India’s Ultra-Low Battery Storage Bids Raise Red Flags on Safety and Viability

India’s latest battery energy storage tenders have recorded extremely low tariffs, triggering worries among experts that many awarded projects may not be financially viable. Battery storage is essential for integrating India’s growing renewable energy capacity, yet the current pricing trend is raising doubts about long-term sustainability.

Since 2021, India has tendered 83 GWh of storage capacity, but deployment remains slow. Only 500 MWh of systems are currently operational, while several projects have been cancelled or remain stuck in early stages. This slow rollout threatens India’s goal of reaching 500 GW of renewable energy by 2030.

Industry leaders say that bids dropping below ₹1.5/kWh-far below the typical viable range-are unrealistic. Such aggressive bidding is pushing established companies away and drawing in inexperienced players due to the lack of strict technical criteria in the tendering process.

The low tariffs are also leading developers to adopt cheaper, low-quality batteries with shorter lifespans. In India’s high-temperature conditions, experts warn that these “super-cheap cells” could increase safety risks. Globally, lithium-ion battery fires in multiple countries underscore the importance of strong quality standards.

There is also growing concern over speculative behaviour in the market. Some companies winning tenders reportedly have no intention of building the projects and are instead trying to sell them for a premium, turning the sector into a financial trading play. Such practices could ultimately expose lenders to future non-performing assets.

In response, the India Energy Storage Alliance is urging the government to revise tender guidelines, reintroduce technical eligibility standards, enforce performance benchmarks, and gradually strengthen domestic manufacturing incentives. The power ministry says it is reviewing policies, but details are yet to be disclosed.

Ultra-low battery-storage bids trigger real safety and viability concerns, and they change how lenders and offtakers should be evaluating pipeline delivery risk before non-performing assets pile up. Our energy-transition and sustainability-due-diligence teams help clients evaluate storage-project delivery risk and align with prudent investment standards.