India’s renewable energy landscape is experiencing a major shift. The rise of solar-plus-storage tenders is creating fresh challenges for project developers, utilities, and procurement teams. When batteries join solar projects, procurement becomes more complicated than buying solar panels alone.
Between 2024 and early 2025, India tendered over 10.6 GW of solar capacity paired with 12.5 GWh of battery energy storage systems. This rapid growth shows that energy storage is no longer an optional add-on. Companies like Almighty Energy are adapting their procurement methods to handle these hybrid systems, which require different risk assessments, supplier evaluations, and performance guarantees compared to traditional solar projects.
Why Solar Plus Storage Tenders Are Gaining Ground
India aims to reach 500 GW of renewable energy capacity by 2030. Solar and wind power produce electricity when the sun shines or wind blows, but not necessarily when demand peaks. Storage systems bridge this gap by capturing excess generation and releasing it during evening hours when consumption rises.
The first solar-plus-storage tender in India came in 2018 for the Andaman & Nicobar Islands, a modest 20 MW solar project with 8 MWh of battery capacity. By 2024, the market exploded. The Solar Energy Corporation of India awarded a massive 2 GW solar project with 4 GWh of storage at a tariff of Rs 3.52 per kWh. Later, NHPC awarded 1.2 GW of solar with 1.2 GWh of storage at an even lower Rs 3.09 per kWh.
These pricing levels show that solar-plus-storage systems can compete with conventional power sources. Recent standalone battery storage tenders achieved winning bids as low as Rs 2.8 lakh per MW per month without subsidies, a roughly 20% drop from six months earlier. For comparison, plain solar tariffs hover around Rs 2.50 to Rs 2.60 per kWh, while peak power costs Rs 8.50 per kWh.
The Ministry of Power issued an advisory in early 2025 mandating that future solar tenders include at least two hours of energy storage, equal to 10% of installed solar capacity. This policy could create 14 GW and 28 GWh of storage demand by 2030. The Central Electricity Authority projects India will need 411 GWh of storage capacity by 2032, with batteries accounting for 236 GWh.
How Solar Plus Storage Procurement Differs from Traditional Solar
Traditional solar procurement focuses on panel efficiency, inverter reliability, and balance-of-system components. Adding batteries introduces several new layers of complexity.
Component Integration Challenges
Solar-plus-storage projects require seamless coordination between photovoltaic arrays, battery management systems, power conversion systems, energy management software, and grid interconnection equipment. Each component comes from different suppliers with varying warranties, performance guarantees, and technical specifications.
When Almighty Energy evaluates hybrid projects, teams assess whether the battery management system can communicate effectively with solar inverters and grid controls. A mismatch in control protocols can lead to charging inefficiencies, shortened battery life, or grid instability.
Multiple Technology Pathways
Battery chemistry selection affects procurement strategy. Lithium-ion batteries dominate current deployments due to declining costs and improving cycle life. Grid-scale lithium-ion system prices dropped roughly 65% in India between 2022 and 2024, from approximately Rs 1.08 lakh per MW per month to Rs 372,000 per MW per month.
Some tenders allow technology-agnostic approaches, permitting developers to choose between battery types, pumped hydro storage, or other solutions. This flexibility requires procurement teams to evaluate multiple technology pathways simultaneously, each with distinct supply chains, performance characteristics, and financial structures.
Longer Performance Horizons
Solar panels typically carry 25-year warranties with gradual degradation curves. Batteries operate differently. Most lithium-ion systems in current tenders specify 12-year service life with defined degradation limits. Procurement contracts must address battery replacement schedules, capacity fade over time, and round-trip efficiency decline.
Recent tenders require batteries to maintain rated capacity at commissioning and through the first year, with specific limits on capacity and efficiency degradation. These performance requirements change how procurement teams structure payment terms, penalty clauses, and long-term service agreements.
Risk Management in Hybrid Project Procurement
Solar-plus-storage tenders create risk categories that don’t exist in standalone solar projects.
Technology Performance Risk
Battery systems must cycle daily or twice daily depending on tender requirements. SECI’s recent tenders specified two-hour discharge periods each day during which storage systems deliver power to the grid. System operators determine these periods on a day-ahead basis based on load forecasting.
This operational pattern exposes batteries to accelerated cycling, thermal stress, and potential safety incidents. Fire safety protocols have evolved from peripheral concerns to core system architecture decisions. Procurement teams now evaluate containerized battery solutions with integrated thermal management, fire suppression systems, and emergency shutdown capabilities.
Supply Chain Vulnerabilities
India currently relies on imported battery cells, primarily from China, creating exposure to global lithium price volatility and geopolitical disruptions. Recent government mandates require 20% domestic content in battery storage projects receiving viability gap funding. This includes indigenously developed energy management system software.
The domestic content requirement forces procurement teams to identify local suppliers for specific components while maintaining international relationships for battery cells and advanced power electronics. Companies like Almighty Energy must balance cost optimization with supply chain resilience and compliance requirements.
Financing and Bankability Concerns
Financial institutions view hybrid projects as riskier than conventional solar installations. Perceived technology uncertainties, immature performance track records, and complex contract structures lead to higher financing costs.
Aggressive bidding in recent auctions raised concerns about underbidding by inexperienced developers. When companies submit artificially low bids to win contracts, they may struggle to deliver quality installations or meet long-term performance obligations. This behavior increases execution risk across the sector.
Evolving Procurement Frameworks
India’s storage tender frameworks have evolved rapidly since 2018. Early tenders used engineering, procurement, and construction models for small, remote applications. Recent large-scale awards favor build-own-operate structures where developers retain project ownership throughout 25-year power purchase agreements.
Qualification Criteria Are Getting Stricter
To address underbidding concerns, procurement authorities are implementing stricter qualification requirements. This includes superior technical qualifications, prior tie-ups with battery suppliers, and demonstrated experience in storage system integration.
Developers must now show they have secured equipment commitments from battery manufacturers before bidding. This requirement reduces speculative bidding and improves project execution rates.
Flexible Payment Structures
Different business models are emerging for storage procurement. Some tenders compensate developers for storage capacity measured in rupees per MW per month, regardless of actual energy dispatched. Others structure payments around energy throughput.
The Ministry of Power identified eight business models for energy storage, including standalone arbitrage, renewable firming, transmission optimization, and ancillary services. Each model requires different procurement and contracting approaches.
Performance-Linked Incentives
Newer tenders incorporate incentive mechanisms for over-performance and penalties for under-delivery. If a battery system delivers more discharge cycles than specified, developers receive additional compensation. If capacity fades faster than allowed degradation curves, penalties apply.
These performance-linked structures shift risk allocation between developers and off-takers, creating more robust long-term contracts.
What Procurement Teams Need to Focus On
Given these complexities, procurement strategies for solar-plus-storage projects require specific capabilities.
Technical Due Diligence
Teams must evaluate battery chemistry options, balance-of-system integration, thermal management designs, and safety certifications. This goes beyond traditional solar panel efficiency ratings and module quality assessments.
Long-Term Operational Modeling
Financial models must account for battery degradation over 12-25 year periods, replacement schedules for battery banks, changing electricity market dynamics, and potential for multiple revenue streams from the same asset.
Supplier Ecosystem Development
Building relationships with battery manufacturers, system integrators, energy management software providers, and specialized operations and maintenance firms becomes necessary. Procurement can no longer rely solely on solar equipment suppliers.
Regulatory Compliance Management
Keeping pace with rapidly changing policies, domestic content requirements, safety standards, and grid code modifications requires dedicated regulatory monitoring capabilities.
The shift toward solar-plus-storage tenders represents a fundamental change in how India procures renewable energy infrastructure. Success in this market demands procurement strategies that account for technology integration challenges, performance risk over extended periods, and evolving regulatory frameworks. Organizations like Almighty Energy that develop these capabilities will be better positioned to deliver projects that meet financial targets while supporting India’s clean energy transition.
Frequently Asked Questions
What is a solar plus storage tender?
A solar plus storage tender is a procurement process where project developers bid to build solar power plants coupled with battery energy storage systems. These hybrid projects can store excess solar generation during peak sunlight hours and discharge electricity when demand rises, typically during evening hours. The storage component allows solar energy to provide dispatchable power rather than variable generation.
How do battery costs affect project economics?
Battery costs have dropped significantly in India, with grid-scale lithium-ion system prices falling roughly 65% between 2022 and 2024. This price decline makes solar-plus-storage projects competitive with conventional power sources. Current standalone battery storage tenders achieve winning bids around Rs 2.8 lakh per MW per month without subsidies, demonstrating improved economics that support wider deployment.
What are the main risks in solar plus storage procurement?
The main risks include battery performance degradation over time, technology integration failures between solar and storage components, supply chain vulnerabilities for imported battery cells, higher financing costs due to perceived project risk, and potential underbidding by inexperienced developers that could affect project quality and long-term viability.
Why is domestic content becoming mandatory?
The Indian government mandates 20% domestic content in battery storage projects receiving viability gap funding to build local supply chains and reduce dependence on imported components. This requirement includes indigenously developed energy management software and encourages collaboration between global equipment manufacturers and Indian technology partners, supporting the country’s manufacturing capabilities in advanced energy storage.
How long do battery storage systems last in solar projects?
Most lithium-ion battery systems in current Indian tenders specify a 12-year service life with defined degradation limits. Procurement contracts address battery replacement schedules after this period. Solar panels typically have 25-year warranties, creating a mismatch that requires careful planning for battery bank replacements during the overall project lifetime to maintain performance guarantees.
