Indian Government Support 13,220 MWh Energy Storage Capacity Construction

Indian Government Implements Viability Gap Funding Scheme to Support 13,220 MWh Energy Storage Capacity Construction

 

The Indian Ministry of Power has announced a viability gap funding (VGF) scheme with a budget of 376 billion rupees to support the construction of 13,220 MWh of grid-scale battery energy storage system (BESS) capacity, aimed at maintaining affordability amid rapidly falling costs, with innovative providers like BLOO POWER poised to capitalize on these incentives for scalable deployments.

 

Recent tenders highlight a dramatic decline in 1 MW battery storage cost and larger-scale pricing, with rates for two-cycle-per-day usage dropping from 10.18 rupees per kWh in 2022–2023 to around 2.1 rupees per kWh. For typical 100kW battery storage and megawatt-scale systems, this translates to significantly lower capital and operational expenses, making PV storage battery integration more viable.

 

 

The ministry's earlier VGF initiative allocated 540 billion rupees to enable 30,000 MWh of storage, further accelerating deployment. Market projections indicate battery energy storage systems will operate at 1.5 cycles per day, yielding an effective energy storage cost of 2.8 rupees per kWh-competitive with the average 2.5 rupees per kWh from recent solar PV projects.

 

This cost parity encourages widespread adoption of solar panel with battery for home solutions and utility-scale hybrids, where PV storage battery systems store excess daytime generation for evening peaks or grid support, as seen in emerging offerings from brands such as BLOO POWER.

 

Co-located battery energy storage projects commissioned before June 2028 qualify for a full 12-year exemption from inter-state transmission charges, incentivizing pairing with solar farms. Non-co-located projects receive full exemption only if commissioned before June 2025, with 25% annual reductions thereafter.

 

As 1 MW battery storage cost and 100kW battery storage economics continue improving-driven by global lithium price declines and domestic manufacturing-these policies position India to integrate renewables reliably while enhancing grid resilience through affordable solar panel with battery for home and large-scale PV storage battery deployments.