Karnataka has one of India’s most renewable-heavy grids. Home to the giant Pavagada Solar Park and large wind belts in the north of the state, it generates a lot of clean power during the day — and then faces the classic problem of what to do after sunset, when demand peaks but the sun is gone. Batteries are how the state now plans to bridge that gap. Karnataka’s approach sits in two layers: a state renewable-energy policy that encourages storage, and procurement by KREDL and the ESCOMs (electricity supply companies) that actually buys it. This piece walks through both in plain terms.
The state policy layer
The direction is set by the Karnataka Renewable Energy Policy 2022-27, cleared by the state cabinet in 2022. It is deliberately pro-storage: it promotes the hybridisation of renewables — solar and wind, with or without energy storage — and floating solar paired with hydro in reservoirs. Importantly, the policy talks about deliberately creating a market for storage capacity so that the state can keep adding renewables without destabilising the grid.
Two things make Karnataka’s case a little different from other states. First, it already has significant hydro capacity, which gives it some natural flexibility to balance supply and demand. Second, its renewable share is high enough that hydro alone is no longer sufficient — batteries are needed at scale to firm up evening supply. That is exactly why storage has moved from a policy footnote to a procurement priority.
The state regulator here is KERC — the Karnataka Electricity Regulatory Commission — which approves tariffs discovered in tenders and sets the rules DISCOMs (distribution companies) follow. KERC has been consulting on a Draft Framework for Resource Adequacy Regulations, 2024, the kind of rulebook under which storage obligations on DISCOMs typically get formalised. A dedicated storage purchase obligation on Karnataka’s ESCOMs, on the lines of the central mandate we cover in our guide to the Energy Storage Obligation, would push procurement further.
KREDL and the Pavagada solar-plus-storage tender
The most concrete piece of the programme is a tender run by KREDL — the Karnataka Renewable Energy Development Limited, the state’s nodal renewable-energy agency. In 2025, KREDL invited bids to build a 250 MW solar PV project co-located with a 250 MW/1,100 MWh battery storage system near the Pavagada Solar Park in Tumkur district.
The key features reported for the tender:
- The developer builds, owns and operates the project on a build-own-operate (BOO) basis — it keeps the asset and is paid for the power it delivers.
- The battery must be charged from renewable power to count as green; the tender allows up to 5% of the input energy (in energy terms) to be sourced annually from green-market or bilateral sources.
- The goal is to supply peak power and optimise grid use at Pavagada — that is, store cheap daytime solar and release it into the evening peak.
- Karnataka’s ESCOMs sign the power purchase agreement (PPA) for a 25-year term. KREDL leases roughly 1,000 acres of land at Pavagada for the project.
This is a solar-plus-storage model rather than a pure standalone battery — the storage is bolted onto a new solar plant so the whole package delivers dispatchable, on-demand renewable power. If you want the mechanics of that pairing, our solar-BESS solution page walks through how the two work together, and our tender tracker lists what else is live across states.
The central VGF link
Karnataka’s storage push also plugs into central money. Under the expanded 30 GWh national Viability Gap Funding (VGF) scheme approved in June 2025 — a one-time capital grant that fills the gap between what a battery costs and what a DISCOM can afford — Karnataka was reported to be allocated around 1,500 MWh, alongside Andhra Pradesh, and behind the largest beneficiaries Rajasthan, Gujarat and Maharashtra at about 4,000 MWh each. The grant is set at roughly ₹18 lakh per MWh (or 30% of capital cost, whichever is lower). We explain how that grant flows in our VGF scheme deep-dive, and the wider national picture in our India BESS policy overview.
What this means for you
If you are a developer, Karnataka is an increasingly serious solar-plus-storage market: a state agency (KREDL) that tenders, 25-year offtake from the ESCOMs, and central VGF to improve the economics — anchored around the Pavagada belt where the grid genuinely needs evening firming. If you are a DISCOM or an industrial buyer, Karnataka’s tenders are a useful signal of how dispatchable renewable power is being priced in a hydro-plus-solar-heavy grid.
One caution: policy terms, VGF caps and tender conditions all change by notification, so treat the figures above — especially the VGF allocation, which sources report slightly differently — as a snapshot and confirm the live tender documents before committing. To size a storage project against Karnataka’s numbers, try our BESS savings calculator.
Policy snapshot as of July 2026. Terms change by notification; verify current provisions before financial decisions.