Strategic Pathways for ESS Deployment Through Smart Policies and Incentives

Synopsis

India’s energy storage landscape is experiencing unprecedented momentum, with Q1 2025 alone witnessing tenders for 9.5GW of utility-scale Energy Storage Systems (ESS) – surpassing the entire capacity tendered throughout 2024. Notably, standalone systems account for nearly two-thirds (64%) of these tenders, signaling a significant shift in deployment strategy. The government’s expanded Viability Gap Funding (VGF) scheme has emerged as a critical catalyst for this growth. Following the substantial decline in battery prices, the scheme has dramatically increased its support for Battery Energy Storage Systems (BESS) from an initial 4,000 MWh to an ambitious 13,200 MWh. This expansion offers developers up to 30% capital cost subsidy, capped at ₹4.6 million per MWh, fundamentally transforming project economics across the sector.

• How are recent policy updates supporting or slowing BESS adoption in India?
• What are the current gaps in India’s ESS tendering process and how can they be addressed?
• Are government incentives aligned with long-duration and short-duration storage needs?
• How can India structure tariffs and subsidies to compete globally?