India's Energy Storage Market to See Major Project Execution in 2026, IESA Reports

India's energy storage market is poised for a critical shift in 2026, moving from extensive tendering to large-scale project execution, according to IESA. While 224 GWh were tendered by late 2025 (95 GWh under execution), 2026 will test the industry's delivery capabilities amid collapsed tariffs and bankability concerns. Government support and significant projects like Adani's Gujarat BESS are driving growth, yet supply chain risks and financing remain key challenges for operational success.

The India Energy Storage Alliance (IESA) has identified 2026 as a crucial inflection point for India's energy storage system (ESS) industry, marking a decisive shift from aggressive tendering to large-scale project execution. By December 31, 2025, India had tendered a total of 224 GWh of ESS capacity, comprising 92 GWh of battery energy storage systems (BESS) and 132 GWh of pumped hydro storage, with 95 GWh currently under execution. Despite record tendering activity in 2025, which saw 102 GWh tendered, operational BESS capacity was limited to 0.7 GWh. However, IESA projects an additional 2 GWh to come online by December 2026, signaling the initial stages of market scale-up.A significant development in 2025 was the sharp collapse in tariffs, with standalone 2-hour BESS tariffs falling significantly due to intensified competition from over 50 new bidders. While this indicates market maturity, it has also raised persistent concerns about project bankability and financing, as many awarded tenders are yet to secure funding. Key upcoming milestones include the commissioning of Adani's 1,126 MW / 3,530 MWh BESS facility in Gujarat by March 2026, and Rajasthan's tenders for India's largest solar-plus-BESS project in January 2026. Government policy continues to be a crucial enabler, with initiatives like Viability Gap Funding for 30 GWh of standalone BESS and extended Interstate Transmission System (ISTS) charge waivers. Nevertheless, IESA warns of emerging risks, such as potential supply chain disruptions from China's tightening trade policies on battery materials. Success in this new execution-focused phase will ultimately depend on operational excellence, innovative financing models, and robust supply chain resilience.