Mumbai, July 13 -- Developers and lenders at an energy industry event said tariffs for battery storage in India are expected to rise as higher input costs have made low-priced projects harder to sustain. The South Asian nation is expanding battery storage to provide round-the-clock renewable power, with about 260 gigawatt-hours (GWh) of energy storage projects at various stages of development. The push aims to capture output from an expanding renewable fleet measured in gigawatt (GW) scale.
Installed battery storage capacity rose more than elevenfold to eight point seven GWh in the first half of 2026 from zero point seven eight GWh at the end of 2025, and IESA data indicated it is expected to reach 10 GWh by the end of 2026. That pipeline remains far smaller than the renewable generation capacity of about 283 GW. The India Energy Storage Alliance (IESA) provided the installation and pipeline figures to industry participants.
Industry participants attributed rising costs to the withdrawal of export incentives by China, the world's largest battery supplier, and to higher prices for lithium, copper and aluminium linked to the Iran war. State Bank of India (SBI) representatives said some projects that secured funding have not progressed as battery prices rose and suppliers did not honour earlier price commitments. A SBI deputy general manager noted the lowest tariff quote seen in 2025 was Rs 148,000 per megawatt (MW) per month and that such levels are not sustainable at current battery prices. Lenders warned that projects based on earlier low bids face viability and financing risks.
Developers have at times offered low tariffs to win state government contracts, increasing pressure on margins and project delivery. Mahindra Susten, the clean energy arm of the Mahindra Group, cautioned against a race to the bottom, arguing tariffs must be realistic to ensure projects secure financing, are built on time and meet quality standards. The industry view at the event suggested the sector will need more sustainable pricing to scale storage deployment.
Published by HT Digital Content Services with permission from Construction World.