Experts warn that the new green energy rules, making Battery Energy Storage Systems (BESS) mandatory, will increase the financial burden on power companies. 

DISCOMs in several states of the country are already drowning in debt. India is still dependent on China for batteries and other equipment. 

Despite this, the Union government has set a target of more than 75 GW of storage capacity by 2030. In the coming decade, BESS could become as important to the country’s power sector as data centres are to the telecom sector.

The average cost of setting up a utility-scale 1 MW solar power project in India in 2026 is estimated to be between ₹3.5 crore and ₹5 crore. The overall project cost, however, varies depending on factors such as technology, land, engineering-procurement-construction (EPC) structure, module quality, and location.

If BESS is integrated with a 1 MW solar project, the total project cost can increase by approximately ₹1.5 crore to ₹2.5 crore. The higher cost is mainly driven by components such as lithium-ion battery packs, inverters and energy management systems, cooling and fire safety infrastructure, as well as grid integration and backup systems.

Era Of Battery Economy After Solar Boom

The solar-storage model will be made compulsory, especially in future large solar projects and tenders. 

The Union Power Ministry had earlier issued guidelines stating that all new solar tenders must include at least a two-hour energy storage system, equivalent to 10% of the project capacity. 

Following this, Gujarat has now issued the Regulation 2026 for BESS, close on the heels of Maharashtra, Tamil Nadu, and Rajasthan.

The Centre has also implemented Energy Storage Obligation (ESO), under which DISCOMs will be required to procure renewable power backed by storage systems. 

Maharashtra has taken steps under its new renewable policy to make storage mandatory with large rooftop and grid-connected projects. Rajasthan and Tamil Nadu are also bringing separate rules and tenders for solar-storage projects. Other states are following the same path.

Reliance Industries has stated that it has initiated discussions with China’s CATL and global suppliers for the procurement of battery storage components to expand its green energy plans. 

As per the Centre’s guidelines, storage is also becoming mandatory in rooftop solar systems. If any commercial or industrial consumer has an approved load of more than 100 KW and wants to install a larger solar system, then installing BESS will become compulsory. 

The storage capacity must be at least 50% of the additional load to prevent sudden stress on the grid.

Dependence On Seven States

A report released by the India Energy and Climate Centre, University of California, and Power Foundation of India had recommended making battery storage mandatory along with solar power. 

According to energy experts Nikit Abhyankar and Umed Paliwal, India will need to scale up energy storage capacity to 61GW by 2030 and 97GW by 2032 to support clean power targets. 

“The biggest dependence is expected to be on seven states — Rajasthan, Gujarat, Telangana, Uttar Pradesh, Andhra Pradesh, Maharashtra, and Karnataka,” they said in the report.

India is moving rapidly in the renewable energy sector. The Centre has set a target of 500 GW non-fossil power capacity by 2030. 

Normally, solar energy generation is highest during daytime, whereas electricity demand peaks during evening and night hours. Wind energy is also intermittent. Therefore, BESS has become essential to store excess electricity and release it during peak evening demand.

Storage Capacity To Reach 5 GWh

Union Minister of State for Power Shripad Naik had stated that the country’s total installed battery storage capacity stood at around 1 Gigawatt hour (GWh) by the end of 2025 and would be increased to 5 GWh by the end of 2026. 

Around 9,653 MW (26,729 MWh) BESS projects are under construction, while 19,797 MW (61,013 MWh) projects are in the tendering stage. 

According to the National Electricity Plan (NEP), the country’s installed power generation capacity could reach 874 GW by 2030-31. The Centre has directed states to prepare Resource Adequacy Plans (RAPs).

Gujarat Issues Draft Rules for BESS

The Gujarat Electricity Regulatory Commission has issued draft regulations for BESS in the state for 2026. 

“Under it, battery storage will be promoted along with solar and wind energy, while storage systems are expected to improve grid stability,” GERC chairman Pankaj Joshi said. According to the draft, generation, transmission and distribution companies, standalone storage developers, and prosumers will be allowed to establish BESS facilities. 

Battery storage can be used for peak demand management, renewable energy integration, grid support and ancillary services. The regulations also include provisions for EV charging, Vehicle-to-Grid (V2G) and Grid-to-Vehicle (G2V) services.