Why co-locating battery storage with solar could transform India's renewable energy transition

Falling battery costs, growing renewable energy (RE) deployment, and supportive policy measures are bringing battery energy storage systems (BESS) into sharp focus in India. In March 2026, the Minister of State in the Ministry of Power informed the Rajya Sabha that India’s installed BESS capacity remains below 1 GWh, indicating that deployment is still in its early stages. The Central Electricity Authority projects requirements of 80 GW/321 GWh by 2035–36, reflecting the critical role of storage in managing RE intermittency.

The extension of duty exemptions to grid-scale battery storage systems under the Union Budget 2026–27 signals evolving government support for strengthening domestic battery manufacturing. These measures are expected to further reduce battery costs and support wider BESS deployment.

The rationale for co-location also applies to decentralised renewable energy systems. As small-scale, decentralised power sources, such as rooftop solar photovoltaic and agri-photovoltaics, continue to grow, deploying BESS at the distribution-network level can benefit both end users and distribution companies (DISCOMs). While BESS can reduce dependence on the external grid and improve electricity cost savings for end users, co-locating distributed RE with BESS can help DISCOMs manage local grid challenges, such as reverse power flows, feeder congestion, and voltage issues at the tail end of feeders. In this context, co-locating BESS at both centralised and decentralised solar generation sites is emerging as a key approach for integrating energy storage.

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