--- title: Battery Storage with Solar in India | Arrays Ingenieria description: Battery storage with solar in India: the 2-hour storage rule in tenders, VGF for BESS, ISTS waiver terms, the draft 500 kW rule and when it pays. url: https://arraysingenieria.com/battery-storage-with-solar/ last_updated: 2026-10-11 source: Arrays Ingenieria (Arrays Ingenieria Pvt. Ltd.) --- Guide · Storage # Battery Storage with Solar in India (2026): Mandates, Incentives and When It Pays Storage is becoming part of India's solar story. The two-hour co-located storage advisory for tenders, the viability gap funding for batteries, transmission waivers, the draft rule for large prosumers, and when a battery makes sense for a business. On this page - Why storage is arriving now - The policy picture - When a battery pays for a business - Designing solar-plus-storage - Frequently asked questions - Sources By the [Arrays Ingenieria engineering team](https://arraysingenieria.com/about/) · Updated 11 Oct 2026 · 3 min read **Key takeaways** - A February 2025 Power Ministry advisory asks for **two-hour co-located storage equal to 10% of solar capacity** in future solar tenders - Viability gap funding (VGF) supports battery storage; a second tranche of about **Rs 5,400 crore** was announced in 2025 - Co-located battery projects commissioned by **30 June 2028** keep an ISTS charges waiver under the 2025 amendment - The **draft 2026 consumer-rules amendment** proposes storage for renewable installations above 500 kW - For C&I owners, storage pays where evening tariffs are high, diesel back-up is costly or export is restricted ## Why storage is arriving now Solar generates in the middle of the day; demand peaks in the evening. As solar grows past 170 GW, grids need to move cheap daytime energy into the evening. Battery prices have fallen sharply, so policy is now nudging storage into new solar projects. ## The policy picture Storage policy in India, 2025-2026 | Measure | What it does | Status | | --- | --- | --- | | Co-located storage in solar tenders | Two-hour storage equal to 10% of the solar capacity in future tenders by implementing agencies and states | Ministry of Power advisory, February 2025; applies to future tenders, not existing projects or PM Surya Ghar | | Viability gap funding for BESS | Central support to make grid batteries viable | Second tranche of about Rs 5,400 crore announced in 2025 | | ISTS charges waiver | Waiver for co-located BESS commissioned by 30 June 2028 (where power is consumed outside the host state), and for pumped storage awarded by that date | Amended in June 2025 | | Storage for large prosumers | Renewable installations above 500 kW may need storage | Proposed in the March 2026 draft consumer-rules amendment | **Advisory, draft and final** Some of these are advisories or drafts. Tender documents and final notifications decide what is binding for a given project. ## When a battery pays for a business - **Evening peak tariffs:** with time-of-day tariffs, shifting solar into the peak is worth more (see [net metering and ToD](https://arraysingenieria.com/net-metering-india/)). - **Diesel back-up:** estates and factories that run DG sets during outages can cut diesel use. - **Export limits:** where exports are capped or poorly paid, storing surplus beats spilling it. - **Demand charges:** trimming peaks can lower contract demand. Where none of these apply, a solar plant sized to daytime load, without storage, usually gives the fastest payback. ## Designing solar-plus-storage - Decide the job: peak shifting, back-up, or both. That sets kW and kWh. - Choose the coupling: AC-coupled batteries are simpler to add to an existing plant; DC-coupled suit new builds. - Specify certified batteries and a battery management system; storage batteries fall under the BIS Quality Control Order. - Plan fire safety, ventilation and space, and get the approvals the DISCOM and Electrical Inspector require. Thinking about adding storage to an existing plant? We can review your load and tariff first. [Get a free solar quote](https://arraysingenieria.com/free-solar-quote/) ## Frequently asked questions Is battery storage mandatory with solar in India? Not for most existing or private projects. A February 2025 advisory asks for two-hour storage equal to 10% of capacity in future solar tenders, and a 2026 draft proposes storage for installations above 500 kW. What is VGF for battery storage? Viability gap funding: central support that covers part of the cost of grid battery projects to make them viable. A second tranche of about Rs 5,400 crore was announced in 2025. Does a factory need a battery with rooftop solar? Usually not. A plant sized to daytime load gives the fastest payback. Storage pays where evening tariffs are high, diesel back-up is costly or exports are restricted. ## Sources - [pv magazine India, 20 Feb 2025: Power ministry mandates co-located storage with solar](https://www.pv-magazine-india.com/2025/02/20/power-ministry-mandates-co-locating-energy-storage-with-solar-projects/) - [Mercom India: Government mandates two-hour energy storage in solar tenders](https://www.mercomindia.com/government-mandates-two-hour-energy-storage-integration-in-solar-tenders) - [Energy-Storage.News: India's energy storage market in 2025](https://www.energy-storage.news/indias-energy-storage-market-in-2025-from-tenders-to-scaled-deployment/) - [Mercom India: Top policies that shaped India's BESS market in 2025](https://www.mercomindia.com/top-policies-that-shaped-the-indian-bess-market-in-2025) - [RESI India: Draft Electricity (Rights of Consumers) Amendment Rules, 2026](https://www.resiindia.org/post/draft-electricity-rights-of-consumers-amendment-rules-2026-enabling-mandated-bess-for-500-kw-so) - [PIB: MNRE notifies the revised Quality Control Order for solar photovoltaic products](https://www.pib.gov.in/PressReleasePage.aspx?PRID=2097219) This guide explains public policy in plain language for planning purposes. Rules, rates and deadlines change: confirm the current position with the notifying authority, your DISCOM and your tax adviser before you commit. Last checked 11 Oct 2026. **About the authors.** Arrays Ingenieria is an ex-servicemen-led solar EPC and installation & commissioning company working Pan-India, from Assam's tea estates to industrial rooftops. [Our story](https://arraysingenieria.com/ex-servicemen-led-msme/) · [Our projects](https://arraysingenieria.com/projects/) [CAPEX Solar EPC](https://arraysingenieria.com/capex-solar-epc/)[Ground-Mount Solar](https://arraysingenieria.com/service-ground-mount/) From Our Sites ## Case Studies on This Topic Real plants our veteran-led crews have built, with the scope of work in detail. [Tea Estate · Ground-Mount: **Jay Shree Tea: 1 MW Solar at Towkok & Manjushree Tea Estates**1035 kWp (535 + 500 kWp) · Sonari, Charaideo district, AssamRead the case study](https://arraysingenieria.com/project-jayshree-tea-1mw-solar-assam/) Keep Reading ## Related Guides [Market Update: **India's Solar Capacity in 2026: 171 GW and What It Means for Your Business**MNRE data put India's solar fleet at 171.05 GW on 30 September 2026. 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