⚡ Quick Read
- What happened: India added 547 MWh of battery energy storage capacity in 2025, marking a 26% year-on-year increase and bringing the cumulative total to 1,082 MWh.
- Why it matters: Solar-plus-storage projects now dominate the landscape, signaling a shift in project design requirements for developers and EPCs aiming to manage renewable intermittency.
- Watch: Future market expansion hinges on resolving the 18% GST disparity for standalone storage and ensuring realistic bidding practices in upcoming tenders.
Background and Context
The Indian energy storage sector has reached a critical inflection point as the nation accelerates its transition toward a high-penetration renewable energy grid. According to the ‘2H & Annual 2025 India’s Energy Storage Landscape Report’ by Mercom India Research, the industry is moving beyond pilot phases into large-scale deployment. This growth is driven by the urgent need to manage the inherent variability of solar and wind power, which now form the backbone of India’s capacity addition targets.
Key Details
In 2025, India successfully commissioned 547 MWh of battery energy storage capacity, a 26% increase over the 433 MWh added in 2024. This brings the country’s cumulative installed battery energy storage capacity to 1,082 MWh as of December 31, 2025. The project mix is heavily skewed toward integrated solutions: solar-plus-energy storage systems account for over 54% of the cumulative capacity. Solar-plus-wind projects with round-the-clock (RTC) configurations contribute 23%, while standalone battery energy storage systems (BESS) represent 21%. The remaining capacity is comprised of hybrid floating solar-plus-storage projects.
Beyond battery storage, the report highlights the significant role of pumped storage projects (PSPs), with cumulative installed capacity exceeding 7 GW, of which approximately 6 GW is currently operational.
What This Means for EPCs and Developers
For EPC contractors and developers, the data confirms that hybrid projects are the current market preference. The dominance of solar-plus-storage indicates that procurement strategies must now integrate battery procurement and system integration expertise. However, the sector faces economic headwinds. Raj Prabhu, CEO of Mercom Capital Group, highlighted that the 18% GST on standalone battery storage—compared to the 5% rate for renewable energy projects—remains a significant policy barrier that developers must account for in their financial modeling and bid pricing.
What Happens Next
The long-term viability of the sector will depend on three pillars: regulatory clarity, realistic bidding, and the alignment of storage economics with specific grid requirements. As renewable penetration continues to rise, the industry expects exponential growth in installations. Stakeholders should monitor policy updates regarding tax structures and grid-balancing mandates, as these will dictate the profitability of future storage-heavy projects.
