India added nearly 547 MWh of battery energy storage capacity in 2025, around 26% year-over-year (YoY) increase from over 433 MWh, according to the newly released 2H & Annual 2025 India’s Energy Storage Landscape Report by Mercom India Research.

India’s cumulative installed battery energy storage capacity reached almost 1,082 MWh as of December 2025.

Priya Sanjay, Managing Director at Mercom India, said that energy storage installations in 2025 were largely driven by strong policy support from the central government and an active push from state governments.

Sanjay added that developers are also increasingly integrating storage solutions to mitigate the penalty associated with the deviation settlement mechanism for intermittent renewable energy.

Solar-plus energy storage systems accounted for more than 54% of the cumulative installed capacity, followed by about 23% from solar-plus-wind round-the-clock projects and nearly 21% from standalone battery energy storage systems. The remaining energy storage additions came from wind-solar storage projects and floating solar-plus-storage projects.

Sanjay noted that energy storage tenders by renewable energy implementation agencies are specifically designed to meet evolving DISCOM requirements, which explains the dominance of solar-plus-storage projects in the sector.

As of this report’s publication, the cumulative installed capacity of pumped storage projects stood at around 7 GW, of which almost 6 GW was operational.

India’s energy storage sector is now entering a crucial growth phase. Rising tender volumes, changing auction tariffs, and supportive policy frameworks signal increasing market momentum.

Sanjay said that the real opportunity lies in states with high grid tariffs, where solar-plus storage solutions can effectively replace diesel gensets, particularly for commercial and industrial consumers. “The rapid growth of data centers is also emerging as a key demand driver, especially in states where net metering policies and open access approvals are a challenge.”

“India’s energy storage sector reached an inflection point in 2025. Strong policy support, a growing pipeline, and the increasing need to manage renewable energy variability have brought storage to the center of the power sector transition. Installations are set for exponential growth, but the market’s long-term success will depend on realistic bidding, regulatory clarity, aligning storage economics with grid requirements, and addressing policy barriers such as the 18% GST on standalone battery storage compared to 5% for renewable energy projects. Energy storage is set to play a defining role in India’s clean energy future, critical to maintaining grid reliability, enabling flexibility, and ensuring stability as renewable penetration continues to rise,” said Raj Prabhu, CEO at Mercom Capital Group.

As of December 2025, Bihar led in energy storage installations, accounting for 24% of the cumulative installed energy storage capacity, followed by Chhattisgarh (16%) and Rajasthan (15%).

Gujarat had the largest pipeline of standalone battery storage capacity under development.

Multiple agencies issued energy storage tenders totaling nearly 20 GW during 2H 2025 and auctioned approximately 15 GW of energy storage and storage-linked projects.

Tender activity rose almost 30% from about 15 GW in 1H 2025, while auction volumes surged 64% from 9 GW in 1H 2025.

Mercom India’s 2H & Annual 2025 India’s Energy Storage Landscape Report is 135 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-2h-2025