence to optimize performance in real-time. They collect high-frequency data from every cell in a battery pack, analyse historical load profiles, predict degradation patterns, and adjust settings accordingly. These capabilities are crucial for grid balancing, time-of-day tariff optimization, optimal state-of-charge, and distributed energy management systems. Envision a smart BMS that has the ability to keep a solar battery fully charged ahead of an anticipated three-day monsoon, or automatically limits feed-in to the grid during low-demand hours. These aren’t just efficiencies but enablers of grid resilience and carbon reduction at scale, driving faster net-zero transitions.

India is globally perceived as a software powerhouse and is uniquely positioned to develop BMS platforms tailored for domestic and export markets. Indigenous development not only reduces cost and risk and unlocks innovation but also serves as a huge opportunity for untapped revenue potential via export.

Policy alignment is critical

The need of the hour is a focused policy and industrial push to nurture indigenous BMS capabilities. Much like the government’s production-linked incentive scheme for advanced cell chemistry battery storage, a parallel incentive structure could be instrumental in accelerating domestic BMS design, development, and adoption. This could include R&D grants and robust testing infrastructure to help Indian startups meet global performance and safety benchmarks.

Additionally, integration mandates in public EV tenders, C&I storage projects, and government-backed solar initiatives could ensure Indian BMS technologies are prioritized, wherever feasible.

Finally, implementing mandatory cybersecurity certifications for BMS systems used to operate critical infrastructure would ensure operational control remains firmly within Indian control. By investing in this foundational layer of energy intelligence, India can position itself not just as a hub for battery production but as a leader employing global best practice in the renewable energy transition.

To conclude, let us learn from trial and error and the decisions made while developing the telecom, defence, aviation, or semiconductor ecosystems. India’s energy future is not just about power generation but also about how to effectively control, store, and manage its usage. As we race toward our 2070 net-zero goal, indigenous renewable energy solutions should not just be a development goal but a national imperative.

About the author: Satish Reddy, is founder and CEO of Xbattery.

From pv magazine India.