India’s energy storage market set for breakout year in 2026

India’s energy storage system industry is expected to move from tendering to execution in 2026, according to a new report from the India Energy Storage Alliance (IESA).

As of Dec. 31, 2025, a total of 224 GWh of energy storage capacity had been tendered, comprising 92 GWh of battery energy storage systems and 132 GWh of pumped hydro storage. Of that total, 95 GWh is in various stages of execution, 80 GWh remains under tender, and 47 GWh of tenders have been canceled.

The report notes that 2025 marked an unprecedented year for tendering activity, with 69 tenders totaling 102 GWh issued during the year. That volume was nearly equal to the combined total of tenders issued between 2018 and 2024. Projects awarded since mid-2023 are expected to begin commissioning in 2026, in line with standard project development timelines of 18 to 24 months.

“All eyes will remain on whether the performance of these projects is in line with what was committed,” said Debmalya Sen, president of IESA. “2026 will be the year when a number of projects enter the operational phase. The next challenge is financing these projects, especially those with low tariffs.”

According to the report, only 0.7 GWh of battery energy storage capacity was operational in India as of 2025, with an additional 2 GWh expected to come online by December 2026.

However, the report warns that aggressive pricing has raised concerns about project viability.

“At present, only a few projects from the plethora of tenders have secured financing,” Sen added. “Whether all projects will see the light of day will remain a question until they are delivered.”

IESA identified March 2026 as a key milestone, when Adani is expected to commission a 1,126 MW, 3,530 MWh battery energy storage system project in Gujarat. Rajasthan is expected to issue a tender in January for a large solar-plus-battery project at Pugal Solar Park. The commercial and industrial segment has also begun to emerge, following Juniper Green Energy’s commissioning of a 60 MWh merchant battery project in December.

“The transition from tendering to execution in 2026 represents a watershed moment for India’s energy storage sector,” said Vinayak Walimbe, managing director of Customized Energy Solutions. “While the aggressive tariff compression we witnessed in 2025 demonstrates market confidence, the real test lies in delivering these projects at promised price points amid battery cost uncertainties and financing constraints. Success in 2026 will require not just competitive bidding, but operational excellence, innovative financing structures, and supply chain resilience. The industry must now prove that India can execute at scale what it has successfully tendered.”

The report also highlights policy support, including a second tranche of viability gap funding worth INR 5,400 crore to support 30 GWh of standalone battery projects, alongside a requirement for 20% domestic value addition. Interstate Transmission System charge waivers have been extended through 2028 for pumped storage and solar-plus-battery projects. Several states have introduced additional requirements, including Rajasthan’s mandate that renewable projects above 5 MW include energy storage, and Bihar’s target of 6.1 GWh of storage capacity by 2030.

IESA cautioned that uncertainties remain, particularly around battery costs. The report noted that tightening trade policies and export restrictions on battery materials could undermine the assumptions underpinning ultra-low tariffs awarded in recent tenders.

From pv magazine India