India’s Union Cabinet has approved a INR50.7 billion (US$531.7 million) programme to deploy 5GW of floating solar PV paired with battery energy storage systems (BESS).
Announced earlier this month, the Pradhan Mantri Surya Sarovar Yojana (PM-SSY) will support project development between FY2026-27 and FY2030-31, with financial assistance extending through FY2032-33.
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The scheme will provide central financial assistance of INR10 million/MW upon commissioning, alongside INR5 million per project for feasibility studies covering bathymetry, hydrography and environmental assessments.
With a minimum of two hours’ storage required, the programme represents a planned 10GWh of co-located BESS capacity and marks a significant push to integrate floating solar with dispatchable clean energy.
According to the Ministry of New and Renewable Energy (MNRE), India has approximately 700MW of commissioned floating solar capacity. Yet the country’s floating solar potential is far greater, with a National Institute of Solar Energy (NISE) assessment estimating 102.18GWp of deployable capacity across major state reservoirs, based on a maximum 20% water-surface utilisation.
PV Tech Premium speaks to Gaurav Upadhyay, lead energy finance specialist at the Institute for Energy Economics and Financial Analysis (IEEFA), to discuss the scheme and its implications for India’s floating solar and energy storage markets.
India’s floating solar market remains at a relatively early stage, despite the country having one of the world’s largest technical potentials. “We’ve installed around 700MW so far, which is only a small fraction of what our reservoirs and water bodies could support,” Upadhyay says.
Until now, most projects have been led by public sector agencies, while private developers have taken a cautious approach due to higher costs and limited operational experience. However, interest is growing as suitable land becomes harder to acquire for utility-scale solar. “Floating solar is emerging as an attractive alternative, provided the right policy and financing ecosystem is in place,” he adds.
For Upadhyay, the 5GW target is ambitious, but the bigger challenge is execution. “Ambition alone won’t deliver projects,” he says, pointing to the more complex engineering involved in floating solar, alongside reservoir permissions, environmental clearances and coordination across multiple agencies. Transmission infrastructure must also keep pace with project development.
“If these issues aren’t addressed through better planning and coordination, India could end up with projects that are approved on paper but delayed on the ground,” he emphasises. “Ultimately, success will depend on how efficiently these implementation risks are managed.”
The scheme’s incentives should improve project economics by reducing upfront costs and encouraging developers to undertake feasibility studies. But, Upadhyay cautions, “grants alone don’t make a project bankable.” Investors and lenders will continue to assess the reliability of offtakers, grid connectivity, regulatory approvals, construction timelines and long-term operations and management (O&M) costs.
“Investors don’t usually ask whether a project can generate electricity; they ask whether it can generate stable, predictable cash flows over the next 20 to 25 years,” the analyst notes. Project returns are only one part of the investment decision, with investors also assessing power purchase agreement (PPA) quality, payment security, transmission readiness, construction risks, regulatory certainty and the financial health of the offtaker.
“Payment security from DISCOMs, environmental clearances and contractual risk allocation will also influence financing decisions,” he says. “The scheme addresses part of the equation, but unlocking large-scale private investment will require reducing technical, commercial and regulatory risks across the entire project lifecycle.”
“If I had to pick just one factor, it would be implementation. India has never lacked ambition when it comes to renewable energy — the real challenge has always been translating policy into projects on the ground.” Upadhyay says floating solar requires close coordination between developers, utilities, transmission companies, reservoir authorities, financial institutions and government agencies. “In the end, the success of PM-SSY will depend less on the technology itself and more on the quality of execution.”
India is now moving towards co-locating BESS with standalone solar projects (subscription required), signalling a shift towards more flexible and dispatchable renewable energy.
The scheme’s focus on pairing floating solar with battery storage represents a shift in how India approaches renewable energy, according to Upadhyay. “Renewable energy is no longer just about adding capacity; it’s about supplying electricity when the grid actually needs it,” he says.
By combining floating solar with BESS, projects can shift generation towards evening peaks and provide greater operational flexibility. While batteries increase upfront capital costs, falling battery prices and evolving power markets should increasingly support the investment case. “In the long run, projects with storage are likely to be more resilient and more attractive to investors.”
However, transmission could prove to be one of the programme’s biggest implementation challenges. Some of India’s most promising reservoir sites are in regions where grid infrastructure remains weak or is still under development. “If grid expansion doesn’t happen alongside project development, developers could complete projects only to find they cannot evacuate the electricity they’ve generated,” the analyst says.
Upadhyay points to transmission delays in other renewable energy programmes as a warning for the floating solar rollout. “Generation planning and transmission planning cannot happen in isolation,” he says. Grid investments therefore need to begin well ahead of project commissioning, with close coordination between central agencies, state utilities and transmission companies. “That’s essential if India wants floating solar to scale efficiently.”
India is making progress in building a domestic solar manufacturing base, with investment in cells and battery manufacturing also gaining momentum. However, floating solar brings additional supply chain requirements, with specialised components such as floats, anchoring systems and mooring equipment still at an earlier stage of domestic development.
“Some dependence on imports is therefore likely in the near term,” Upadhyay says. But a strong project pipeline could help accelerate localisation. “If the programme creates a strong project pipeline, manufacturers will have greater confidence to invest in local production, strengthening India’s renewable energy supply chain over time.”
Alongside supply-chain development, environmental and operational risks will need to be addressed. While floating solar avoids land acquisition challenges, projects interact directly with water bodies, raising concerns around reservoir ecology, water quality, sedimentation and long-term maintenance.
“These risks are increasingly recognised, but I don’t think they’re yet fully reflected in project economics,” he says. Changing water levels, sedimentation and aquatic ecosystems can affect long-term performance, while equipment faces a harsher operating environment than ground-mounted solar. “These factors may not significantly affect the first few years of operation, but they become increasingly important over a project’s 25-year lifetime.”
Upadhyay points to Singapore and China as useful examples for India to follow as it grows the sector. Singapore’s approach prioritised learning before scaling, using pilot projects, environmental studies and extensive monitoring ahead of its 60MW floating solar project at Tengeh Reservoir. China, meanwhile, has demonstrated the benefits of integrating floating solar with existing hydropower infrastructure to improve grid utilisation and reduce curtailment.
“India can learn from both experiences,” he adds. “The key lesson is that scaling up should not come at the expense of proper site assessments or environmental safeguards.” Better environmental assessments and long-term monitoring, he adds, can reduce uncertainty for developers and investors, while recognising that every reservoir has different technical and ecological characteristics.
India’s renewable energy transition, from solar PV and energy storage to grid integration, will be a key topic of discussion at the Renewable Energy India (REI) Expo, co-located with the Energy Storage Summit India (ESS India), in Greater Noida on 22-24 October 2026. For the full agenda and booking details, click here.

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