Energy storage is becoming a key part of India’s energy transition as renewables installations grow. But according to a recent industry report, India’s energy storage sector is suffering from“Low bid price and high execution risk”.
According to a recent report by JMK Research, a new energy consultancy, and the Institute for Energy Economics and financial analysis (IEEFA) , India allocated 10.4 gigawatts of independent battery energy storage (Bess) capacity in 2025, among them, the energy storage system with less than two hours of power supply and two daily cycles accounts for 57% of the total scale. However, about 75% of the projects that have won the bid are below the commercial feasibility threshold, and there is a large implementation risk.
According to the report, the minimum bid price for a two-hour storage project has fallen to INR 148,000(10,000 rupees) per megawatt per month, this compares with the benchmark price of Rs 230,000 estimated by the research institute. In other words, the contract prices for a large number of projects can no longer cover the actual construction and operating costs. The report believes that since the second half of 2025, a number of large tenders appear abnormally low prices, the winning enterprises there is a certain degree of speculative bidding behavior. “There seems to be a lot of capacity being built on paper, but implementation is seriously lacking and there are gaps,” an industry source who has consulted on the project’s implementation told the media
India’s energy storage industry has experienced rapid growth in the past few years. India’s cumulative energy storage tenders have grown more than 12-fold from 6.8 GW in 2018 to 90.7 GW in 2025, according to the report.
However, behind the growth in demand for energy storage is the pressure of grid regulation brought about by the continuous expansion of renewable energy capacity in India. The problem of“Excess power generation by day and insufficient power generation by night” has become increasingly prominent. In areas with high solar power generation, curtailment is on the rise. Between May and December 2025 alone, Indian solar projects were forced to cut output by about 2,300 gigawatt hours, according to Ember, an energy think-tank.
In this context, energy storage is seen as an important tool to solve the problem of new energy consumption. However, while the global price of lithium-ion batteries has been falling in recent years, the economics of energy storage projects have not improved in tandem. Between 2022 and 2025, winning bids for energy storage projects in India fell by more than 70 per cent, while battery pack prices fell by only about 36 per cent over the same period, according to JMK Research. The price drops the speed to be quicker than the cost drops the speed, causes the developer profit space to be compressed unceasingly.
India’s energy storage industry chain is still dependent on imports, Indian media reported. Lithium-ion batteries, cells and some key materials mainly come from China. In addition, India’s financing costs have been high for a long time, and project lending rates are generally higher than in major new energy markets. The inexperience of developers is also a new industry concern. According to IEEFA, only 46.3 per cent of allocated storage capacity has been secured by companies with experience in independent storage construction.
The risks are expected to have a wider impact on the industry, according to industry insiders. IEEFA said delays could last nine to 18 months because of challenges in financing, procurement and commissioning. In the case of low electricity prices, cost pressure may also lead to quality, system reliability and security are affected. These challenges may ultimately constrain the effective integration of renewable energy in India’s energy mix.