Budget 2026 | India allocates ₹1775 crore to solar power grids
By Navneet Singh
The Union Budget of 2026 on Sunday (February 1) has allocated ₹1775 crore to the solar power (grid) segment, reinforcing India’s commitment to renewable energy transition. Last year, government had allotted over ₹1,500 crore (budget estimate) to the segment.
In recent years, the country’s solar power sector has experienced rapid growth, aligning with the government’s agenda for sustainable development and energy security. A total of ₹4,757 crore was earmarked in the FY23-24 revised estimate. In 2022-23, the allocation was ₹3,304.03 crore, a record high compared with ₹2,369.13 crore in 2021-22 and ₹2,449.65 crore in 2020-21. These allocations mark a transformative period in financial planning and resource distribution, with each year setting a new benchmark for future growth.
| Financial Year | Allocation to Solar Power (Grid) |
| 2020–21 | ₹2,449.65 crore |
| 2021–22 | ₹2,369.13 crore |
| 2022–23 | ₹3,304.03 crore |
| 2023–24 (RE) | ₹4,757 crore |
| 2025–26 (RE) | ₹1,000 crore |
| 2026–27 (BE) | ₹1,775 crore |
India’s solar power sector
The Government of India has launched several schemes like Solar Parks, Viability Gap Funding (VGF), Central Public Sector Undertaking (CPSU) scheme, Defence scheme, Canal bank & Canal top scheme, Bundling Scheme, and Grid Connected Solar Rooftop Scheme. These initiatives have contributed to the country’s remarkable progress in solar power deployment. Recently, the country surpassed Japan to rank as the world’s third-largest solar power generator.
Solar Park Scheme: India has launched the development of solar parks across the country to promote large-scale solar power generation. The National Solar Mission supports the establishment of these parks, which provide developers with ready infrastructure, lowering the cost of setting up solar plants.
Viability Gap Funding (VGF): This scheme helps solar power developers by bridging the financial gap between the project’s actual cost and what is considered commercially viable, making it easier for developers to secure financing for solar projects.
Central Public Sector Undertaking (CPSU) Scheme: The CPSU scheme involves the setting up of solar power projects by public sector companies. This initiative has contributed significantly to meeting India’s renewable energy targets.
Fundamentally solar power could be divided into two types:
a) On-grid solar project
b) Off-grid solar project
On-grid solar systems are connected to the users local utility’s grid, meaning if solar system produces more energy than an user is consuming, the excess energy is sent to the grid and the user earn credits. The utility company essentially acts as the battery storage, so that users don’t need to purchase an expensive backup system. This is why most residential homes opt for on-grid solar.
Off-grid solar systems, on the other hand, are not connected to the grid or utility company. This means the user is 100% self-sustaining and relies solely on solar energy production. However, this also means the user needs to purchase a backup battery system, which can be expensive, bulky and less environmentally friendly.
This article has been republished from The CNBCTV18.