In her Union Budget 2026 presentation on February 1, 2026, Finance Minister Nirmala Sitharaman announced a targeted allocation of ₹1,775 crore specifically for expanding grid-connected solar power projects.
While the broader solar sector received a massive ₹28,775 crore boost (including rooftop and agricultural solar), this specific ₹1,775 crore outlay is designed to stabilize the national grid and support large-scale solar parks as India marches toward its 500 GW renewable energy target.
1. Solar Sector Budget Breakdown (FY27)
The government’s strategy for 2026 focuses on a “three-pronged” solar expansion: residential, agricultural, and utility-scale grid power.
| Scheme / Segment | Allocation (Budget 2026) | Focus Area |
| PM Surya Ghar Muft Bijli Yojana | ₹22,000 Crore | 1 Crore Household Rooftop Solar |
| PM-KUSUM Mission | ₹5,000 Crore | Agricultural Pumps & Farm Solarization |
| Grid-Connected Solar Projects | ₹1,775 Crore | Solar Parks & Utility Infrastructure |
| Total Solar Outlay | ₹28,775 Crore | Comprehensive Solar Ecosystem |
- Growth Over Revised Estimates: The ₹1,775 crore for the solar grid represents a significant jump from the ₹1,000 crore revised estimate (RE) of the previous year, signaling a return to aggressive infrastructure building.
2. Strengthening “Aatmanirbhar” Manufacturing
To ensure the ₹1,775 crore grid allocation results in domestic growth rather than import surges, the Budget introduced critical customs duty reforms:
- Solar Glass Inputs: The basic customs duty on sodium antimonate (a key raw material for solar glass) has been reduced from 7.5% to Nil.
- Capital Goods Exemption: Specified capital goods required for the manufacture of lithium-ion cells and solar modules will continue to attract nil duty, lowering the cost of setting up new factories.
- Component Duty Correction: The Budget rationalized duties to correct “inverted duty structures,” ensuring that raw materials are not taxed higher than finished solar modules.
3. The Missing Link: Energy Storage & Transmission
Industry experts note that the ₹1,775 crore grid outlay is paired with a broader push for “Round-the-Clock” (RTC) power:
- BESS Integration: The Budget emphasized Battery Energy Storage Systems (BESS), extending duty relief on lithium-ion battery scrap to support domestic recycling.
- Green Energy Corridor: An allocation of ₹599.99 crore was set aside specifically for the Green Energy Corridor, which is essential for evacuating solar power from remote parks to industrial hubs.
4. Market Impact: Solar Stocks to Watch
The sustained and predictable funding has created high visibility for major players in the Indian solar value chain. Following the announcement, several stocks saw positive movement in the Sunday special trading session:
- Utility Giants: NTPC Green Energy and Adani Green Energy.
- Module & Cell Makers: Waaree Energies, Premier Energies, and Vikram Solar.
- Ancillary Players: Borosil Renewables (Solar Glass) and Tata Power (EPC & Rooftop).
Conclusion: From Headlines to Execution
By earmarking ₹1,775 crore for grid-connected projects, the 2026 Budget moves the solar conversation from “capacity addition” to “system reliability.” While the PM Surya Ghar scheme steals the headlines with its ₹22,000 crore outlay, it is the utility-scale grid funding that ensures the overall power system doesn’t collapse under the weight of intermittent renewable energy. As India overtakes Japan to become the world’s third-largest solar producer, this allocation provides the “emergency repair manual” and growth capital the grid desperately needs.
