India expands funding scheme to cover 30 GWh of energy storage

The majority of the capacity is located across 15 states.

India has expanded its Viability Gap Funding (VGF) scheme to cover 30 gigawatt-hours (GWh) of batter energy storage systems (BESS).

According to JMK Research & Analytics, the  INR 5,400 crore scheme “builds upon the previous 2023 scheme that had supported 13.2 GWh, reflecting growing policy momentum to accelerate energy storage infrastructure.”

Of the new capacity, 25 GWh has been allocated across 15 Indian states, whilst 5 GWh is designated for NTPC. The states of Rajasthan, Gujarat, and Maharashtra received the highest allocations at 4,000 megawatt-hours (MWh) each, followed by Karnataka and Andhra Pradesh with 1,500 MWh each.

This project is expected to mobilise investments worth approximately INR 33,000 crore, supporting India’s near-term BESS targets through 2028.

The 2023 VGF scheme had a budget of INR 3,760 crore for 4 GWh of BESS, later scaled to 13.2 GWh as battery costs declined.

“Initially estimated at INR 96 lakh/MWh, the VGF outlay was revised to INR 46 lakh/MWh or 30% of the capital cost, whichever is lower, on account of falling battery prices. The latest 2025 scheme further reduces this to INR 18 lakh/MWh, indicating greater cost efficiency and improved commercial viability of storage solutions,” JMK said.