The year 2026 is expected to mark a turning point for India’s energy storage sector. According to a new study by the India Energy Storage Alliance (IESA), the country’s battery energy storage capacity is projected to rise nearly tenfold to around 5 GWh in 2026, compared to just 507 MWh in 2025. This sharp jump will be driven by large-scale projects that were awarded earlier and are now approaching completion.

Record tendering activity lays the foundation

The IESA report highlights that 2025 witnessed unprecedented tendering activity in the energy storage space. A total of 69 tenders were issued during the year, covering a massive capacity of 102 GWh. Remarkably, this figure alone matches the combined tenders issued between 2018 and 2024.

These tenders are now set to translate into on-ground execution. Projects awarded after 2023 typically have completion timelines of 18–24 months, making 2026 the year when most of them will become operational.

Work to begin on 60 GWh of projects

IESA noted that 2026 will be the phase when the sector moves decisively from planning to execution. Battery energy storage capacity is expected to scale up rapidly, jumping from 507 MWh in 2025 to nearly 5 GWh in 2026.

The report adds that work will begin on projects totaling around 60 GWh during the year. Meanwhile, the cumulative capacity of ongoing projects had already grown by 84% in 2025, reaching 224 GWh—signaling strong momentum across the sector.

Performance and funding will be closely watched

IESA President Debmalya Sen said that while capacity growth is encouraging, attention will now shift to execution and performance. He noted that many projects are expected to go live in 2026, but funding will be a key challenge, especially for projects awarded at lower tariffs.

One of the most significant developments in 2025 was a sharp decline in tariffs. The tariff for a 2-hour standalone Battery Energy Storage System (BESS) fell from ₹2.21 lakh per MW per month at the beginning of the year to ₹1.48 lakh per MW per month by year-end. Similarly, tariffs for 4-hour solar-plus-BESS projects dropped to ₹2,702.76 per unit. This steep fall surprised the industry and intensified competition, with more than 50 new bidders entering the market.

Big projects to test the sector in 2026

A major milestone is expected in March 2026, when Adani is set to commission one of the world’s largest single-location BESS projects in Gujarat. The project will have a capacity of 1,126 MW / 3,530 MWh and is expected to serve as a crucial test case for large-scale storage deployment in India.

India’s largest solar-plus-BESS tender coming soon

The momentum is set to continue in early 2026, with a tender scheduled in January for India’s largest solar-plus-BESS project at the Pugal Solar Park in Rajasthan. The commercial and industrial segment is also picking up pace, especially after Juniper Green Energy commissioned a 60 MWh BESS project in December.

Strong government push

Government support has played a key role in accelerating the sector. The Centre has released the second tranche of Viability Gap Funding (VGF) worth ₹5,400 crore, aimed at supporting 30 GWh of standalone BESS projects. For these projects, a minimum 20% domestic value addition has been made mandatory.

Additionally, the waiver of Interstate Transmission System (ISTS) charges for pumped storage and solar-plus-BESS projects has been extended until 2028, further improving project viability.