ACME Solar Holdings Limited, one of India’s leading renewable energy developers, has taken a significant step toward strengthening energy storage infrastructure in India by signing Battery Energy Storage Purchase Agreements (BESPAs) with NHPC Limited. The total contracted capacity under these agreements is 275 MW/550 MWh, which will be executed across two Standalone Battery Energy Storage System (BESS) projects in Andhra Pradesh.

The announcement, made on July 18, 2025, marks an important milestone not only for ACME but also for India’s broader clean energy goals. These pioneering projects, backed by the Viability Gap Funding (VGF) scheme of the Government of India, are expected to play a crucial role in enhancing grid reliability and stabilising renewable energy generation across the country.

Why this deal matters for India’s energy landscape

The rapid integration of solar and wind energy into the national grid brings with it challenges due to the intermittent nature of these sources. To maintain a stable power supply and ensure efficient energy distribution, battery storage systems have become a necessity.

Battery Energy Storage Systems (BESS) absorb electricity during off-peak hours and release it during peak demand, thereby acting as a powerful buffer for the grid. With a contracted capacity of 275 MW and a discharge potential of 550 MWh, this deal will significantly contribute to load balancing in the southern grid, especially in Andhra Pradesh where renewable generation is on the rise.

Key project details and contract terms

The BESS projects were awarded to ACME Solar through a competitive e-reverse auction held on June 24, 2025. The awarded tariffs were:

• INR 2,10,000 per MW/month for 50 MW/100 MWh

• INR 2,22,000 per MW/month for 225 MW/450 MWh

This pricing indicates strong confidence in the cost-effectiveness of energy storage, a sector that’s been historically seen as capital-intensive.

The Letter of Award (LOA) for these projects was granted on July 8, 2025, and within just 10 days, ACME Solar finalised the BESPAs with NHPC, showcasing remarkable speed in execution.

The swift turnaround from award to agreement was enabled due to prior identification of the customer site, which is Andhra Pradesh. The project sites will be customer-owned locations, with land and evacuation infrastructure being provided by the state, reducing the project risk and accelerating timelines.

Commissioning timeline and technical scope

These standalone BESS installations are expected to be commissioned within 18 months from the date of signing the agreement. This timeline aligns with India’s aggressive push to achieve 500 GW of non-fossil fuel capacity by 2030.

With these projects, ACME aims to:

• Improve the grid integration of renewable sources like solar and wind

• Provide time-shifted energy for better utilisation

• Offer capacity support during peak hours

• Implement the BESS-as-a-service model for efficient monetization

The model allows for fixed capacity charges, which ensure consistent returns for developers while keeping the cost predictable for buyers like NHPC.

The Viability Gap Funding (VGF) support

To encourage private investments in the energy storage space, these projects are covered under the Viability Gap Funding (VGF) scheme by the Government of India. Under this scheme:

• ACME will receive ₹27 lakh per MWh or 30% of the project cost, whichever is lower

• This financial support makes high-capacity storage feasible and commercially attractive

The presence of VGF ensures that the tariff discovered during bidding remains affordable for public utilities like NHPC while maintaining financial sustainability for project developers like ACME.

A landmark for ACME Solar’s portfolio

ACME Solar Holdings already has a diversified renewable energy portfolio of over 6,970 MW and now adds 550 MWh of storage capacity through this initiative. As of now:

• 2,890 MW of capacity is operational

• 4,080 MW is under various implementation stages

This move will enhance ACME’s battery storage capacity and bring scale economies in procurement, installation, and maintenance. The company’s in-house EPC (Engineering, Procurement, and Construction) and O&M (Operations & Maintenance) divisions ensure end-to-end control over project execution, which improves both cost and time efficiency.

Reinforcing clean energy transition in Andhra Pradesh

The projects will be installed in Andhra Pradesh, one of the key states driving renewable energy adoption in India. By deploying Standalone BESS at customer sites, this deal will:

• Reduce strain on the local grid during peak loads

• Improve renewable energy absorption

• Strengthen the state’s energy reliability

• Enable localised energy security

This aligns well with Andhra Pradesh's broader energy strategy and India's national Energy Storage Mission, which seeks to mainstream battery storage in the power ecosystem.

What experts say

According to Rajesh Sodhi, Company Secretary and Compliance Officer at ACME Solar:

“This is not just another project — it’s a model for the future of India’s energy landscape. With our expertise in execution and NHPC’s strong distribution framework, we’re poised to deliver value at scale.”

Energy analysts believe that BESS-as-a-service, backed by VGF, may become the standard model for large-scale energy storage in the coming decade.

Future of Battery Energy Storage in India

India is expected to need 50+ GWh of storage capacity annually by 2030. Storage systems like BESS will play a crucial role in grid stability, power reliability, and flexibility in renewable energy usage.

With support from government schemes and improved unit economics, more players like ACME are likely to enter the market and scale up rapidly.

Conclusion

With this agreement, ACME Solar is not just expanding its capacity, but paving the way for a future-ready energy storage ecosystem in India. The project reflects India’s commitment to clean energy, its push toward innovation, and its ability to scale technology solutions for the benefit of both the economy and the environment.

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