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Union Budget 2026–27 Delivers Strong Push to Solar and Renewables

The Union Budget 2026–27 has reinforced India’s commitment to clean energy, with a significant increase in funding for the solar and renewable energy sector compared to the previous year. The government has sharply raised allocations for the Ministry of New & Renewable Energy (MNRE), underlining solar power’s central role in India’s energy transition and long-term energy security goals.

The MNRE has been allocated Rs32,914.67 crore for FY 2026–27, marking a rise of over 30% from Rs25,301.22 crore in FY 2025–26. A substantial portion of this increase has been directed toward solar energy, which continues to dominate the renewable energy landscape. Solar-specific allocations have grown by more than 32% year-on-year, increasing from Rs23,124.36 crore to Rs30,539.36 crore, reflecting sustained policy support for both utility-scale and distributed solar projects.

A key driver of this growth is the PM Surya Ghar: Muft Bijli Yojana, which has received Rs22,000 crore in the current budget, up from Rs17,000 crore in the previous year’s revised estimates. The enhanced funding is expected to accelerate rooftop solar adoption across households, reduce electricity costs for consumers, and contribute to decentralised clean power generation.

Beyond generation, the budget has also focused on strengthening solar infrastructure and domestic manufacturing. Higher allocations for solar grid connectivity, along with customs duty exemptions for critical mineral processing and lithium-ion cell manufacturing, aim to reinforce the domestic value chain. Support for inputs such as sodium antimonate for solar glass further signals the government’s intent to reduce import dependence and improve supply-side resilience.

While wind and other renewable segments continue to receive policy backing, their budgetary allocations have remained relatively stable compared to solar, highlighting solar energy’s position as the backbone of India’s renewable strategy. Complementary investments in green hydrogen and expanded financing capacity through institutions like IREDA are expected to further enhance the integration of solar power with storage and emerging clean energy technologies.

Overall, the Union Budget 2026–27 represents a decisive step forward for the solar sector, shifting the focus from capacity expansion alone to building a robust, self-reliant renewable energy ecosystem that supports India’s climate goals, manufacturing ambitions, and energy independence.