India installed over 341 MWh of battery energy storage systems (BESS) in 2024, marking an over sixfold increase from the 51 MWh installed in 2023, according to Mercom India Research’s newly released report India’s Energy Storage Landscape.

With these additions, India’s total installed battery energy storage capacity stood at approximately 442 MWh as of December 2024.

Around 60% of the installed capacity came from solar systems combined with battery storage, 36% from renewable energy integrated with round-the-clock capabilities, approximately 4% from standalone BESS, and the 0.05% of the capacity from floating solar with storage projects.

Raj Prabhu, CEO at Mercom Capital Group, stated, “India’s energy storage sector made significant progress in 2024, but it still has a long way to go to catch up with its global peers. The government’s mandate to co-locate storage with solar projects is a major catalyst. Requiring a two-hour system covering 10% of installed capacity is a strong, clear directive that has energized the market. It is already translating into market activity, with tenders and auctions gaining traction, along with a growing pipeline of projects. What we are seeing now is the beginning of a market shift with storage becoming central to India’s renewable energy strategy.”

Karnataka led in cumulative BESS installations with 36% of the total capacity, followed by Chhattisgarh with 27% and Gujarat with 17% in terms of installed energy storage capacity.

Priya Sanjay, Managing Director of Mercom India, stated, “The opportunity to efficiently utilize the full potential of renewable energy projects, falling battery costs, and technology developments has helped scale storage capacity additions. BESS can be used dynamically, including for round-the-clock power supply, meeting peak power demand, peak shaving, saving cost by using stored power during peak hours, replacing diesel generators, and more.”

Policy measures such as viability gap funding (VGF), energy storage obligations, and increased budget allocations for pumped storage projects (PSPs) have supported this growth.

India has also added 4.7 GW of PSP capacity to date.

In terms of project pipeline, nearly 4 GWh of standalone BESS, over 4 GW of solar-plus-storage, and more than 16 GW of renewable energy-plus-storage projects were under development. Additionally, more than 51 GW of PSPs were in various stages of planning, 37 GW under survey and investigation, and 14 GW under development.

Gujarat currently has the highest standalone BESS capacity under development, followed by Maharashtra and Rajasthan. This growth has been supported by favorable renewable energy policies and the mandated annual energy storage obligations that extend through the financial year 2030 in these states.

In 2024, government agencies issued tenders for energy storage systems totaling nearly 27 GW, and around 17 GW of projects were auctioned, including standalone storage and projects combined with renewable energy. The number of solar-plus-storage tenders increased by 118% year-over-year in 2024, reflecting the growing demand for hybrid renewable energy solutions.

India’s energy storage investments also accelerated in 2024. Corporate funding in the sector reached over $174 million (~₹14.7 billion).

Sanjay noted that the banking sector’s willingness to lend to energy storage projects depends heavily on how it perceives risk. In the early days of solar, projects faced high interest rates due to uncertainty, but as the technology matured and projects performed per expectations, lending terms improved. A similar trend is expected for battery storage as the market matures.

Initiatives such as viability gap funding, production-linked incentives for domestic manufacturing, and the mandatory 20% storage requirement in new projects are providing market certainty. These measures are likely to drive down costs further and boost overall deployment.

For more information, visit: https://mercomindia.com/research/

Mercom India’s Energy Storage Landscape, 2024 report is 105 pages long and covers all facets of India’s energy storage projects. For the complete report, visit: https://www.mercomindia.com/product/india-energy-storage-landscape-2024