The Indian solar sector has received a major boost. According to the Union Budget for fiscal year 2026-27 (FY 2026) presented by Indian Finance Minister Nirmala Sitharaman, the Ministry of New and Renewable Energy (MNRE) has been allocated a total of ₹329.1467 billion, a 24% increase year-on-year. Within this, funding specifically for the solar sector has risen by 32% to ₹305.3936 billion, significantly higher than the ₹242.24 billion allocated in the previous fiscal year. Key highlights include subsidies for residential solar and customs duty exemptions for solar manufacturing inputs.
The budget allocations for various sub-sectors in FY 2026 are as follows:
- Residential Solar (PMSGMBY): The largest share of the budget—₹220 billion—has been earmarked for the flagship ‘PM Surya Ghar Muft Bijli Yojana’ (PMSGMBY) scheme, up from ₹200 billion last fiscal. Launched in February 2024 with a total outlay of ₹750.21 billion, the scheme aims to provide 300 units of free electricity monthly to 10 million households and achieve 30 GW of rooftop solar capacity. By the end of December 2025, nearly 2.4 million households had installed solar systems under this scheme, with a cumulative capacity of 7 GW.
- Agri-Voltaics (PM-KUSUM): This program has been allocated ₹50 billion, a substantial increase from the ₹26 billion in the previous fiscal. As of October 2025, the program has deployed over 900,000 standalone and grid-connected solar pumps. The government has revised the solar capacity target under this scheme upward from 25.75 GW to 30.8 GW, with the completion deadline extended to March 31, 2026.
- Grid-Connected Solar Projects received ₹17.75 billion, and the National Green Hydrogen Mission received ₹6 billion.
To support domestic manufacturing, the budget announced an exemption on the Basic Customs Duty (BCD) for sodium antimonate used in manufacturing solar glass. This aims to reduce production costs and improve raw material supply. Furthermore, BCD has been exempted for capital goods used in manufacturing lithium-ion batteries for Battery Energy Storage Systems (BESS), as well as for imported goods required for setting up nuclear power plants.
