Storage projects face bankability test as only 219 MWh operational

India's battery storage rollout faces a bankability test as only 219 MWh of the 12.8 GWh tendered between 2022 and May 2025 became operational, with 6.4 GWh cancelled altogether. Merchant projects have brightened the picture, accounting for 82% of operational capacity, but analysts warn that higher capital costs and inconsistent market rules could slow deployment and price out smaller developers.

IEEFA analyst Dhruv Garg said execution, not tendering, is the main problem. His financial modelling found a 10-percentage-point change in the cost of capital could shift the internal rate of return by three percentage points, making some projects unviable. Larger developers may absorb higher financing, but smaller players risk exclusion, increasing market concentration. Revenue stacking from energy arbitrage, ancillary services and frequency regulation needs predictable rules to attract private capital. State-level inconsistency on operating rules could undermine existing support measures including fiscal subsidies and transmission waivers.