The Union Budget 2026 places clean energy, especially solar power, firmly at the centre of India’s growth and energy transition strategy. With a clear focus on scale, affordability, manufacturing strength, and grid resilience, the budget builds on earlier reforms while signalling a more mature and system-level approach to decarbonisation. Solar energy emerges as the main pillar of this transition, supported by higher allocations, targeted schemes, and a supportive policy environment aimed at both decentralised and utility-scale deployment.
The overall allocation for renewable energy has been raised to about ₹32,914.7 crore, nearly 30% higher than the previous year’s revised estimates. Alongside this, the Ministry of New and Renewable Energy, the Ministry of Power, and the Department of Atomic Energy together receive allocations of around ₹26,549 crore, ₹21,847 crore, and ₹24,049 crore, respectively. This distribution reflects a broader clean-energy and grid-modernisation push, recognising that solar growth must go hand in hand with stronger transmission, storage, and system reliability. The higher outlay is aimed at accelerating clean-energy deployment, boosting domestic manufacturing, and improving grid integration, with solar positioned as the backbone of India’s energy transition.
A major highlight of the budget is the continued expansion of the PM Surya Ghar: Muft Bijli Yojana. The allocation for the rooftop solar scheme has been increased to ₹22,000 crore in Budget 2026, up from ₹20,000 crore in the budget estimates and ₹17,000 crore in the revised estimates for 2025–26. The scheme targets 40 lakh households by March 2026, and one crore households by 2027 through graded rooftop-solar subsidies and easy, collateral-free loans facilitated through a national digital portal. By directly linking solar adoption to household savings, the scheme aims to make clean energy a part of everyday life while reducing dependence on conventional grid power.
The budget narrative places strong emphasis on decentralised and residential solar as a tool to address long-standing challenges in the power sector. High transmission and distribution losses, which can reach 20–25% in some states, continue to strain utility finances. Rooftop solar is seen as a way to cut these losses, improve grid resilience, and reduce peak demand pressures. At the same time, by freeing up grid power, distributed solar indirectly supports emerging demand centres such as data centres, electric vehicle charging infrastructure, and green hydrogen production. This reflects a more integrated view of how solar can support wider economic and industrial growth.
Utility-scale solar also remains a key focus. Part of the enhanced renewable energy allocation is earmarked for grid-scale projects, transmission expansion, and the integration of variable renewables such as solar and wind. Continued investments in solar parks, hybrid projects, and Green Energy Corridors are highlighted as critical to evacuating power from resource-rich regions to demand centres. The budget provides visibility for large-scale capacity addition, helping developers plan projects with greater certainty while strengthening the backbone of India’s renewable grid.
Beyond deployment, Budget 2026 underscores the importance of a supportive and stable policy environment. It is framed as a continuation of long-term, growth-oriented policies that work alongside existing measures such as production-linked incentives, viability gap funding, and ongoing power-sector reforms. Industry feedback suggests that the higher allocation is crucial to sustaining investment momentum, though there is also a strong call for lower financing costs, faster approvals, and more predictable power purchase agreement processes to fully unlock private capital.
A notable addition to the clean-energy landscape is the emphasis on carbon management. The budget proposes a multi-year outlay of ₹20,000 crore for Carbon Capture, Utilisation and Storage. This signals recognition that decarbonisation cannot rely on renewable power alone and that emissions from hard-to-abate sectors such as power, cement, steel, and refining must also be addressed. By treating carbon as a managed resource rather than only a liability, the policy opens the door for cluster-based deployment and clearer utilisation pathways, potentially making carbon capture a foundational part of India’s industrial decarbonisation strategy.
Energy storage and manufacturing receive strong backing across multiple announcements. Customs duty rationalisation for lithium-ion cells used in battery energy storage systems and exemptions on key inputs such as sodium antimonate for solar glass are expected to improve cost competitiveness and grid stability as renewable penetration rises. The extension of duty exemptions on capital goods for lithium-ion cell manufacturing to include storage systems supports domestic capability creation and reflects the growing importance of storage in delivering reliable, round-the-clock clean power. At the same time, the gradual withdrawal of certain silicon-related exemptions from April 2026 sends a signal for manufacturers to accelerate domestic capacity creation and strengthen supply chains.
The budget also links solar growth with broader manufacturing and technology ambitions. The launch of India Semiconductor Mission 2.0, with an outlay of ₹40,000 crore, alongside additional funds for electronics manufacturing and growth capital, is expected to benefit components used in solar inverters, charge controllers, and tracking systems. This push goes beyond capacity expansion and points toward deeper technological sovereignty, including control systems, grid software, and advanced energy electronics that underpin modern solar and storage ecosystems.
Financing and institutional reforms form another important pillar. The proposed restructuring of power sector lending institutions is aimed at improving credit flow, efficiency, and predictability for large, long-gestation clean-energy projects. Faster and more reliable financing can ease constraints for developers and manufacturers, particularly as projects become larger and more complex. The budget also incentivises power distribution reforms and intra-state transmission augmentation, with states allowed additional borrowing subject to reform implementation. These measures are designed to strengthen the financial health of utilities and support the integration of more renewable capacity.
The National Green Hydrogen Mission continues to receive support, with an allocation of about ₹600 crore for FY 2026–27, higher than the previous year’s revised estimate. While the allocation remains modest, it signals continued policy commitment. Industry feedback highlights the need for clearer demand-side support to accelerate large-scale deployment of green hydrogen and clean fuels, especially as solar increasingly underpins hydrogen production.
Skills and workforce development are also addressed through investments in centres of excellence and industry-linked skilling initiatives. As solar, storage, and grid infrastructure expand rapidly, a skilled workforce is seen as essential to ensure timely execution, safety, and system optimisation. This focus aligns with India’s broader target of achieving 500 GW of non-fossil capacity by 2030.
Rupal Gupta, Founder, MD & CEO, TrueRE Oriana Power
“Budget 2026–27 marks a key shift by recognising that decarbonisation needs both renewables and carbon management. The ₹20,000 crore CCUS outlay is timely and can anchor industrial decarbonisation if deployed at scale. Support for storage, manufacturing, and PFC–REC restructuring strengthens the ecosystem, though clarity on CCUS contracting, MRV, and payment security will be critical for bankability.”
Kushagra Nandan, Co-Founder, LNK Energy
“The Union Budget 2026 strengthens India’s renewable ambitions through clear targets, manufacturing support, and financing reforms. Duty exemptions for solar glass inputs and battery storage manufacturing improve competitiveness, while allocations for solar parks, PM-KUSUM, and Green Energy Corridor enhance visibility. The focus on execution now will determine how effectively these measures translate into sustained sector growth.”
Rajiv Ranjan Mishra, Managing Director, Apraava Energy
“The Union Budget 2026 presents a balanced approach focused on reliability and long-term resilience. Support for battery storage manufacturing and duty relief on solar glass inputs will aid grid flexibility. The ₹20,000 crore CCUS outlay enables decarbonisation of hard-to-abate sectors, while ISM 2.0 strengthens domestic manufacturing critical to future energy systems.”
Dr. Chetan Shah, Chairman & Managing Director, Solex Energy Limited
“The Union Budget 2026–27 places manufacturing at the centre of India’s energy transition. Extended duty exemptions for batteries, storage systems, and critical minerals provide long-term certainty for domestic value addition. The push for solar integrated with storage and advanced manufacturing supports India’s ambition to become a global clean-energy manufacturing hub.”
Tanmoy Duari, CEO, AXITEC Energy India Pvt. Ltd.
“We welcome Budget 2026 as a forward-looking blueprint for India’s energy transition. The ₹1,775 crore solar grid allocation and duty exemptions on solar glass inputs will strengthen manufacturing competitiveness. Restructuring of REC and PFC will improve financing flows. Greater support for storage, grid integration, and distributed generation can further accelerate a resilient clean-energy future.”
Prashant Mathur, CEO, Saatvik Green Energy
“Budget 2026 delivers long-term clarity for India’s solar manufacturing ecosystem. Higher capex, increased PM Surya Ghar allocation, and duty exemptions for battery storage and solar glass inputs strengthen cost competitiveness. Rationalised customs policies and support for CCUS and nuclear reflect a technology-agnostic approach, enabling manufacturers to scale and position India as a global export-ready hub.”
Jaideep N. Malaviya, Managing Director, Malaviya Solar Energy Consultancy
“The ₹40,000 crore allocation for electronics manufacturing, along with a ₹10,000 crore growth fund, will boost domestic production of inverters, charge controllers, and tracking sensors used in the solar industry. These measures also open new export opportunities and strengthen India’s clean-energy manufacturing ecosystem.”
Manan Thakkar, Co-Founder & Managing Director, Prozeal Green Energy Limited
“The Union Budget 2026–27 presents a growth-oriented roadmap aligned with Viksit Bharat. Reforms across taxation, power, mining, and finance strengthen competitiveness. Extending BCD exemptions for capital goods used in lithium-ion cell manufacturing for battery storage will accelerate clean-energy adoption and create strong multiplier effects across manufacturing.”
Shobit Rai, Co-Founder & Managing Director, Prozeal Green Energy Limited
“Budget 2026 prioritises power sector reforms to sustain economic growth. Incentives for distribution reforms and transmission augmentation will support advanced infrastructure and energy storage. The National Clean Tech Manufacturing Mission and BCD exemption on sodium antimonate for solar glass strengthen domestic manufacturing and enhance India’s clean-energy ecosystem.”
Vinay Thadani, Director & CEO, GREW Solar
“The Union Budget 2026 reinforces energy security and Aatmanirbharta through strong support for manufacturing and technology-led ecosystems. Investments in ISM 2.0 and domestic solar components will reduce import dependence, boost exports and employment, and accelerate India’s clean-energy transition, positioning renewable manufacturing as a key growth driver.”
Akshat Jain, CEO, KLK Ventures
“Budget 2026 is a pivotal moment for India’s solar sector. Reduced duties on panels and components will lower costs and accelerate adoption. Exemptions on solar glass inputs and lithium-ion battery manufacturing enhance domestic competitiveness, strengthen supply chains, and fast-track the transition to clean energy while supporting Make in India.”
Amod Anand, Co-Founder & Director, Loom Solar
“Budget 2026 signals a shift from capacity expansion to technological sovereignty. Support for ISM 2.0, rare-earth corridors, and critical mineral processing strengthens solar and storage value chains. Duty exemptions for lithium-ion cells and solar glass inputs reduce dependence on imports and form the backbone of India’s long-term energy security.”
Girish Tanti, Chairman, IWTMA
“Budget 2026 reflects resilience and commitment to growth amid global uncertainty. Higher capital and energy expenditure, focus on renewables, grid modernisation, and energy security will accelerate India’s transition. Atmanirbhar Bharat initiatives, R&D incentives, and bond market reforms together lay the foundation for sustainable and inclusive economic growth.”
Simarpreet Singh, Executive Director & CEO, Hartek Group
“Union Budget 2026–27 focuses on building stronger capabilities for India’s energy transition. Industry-linked skilling, duty exemptions on solar glass inputs, and NIL customs duty on lithium-ion manufacturing capital goods will boost domestic manufacturing, accelerate storage adoption, and provide long-term confidence for investments in power and renewables.”
Dr. Faruk G. Patel, Founder, Chairman & Managing Director, KP Group
“Budget 2026 addresses key industry expectations by strengthening support for renewables, storage, grid infrastructure, and critical minerals. Rare-earth corridors, incentives for lithium and nickel processing, duty reductions, and a ₹20,000 crore CCUS scheme enhance supply-chain security and reinforce India’s broader decarbonisation and clean-energy strategy.”
Vinod Sharma, Director, Joint Solar
“With over 92 GW of operational solar capacity and renewables nearing 46% of total power capacity, India has built a strong base. Budget measures supporting grid integration, storage, financing clarity, and domestic manufacturing will be essential to sustaining momentum and ensuring long-term project viability.”
Sanjay Garg, Director, Shweta Solar Pvt. Ltd.
“India’s renewable sector has reached meaningful scale, with solar playing a major role. Budget focus on system stability, storage support, and manufacturing competitiveness can accelerate rooftop and distributed solar growth. Clear incentives and long-term financing frameworks will help meet both utility-scale and decentralised demand efficiently.”
Sanjay Gupta, CEO, Apollo Green Energy Limited
“This Budget treats the energy transition as a holistic mission centred on manufacturing strength and resilience. Support for solar glass inputs, battery storage manufacturing, and critical minerals strengthens project economics and supply chains. These measures ensure India’s solar growth is structurally resilient and globally competitive.”
Arif Aga, Director, SgurrEnergy
“The focus on National Centres of Excellence for Skilling is vital for building a specialised workforce for large-scale renewable, green hydrogen and clean-energy projects. This emphasis on capacity building will support cost-efficient deployment and play a key role in achieving India’s 500 GW renewable target by 2030.”
Overall, Union Budget 2026 reflects a more balanced and integrated approach to the energy transition. It combines strong support for solar deployment with manufacturing, storage, grid infrastructure, carbon management, and skills development. Rather than viewing clean energy only through the lens of capacity addition, the budget addresses the underlying building blocks that determine long-term resilience and competitiveness. For the solar sector, this provides clearer direction, greater visibility, and renewed confidence that India’s clean-energy growth will be not only rapid, but also structurally strong and globally competitive.
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