- A February 2025 Power Ministry advisory asks for two-hour co-located storage equal to 10% of solar capacity in future solar tenders
- Viability gap funding (VGF) supports battery storage; a second tranche of about Rs 5,400 crore was announced in 2025
- Co-located battery projects commissioned by 30 June 2028 keep an ISTS charges waiver under the 2025 amendment
- The draft 2026 consumer-rules amendment proposes storage for renewable installations above 500 kW
- For C&I owners, storage pays where evening tariffs are high, diesel back-up is costly or export is restricted
Why storage is arriving now
Solar generates in the middle of the day; demand peaks in the evening. As solar grows past 170 GW, grids need to move cheap daytime energy into the evening. Battery prices have fallen sharply, so policy is now nudging storage into new solar projects.
The policy picture
| Measure | What it does | Status |
|---|---|---|
| Co-located storage in solar tenders | Two-hour storage equal to 10% of the solar capacity in future tenders by implementing agencies and states | Ministry of Power advisory, February 2025; applies to future tenders, not existing projects or PM Surya Ghar |
| Viability gap funding for BESS | Central support to make grid batteries viable | Second tranche of about Rs 5,400 crore announced in 2025 |
| ISTS charges waiver | Waiver for co-located BESS commissioned by 30 June 2028 (where power is consumed outside the host state), and for pumped storage awarded by that date | Amended in June 2025 |
| Storage for large prosumers | Renewable installations above 500 kW may need storage | Proposed in the March 2026 draft consumer-rules amendment |
When a battery pays for a business
- Evening peak tariffs: with time-of-day tariffs, shifting solar into the peak is worth more (see net metering and ToD).
- Diesel back-up: estates and factories that run DG sets during outages can cut diesel use.
- Export limits: where exports are capped or poorly paid, storing surplus beats spilling it.
- Demand charges: trimming peaks can lower contract demand.
Where none of these apply, a solar plant sized to daytime load, without storage, usually gives the fastest payback.
Designing solar-plus-storage
- Decide the job: peak shifting, back-up, or both. That sets kW and kWh.
- Choose the coupling: AC-coupled batteries are simpler to add to an existing plant; DC-coupled suit new builds.
- Specify certified batteries and a battery management system; storage batteries fall under the BIS Quality Control Order.
- Plan fire safety, ventilation and space, and get the approvals the DISCOM and Electrical Inspector require.
Thinking about adding storage to an existing plant? We can review your load and tariff first.
Get a free solar quoteFrequently asked questions
Is battery storage mandatory with solar in India?
What is VGF for battery storage?
Does a factory need a battery with rooftop solar?
Sources
- pv magazine India, 20 Feb 2025: Power ministry mandates co-located storage with solar
- Mercom India: Government mandates two-hour energy storage in solar tenders
- Energy-Storage.News: India's energy storage market in 2025
- Mercom India: Top policies that shaped India's BESS market in 2025
- RESI India: Draft Electricity (Rights of Consumers) Amendment Rules, 2026
- PIB: MNRE notifies the revised Quality Control Order for solar photovoltaic products
This guide explains public policy in plain language for planning purposes. Rules, rates and deadlines change: confirm the current position with the notifying authority, your DISCOM and your tax adviser before you commit. Last checked 11 Oct 2026.
About the authors. Arrays Ingenieria is an ex-servicemen-led solar EPC and installation & commissioning company working Pan-India, from Assam's tea estates to industrial rooftops. Our story · Our projects
