Cover Feature: Solar Gets Wings, Thanks to Storage Boom

A New Era for Solar

After tracking over 5 years of a solar surge that has been toasted at every available opportunity, India’s solar boom is at a strange crossroads. The country has achieved its target of 40% renewable capacity four years ahead of schedule, thanks largely to solar growth. While the move from just over 2 GW to almost 125 GW capacity  in barely a decade is a huge credit to the government and industry, in many ways the real battle starts now. Thankfully, Industry is better prepared than ever to move ahead, provided the government does its part. 

The market is reminiscent of the solar market post 2010. As Lithium-ion battery prices, especially LFP which is gaining ground fast plummet and alternative chemistries gain ground, solar has a chance to move beyond intermittent—it’s becoming dispatchable, reliable, and potentially, a dominant contributor to the energy mix, thanks to storage.

Speaking at an investor meet in August, CK Thakur, Global CEO at Sterling and Wilson Renewable Group,  a leading EPC Firm focused on renewable energy projects said that “Encouragingly, the cost of battery storage has come down dramatically from INR10 lakh to around INR2.5 lakh per megawatt per month, making it more viable than ever before. Despite the progress, India’s installed BESS capacity remains modest at just 205 megawatt. However, a significant pipeline is building up, 3.3 gigawatts of projects are already lined up and another 12.5 gigawatt is currently under various stages of tendering processes. The country has set an ambitious target of achieving 74 gigawatt of BESS capacities by 2031, ‘32, which will be instrumental in balancing the intermittency of renewable power generation. Ministry of Power recently launched the second tranche of Viability Gap Funding scheme aimed at catalyzing the development of 30 gigawatt hour of BESS projects backed by a budgetary allocation of INR5,400 crores. Of this, 25-gigawatt hour will be distributed across 15 states, tailored to their individual storage requirements, while 5 gigawatt hour has been earmarked for NTPC alone. These projects are expected to be commissioned within 18 months from the signing of the battery energy storage purchase agreement or power purchase agreement reflecting the urgency and seriousness with which India is approaching storage deployment.” Thakur said this well before Reliance announced its massive solar and storage project at Kutch, in Gujarat. 

Some even go as far as to say the days of plain vanilla solar might be nearing an end. Akshay Hiranandani, CEO at Serentica Renewables is one, for instance. “For Serentica, the answer is yes. Our focus is on providing firm, round-the-clock (RTC) power for our customers, and the affordability of battery energy storage systems (BESS) enables you to deliver on that promise. Beyond ensuring RTC power, co-locating BESS with wind and solar projects also allows us to maximise grid connections, making our portfolio more efficient and reliable.

That said, standalone projects will continue to have a place in India’s energy mix. Given that wind and solar still form a relatively smaller share of the country’s overall power supply, there will be players who continue to build standalone solar and wind projects. In parallel, we also expect to see the development of standalone BESS and pumped storage plants (PSPs), further contributing to the growth and diversification of India’s renewable energy landscape”, he adds.

We look at how falling storage costs, especially for BESS or battery based storage are unlocking new value for solar, accelerating capacity additions, and redefining grid dynamics across India and the globe.

The Economics of Storage: From Costly Add-On to Strategic Enabler

Price Trends That Changed the Game

Battery storage, considered a luxury add-on for solar developers in markets like India as recently as 2020, is now a strategic enabler. Between 2010 and 2023, lithium-ion battery pack prices fell by nearly 90%, dropping from over $1,200/kWh to around $140/kWh. These are the prices that were projected to be reached by 2030. BloombergNEF, one of the organisations that has had to revise its projections, now projects further declines, with prices expected to dip below $100/kWh by 2026, driven by scale, innovation, and supply chain efficiencies. All this even as the $100 figure has already been breached in China, the dominant battery producer as well. All this means that much like solar, BESS storage could also smash projections in the next few years, much like solar did in the past few years.

• In 2023, global new solar installations hit about 450GW, dwarfing BNEF’s 2022 projection of 236GW for that year
  
• 2024 saw a 32% global growth rate in capacity, with China accounting for nearly 60% of new installations—over 350GW—while India registered a dramatic surge, installing about 34GW and overtaking Japan as the fourth-largest solar market globally.
• By mid-2024, 34 countries had installed more than 1GW each in a single year, and 25 countries now have accumulations exceeding 10GW.

A detailed study by the India Energy and Climate Centre and University of Berkeley Goldman School of Policy goes as far as saying that “By FY 2030, approximately 61 GW / 218 GWh of energy storage is found to be cost-effective to support RE deployment, aligning with India’s national storage targets. As electricity demand and RE capacity expand, this storage requirement is expected to grow to 97 GW / 362 GWh by FY 2032.

This represents substantial growth from India’s current energy storage capacity of approximately 6 GW (mostly pumped hydro), underscoring the need for robust policy and regulatory support to accelerate storage deployment at this scale”.

Titled  Strategic Pathways for Energy Storage in India Through 2032, the IECC report claims that 500 GW of clean energy capacity by 2030 and over 600 GW by 2032 is India’s most cost-effective path, demanding about $380 billion (Rs 30 trillion) in new investment by 2032 across power generation and grid infrastructure. Storage itself will require $40-$50 billion. However,  in doing this, consumers could save nearly $7 billion (Rs 60,000 crore) every year in power costs, the report adds.

IECC’s report says that  with Battery prices down 65 per cent since 2021, solar plus storage projects can deliver firm power during peak periods at Rs3-Rs3.5/kWh, with construction timelines of just 18-24 months, a huge improvement over thermal plants being sanctioned today. Remember, the Bihar government just sanctioned a plant in Pirpainti at Rs 6.03/unit.

While 2-hour batteries are expected to be commissioned first by 2027, higher duration backup upto 8 hours might be possible by 2030. Recent tenders make it clear that batteries are expected to be co-located with regions that have significant solar capacity, large load centres, and states with limited peaking capacity, such as Gujarat, Rajasthan, Maharashtra, Uttar Pradesh, Andhra Pradesh, and Telangana.

This cost compression is not just a technical milestone—it’s a market signal. Developers are now integrating storage not to meet mandates, but to unlock new revenue streams and hedge against grid volatility.

In a market where dispatchability is equal to bankability, storage is enabling that.This shift improves the bankability of solar projects, attracting institutional capital and enabling participation in peak-time markets. In India, where time-of-day tariffs are slowly gaining traction, storage-backed solar is possibly the best, and many would say, only hedge against curtailment and price cannibalization.

Capacity Additions: Storage as a Solar Catalyst

India’s solar capacity additions are increasingly tied to storage economics. The Solar Energy Corporation of India (SECI) has issued multiple tenders for solar-plus-storage projects, with recent bids showing aggressive pricing—some below ₹4.50/kWh for peak power. This signals that developers are factoring in falling battery costs and optimizing project design accordingly.

Power Prices: Missing Storage

Akshay Hiranandani, tells SaurEnergy that Serentica Renewables is making significant strides in strengthening its storage-linked renewable energy portfolio.  “We recognise the critical role storage will play in delivering firm, dispatchable power at scale. As a company focused on Round-the-Clock (RTC) solutions, energy storage is fundamental to all the projects we deliver. We are continually increasing the firmness of the products we offer, and our next phase of projects will include peak-hour, load-following, and time-block commitments. Accordingly, storage will make up a larger proportion of our total capacity. As part of our broader commitment of 8,500 MW by 2028, we have lined up 4,500 MWh of storage capacity currently under late-stage development, integrated across our upcoming projects.”

States like Gujarat, Rajasthan, and Andhra Pradesh are now planning hybrid parks with integrated storage, aiming to smooth output and reduce grid stress. The PM Suryaghar scheme, while focused on rooftop solar initially, is also nudging households toward battery adoption through incentives and awareness. And then we have states like Kerala, where storage is set to become mandatory for solar rooftops of 5 kW and more in its Draft Renewable Energy Regulations 2025.  The goal is to stabilize Kerala’s grid, manage peak demand, and ensure dispatchable renewable power. By 2030, the state expects to need 2 GW / 4 GWh of storage capacity.

Global Momentum

Globally, China, U.S, and Australia are leading the charge. In California, solar-plus-storage projects now dominate utility-scale procurement, becoming a key driver in the state utilising all of the green energy it generates.

China’s 14th Five-Year Plan includes mandates for storage integration in new solar installations. As of the first half of 2025, China’s cumulative installed capacity of new energy storage reached 101.3 GW, a YoY  increase of 110%, surpassing 100GW for the first time.In the first half of 2025, new energy storage projects reached 23.03GW/56.12GWh, a  68% year-on-year jump.

The US, with 26 GW of utility scale battery storage has another 49 GWh lined up across segments.

Australia’s grid, once plagued by duck curves due to its successful solar rooftop program, is now seeing stability thanks to distributed batteries and virtual power plants. With total existing capacity of almost 6 GWh and 7.8 GW under construction, the country has become known for its Big Battery projects, with records for size being broken virtually every six months. The largest battery in place for now is the Collie 2 GWh battery in Western Australia.

Even Saudi Arabia has virtually played catch up on its renewable ambitions thanks to the lower storage costs, which has galvanised the addition of over 2.5 GWh of storage capacity in the past 12 months, and 10 GWh set to come up by 2028. This will catalyse the addition of over 40 GW of solar capacity by 2030.

Policy Tailwinds In India: Incentives, Mandates, and Market Design

India’s Policy Push

India’s National Electricity Plan (NEP) projects 51 GW of battery storage by 2032. The government’s Viability Gap Funding (VGF) scheme for storage projects, coupled with Production Linked Incentives (PLI) for battery manufacturing, is creating a virtuous cycle. The draft Ancillary Services Market framework also recognizes storage as a key player in frequency regulation. The government is close to mandating that all new solar project tenders include energy storage: a minimum two-hour storage capacity equal to 10% of installed capacity. This policy, issued by the Power Ministry and implemented by agencies like SECI, NTPC, and NHPC, is designed to stabilize the grid, absorb intermittent renewables, and reduce power costs during peak evening hours.

Regulatory clarity around open access, net metering, and time-of-day tariffs is encouraging commercial and industrial (C&I) consumers to adopt solar-plus-storage solutions.

CEA’s National Electricity Plan projections call for 73.93GW/411.4GWh storage by 2031–32, needed to accommodate 364GW of solar and 121GW of wind.

Regulations that require rooftop solar to include two-hour storage is a move that could add 14GW/28GWh by 2030 alone.

Technology Trends: Beyond Lithium-Ion

Diversifying the Chemistry

While lithium-ion remains dominant, alternative chemistries are gaining traction. Sodium-ion, iron-air, and flow batteries offer longer durations and lower costs for specific use cases. Indian startups and PSUs are exploring these technologies, with pilot projects underway in Telangana and Tamil Nadu.

The emergence of long-duration storage (LDS) is particularly relevant for solar, enabling overnight dispatch and seasonal balancing. As costs fall and performance improves, these technologies could redefine solar’s role in baseload generation.

Smart Storage and AI Optimization

Advanced energy management systems (EMS) and AI-driven dispatch algorithms are optimizing battery usage. Predictive analytics now allow solar-plus-storage systems to respond to grid signals, weather forecasts, and market prices in real time. This intelligence layer enhances revenue stacking and grid support capabilities.

Market Dynamics: Who Gains, Who Adapts

As the share of renewables goes up, a key hope is that thermal plants will be able to power down and operate at lower PLFs. Unfortunately, that hasn’t really happened yet.

Coal-based units have struggled to ramp down. Many still can’t achieve even 55% MTL, despite CEA’s “Flexible Operation of Coal based Thermal Power Generating Units” regulation 2022, notified in January 2023 for 40% Minimum Technical load.

This failure places at risk PPAs for RE, merchant power for RE developers becoming unviable.

Developers and IPPs

Already, Independent Power Producers (IPPs) are recalibrating their portfolios. Companies like ReNew, Tata Power, Acme Solar and Adani Green are bidding aggressively in storage-linked tenders, leveraging economies of scale and financial muscle. Smaller developers are partnering with tech firms to offer turnkey solar-plus-storage solutions. Over 60 unique firms have won various storage bids so far, indicating just how wide the interest and opportunity runs in the segment now.

C&I Consumers

For commercial and industrial consumers, storage offers tariff arbitrage, backup power, and ESG benefits. Data centers, textile units, and pharma firms are early adopters, especially in states with high grid tariffs and unreliable supply.

Hiranandani adds that emerging segments like Data centres create especially compelling cases for storage backed solar. “With India’s data centre capacity expected to increase from 960 MW at present to 9.2 GW by 2030, the sector requires uninterrupted, round-the-clock renewable energy to power high-density workloads and cooling infrastructure. These energy-intensive facilities are placing strong emphasis on securing reliable and cost-efficient green power in line with corporate sustainability commitments and net-zero targets”.

Residential Uptake

While still nascent, residential storage is gaining ground. Urban consumers are installing batteries alongside rooftop solar to ensure backup and maximize self-consumption. As prices fall and awareness grows, this segment could mirror the rooftop solar boom of the past decade.

The Risks

Supply Chain Volatility

Battery supply chains remain vulnerable to geopolitical tensions, raw material shortages, and trade barriers. India’s reliance on imported lithium and components poses risks, though efforts to localize production are underway.

Regulatory Uncertainty

While policy is evolving, gaps remain in grid codes, safety standards, and revenue mechanisms. Developers need clarity on ancillary services payments, peak pricing structures, and battery degradation accounting.

Financing and Bankability

Despite falling costs, storage projects require upfront capital and long-term certainty. Innovative financing models—like pay-as-you-save, leasing, and green bonds—are emerging but need scale and standardization.

The Road Ahead: Storage as Solar’s Strategic Ally

India has come a long way from the initial years where storage tender cancellations became the norm with 36 GWh out of  47 GWh being cancelled between 2018-2023. In the last 2 years only 6 GWh out of 137 GWh has been  cancelled with a clean slate in 2025.. By the year end, the country should be close to 2 GWh worth of BESS storage capacity, taking its total storage capacity to over 8 GWh with PSP. That is not going to be enough, as seen in the power curtailment of solar plants recently.

The convergence of falling battery costs, supportive policies, and technological innovation is turning storage from a sidekick into a strategic ally for solar. In India, this shift could unlock gigawatts of new capacity, stabilize the grid, and accelerate the energy transition.

To fully realize this potential, stakeholders must collaborate across silos—developers with financiers, policymakers with technologists, and consumers with utilities. The goal is not just more solar, but smarter solar: firm, flexible, and future-ready.

Markets have consistently beaten projections thanks to favorable economics and strong policy direction. To fully realize this advantage, India must focus on managing supply chain risks, ensuring a stable regulatory environment, and accelerating domestic storage manufacturing. If successful, India could become a global leader in solar-powered energy systems with robust storage—delivering reliable, secure, climate-friendly electricity at scale.