India’s Battery Storage Market Faces Rising Costs Amidst Global Price Surge

India’s battery storage tariffs are poised to increase as rising input costs squeeze low-priced projects, according to industry experts. The country’s rapid expansion of battery storage to provide round-the-clock renewable power has led to a surge in energy storage projects, with about 260 gigawatt-hours (GWh) currently in development.

India’s Battery Storage Market Faces Rising Costs

The South Asian nation’s installed battery storage capacity has risen more than 11-fold to 8.7 GWh in the first half of 2026 from 0.78 GWh at the end of 2025, according to the India Energy Storage Alliance (IESA). However, the withdrawal of export incentives by China, the world’s largest battery supplier, along with rising prices of lithium, copper, and aluminium tied to the Iran war have pushed up battery costs.

Impact of Rising Battery Costs on Low-Priced Projects

Some projects that secured funding have not progressed as battery prices rose and suppliers no longer honoured earlier price commitments, according to State Bank of India. In 2025, the lowest tariff quote was ₹1.48 lakh ($1,548.85) per megawatt per month, but at current battery prices, that is not sustainable, said Asesh Chakrabarti, a State Bank of India deputy general manager.

Market Impact and Details

• The installed battery storage capacity is expected to reach 10 GWh by the end of 2026.
• The renewable generation capacity of about 283 GW is still far lower than the installed battery storage capacity.
• Companies in India have been offering lower tariffs to win state government projects, but this may not be sustainable in the long term.

Key Takeaways

• Rising input costs are expected to increase battery storage tariffs in India.
• The country’s installed battery storage capacity has surged, but the market is facing challenges due to rising costs.
• Low-priced projects may not be sustainable in the long term, and companies need to offer realistic tariffs to secure financing and ensure project viability.

FAQs

What is the current installed battery storage capacity in India?

The current installed battery storage capacity in India is 8.7 GWh, which has risen more than 11-fold from 0.78 GWh at the end of 2025.

What are the main factors driving up battery costs?

The withdrawal of export incentives by China, the world’s largest battery supplier, along with rising prices of lithium, copper, and aluminium tied to the Iran war have pushed up battery costs.

What is the impact of rising battery costs on low-priced projects?

Some projects that secured funding have not progressed as battery prices rose and suppliers no longer honoured earlier price commitments.

Conclusion

India’s battery storage market is facing a challenging situation due to rising input costs. The country’s installed battery storage capacity has surged, but the market is facing challenges due to rising costs. Companies need to offer realistic tariffs to secure financing and ensure project viability. As the market continues to evolve, it is essential for stakeholders to stay informed about the latest developments and trends in the battery storage sector.