Govt Increases Solar Sector Budget by 60% in FY26

The Indian government has ramped up its support for the solar sector in the FY26 Budget, allocating Rs 242 billion (Rs 24,200 crore), marking a 60% increase compared to the previous year. This significant boost demonstrates the government’s continued push for renewable energy, especially solar power, which plays a key role in the nation’s energy transition.

In particular, the budget highlights the government’s focus on flagship programs like the PM Surya Ghar Muft Bijli Yojana, aimed at installing 10 million solar rooftops in residential areas. This initiative saw an 80% increase in funding, bringing its allocation to Rs 200 billion for FY26. The scheme offers subsidies for solar systems, with up to Rs 78,000 available for larger installations. The budget allocation for rooftop solar installations has surged nearly three times higher than the initial FY25 estimate, reflecting the government’s drive to expand access to clean energy.

The PM-KUSUM scheme, which provides solar-powered pumps for farmers, also saw a significant funding rise, with the allocation increased to Rs 26 billion for FY26, up from Rs 15 billion in FY25. This boost is part of the government’s effort to integrate solar energy into agriculture, benefiting both farmers and the environment.

In addition, the government’s push for clean tech manufacturing through the National Manufacturing Mission is expected to promote domestic production of solar equipment, further reducing reliance on imports and supporting India’s clean energy goals.

However, the budget did leave some gaps, particularly in incentives for battery energy storage, which are crucial for balancing renewable energy supply and demand on the grid.

With these investments, India is set to accelerate its transition to a sustainable energy future, providing significant support to both residential users and the agricultural sector, while also strengthening its position as a leader in the global solar market.