In the Union Budget 2026–27, Finance Minister Nirmala Sitharaman restated India’s commitment to a clean energy transition, placing solar power at the center. Aligned with the Viksit Bharat vision, the Budget continues to support clean energy as a key driver of economic and infrastructure growth, strengthening India’s evolving solar energy model. With higher capital spending and targeted incentives for domestic manufacturing, energy storage, and grid upgrades, the Budget lays the foundation for a stronger and more resilient renewable energy ecosystem, keeping solar and storage at the core of India’s long-term power strategy.
For developers, industries, utilities, and major EPC companies in India, such as Hartek Group, this Budget sends a clear message: solar power and energy storage will remain at the core of the country’s long-term growth and energy transition strategy.
“Did You Know? India is among the world’s fastest-growing solar markets, and studies suggest that integrating solar power with smart grid technologies can reduce transmission losses by up to 30%, significantly improving efficiency and grid reliability. (Source)”
Key Takeaways
- Budget 2026 strongly reinforces India’s solar-led clean energy strategy.
- Increased capital expenditures (capex) and renewable allocations enhance long-term investment confidence.
- The solar energy model remains central to achieving 50% non-fossil capacity before 2030.
- A ₹1,000 crore VGF for BESS will accelerate the adoption of 24/7 clean power.
- ₹599.99 crore allocation for Green Energy Corridors will strengthen renewable power evacuation and grid integration.
- ₹20,000 crore commitment over five years for CCUS highlights India’s broader, multi-sector decarbonisation strategy.
- Support for domestic manufacturing strengthens India’s renewable supply chain.
- Experienced EPC companies are critical for reliable, grid-ready solar deployment.
Union Budget 2026–27: Reinforcing India’s Clean Energy Direction
The Union Budget 2026–27 signals the government’s continued push toward a clean energy–led growth path, with a strong emphasis on solar power. One of the key highlights is the increase in overall capital expenditure to ₹12.21 lakh crore, a move that strengthens long-term investment confidence across infrastructure, power, and renewable energy sectors.
Renewable energy received higher allocations under several schemes, with a primary focus on accelerating deployment and strengthening domestic manufacturing. This two-pronged strategy ensures that India not only adds new solar capacity but also builds a robust local supply chain to support long-term growth.
In addition, the Budget allocated ₹599.99 crore for Green Energy Corridors, a critical enabler for renewable power evacuation. These corridors will ease grid congestion and ensure efficient integration of solar energy into India’s power system.
One of the flagship programmes, the PM Surya Ghar Muft Bijli Yojana, received a funding boost of nearly 29%, reflecting the government’s strong intent to promote rooftop solar adoption across households. This initiative is expected to bring solar power to millions of homes, reducing electricity bills while also lowering dependence on conventional power sources.
Solar Energy Model: The Backbone of India’s Non-Fossil Ambition
The solar energy model will be a key driver in achieving India’s renewable energy ambitions. Being scalable, cost-effective, and rapidly deployable, solar power will contribute significantly to India’s target of reaching 50% non-fossil fuel electricity capacity well before 2030.
The solar sector has come a long way over the past decade, from being an alternative energy source to becoming a primary power solution. With a mix of utility-scale solar parks, industrial captive plants, and rooftop installations, the entire ecosystem of power generation and consumption is undergoing a fundamental transformation.
However, scaling alone will not address all challenges. The future of solar energy will depend heavily on effective grid integration, robust energy storage solutions, and high-quality project execution. At this stage, experienced solar EPC contractors and power infrastructure experts are essential to delivering reliable and long-lasting projects. 
Strengthening Domestic Manufacturing Through Policy Support
Budget 2026 introduced targeted fiscal measures aimed at improving cost competitiveness and encouraging indigenous manufacturing across the renewable value chain.
A key highlight is the basic customs duty (BCD) exemption on capital goods used for manufacturing Lithium-Ion cells for Battery Energy Storage Systems (BESS). This step is expected to significantly boost India’s energy storage ecosystem by reducing project costs and encouraging large-scale domestic production.
Furthermore, a customs duty exemption was announced on sodium antimonate, a crucial raw material in solar glass manufacturing. Domestic solar module manufacturers stand to benefit from this move through lower input costs and it will also help India become more self-reliant in solar components production.
Reflecting on these developments, Hartek Singh, CMD, Hartek Group, stated:
“We welcome the government’s support for new energy – the basic customs duty (BCD) exemption on capital goods used for manufacturing Lithium-Ion Cells for Battery Energy Storage Systems, which will strengthen India’s energy storage ecosystem. The exemption of customs duty on sodium antimonate for solar glass manufacturing is a timely step that will support domestic solar manufacturing, lower costs, and reinforce India’s clean energy transition.”
Battery Energy Storage Systems (BESS): Enabling 24/7 Clean Power
The Budget 2026–27 announcement that is most likely to have the biggest impact is the sharp rise in Viability Gap Funding (VGF) for Battery Energy Storage Systems to ₹1,000 crore, representing a nine-fold jump.
Battery storage is no longer optional, it is essential for the next phase of renewable growth. Solar energy generation, being intermittent, needs battery storage solutions to be able to utilize the excess energy generated during the day for periods when there is no sunlight.
This major storage investment will:
- Improve grid stability and reliability
- Support large-scale solar and hybrid projects
- Enable round-the-clock clean energy for industries and utilities
- Reduce dependence on fossil-fuel-based peaking power
For every big solar energy project in India, correlating the battery will become a strategic decision rather than a matter of choice.
India’s Solar Expansion and the Role of Top EPC Companies in India
With the rapid increase in solar capacity, the quality of execution turns into a defining feature separating average from high performers. This is where the top EPC companies in India play a critical role.
A solar energy project in India today involves more than installing panels. It requires:
- Advanced tools for engineering systems and designs
- Grid integration and evacuation planning
- Compliance with evolving regulatory frameworks
- Long-term performance optimisation
Top-tier EPC contractors ensure that the projects are on schedule, they are connected to the grid without issues, and over the 25+ year life cycle the performance will still be efficient.
Alongside renewables and storage, the Union Budget 2026–27 also commits ₹20,000 crore over the next five years for Carbon Capture, Utilisation and Storage (CCUS). This investment underlines the government’s intent to address emissions from hard-to-abate sectors such as cement, steel, refining, and thermal power.
Smart Grids and Renewable Energy Systems: The Missing Link
To increase the share of renewables, India’s traditional power grids will need to transform into smart, adaptable, and resilient networks. When integrated with smart grids, renewable energy systems offer advantages such as real-time monitoring, demand balancing, and faster fault resolution.
Smart grids help address the challenge of solar variability, enabling the grid to absorb larger volumes of clean power without compromising overall reliability.
Hartek’s Role in India’s Clean Energy Transition
The Group operates at the intersection of solar EPC execution and advanced power infrastructure. With deep expertise in solar projects, substations, and smart grid solutions, it delivers seamless, future-ready renewable energy systems.
By bridging solar generation with robust grid integration and storage readiness, the company serves as a trusted partner for industries, utilities, and developers seeking alignment with India’s clean energy goals while ensuring long-term operational reliability.
Turning Budget Vision into High-ROI Reality
India’s clean energy future is no longer a distant vision; it is being actively built today. With the solar energy model at the core, battery storage acting as a critical enabler, and strong policy backing from Budget 2026, the momentum toward a sustainable power ecosystem is accelerating.
However, capitalizing on these new incentives requires navigating complex grid integration challenges and ensuring seamless execution. Backed by deep expertise in Solar EPC in India, power systems, and smart grids, Hartek Group ensures your infrastructure is not just compliant, but profitable. We help developers and industries maximize their Commercial Solar ROI by turning policy intent into reliable, on-ground impact.
Frequently Asked Questions (FAQs)
1. What is the significance of Budget 2026 for the solar energy sector?
The Budget 2026 apart from increasing funding also supports domestic manufacturing and strengthens energy storage, thereby establishing an excellent growth environment for solar energy projects in India.
2. In what ways is battery storage beneficial to solar power?
Battery Energy Storage Systems conserve surplus solar energy and release it during non-sunlight hours, thus ensuring grid stability and providing clean electricity all day long.
3. How do top EPC companies in India contribute to renewable growth?
By ensuring proper project design, efficient execution, seamless grid integration and long-term asset performance, they lay the foundation for a successful and large-scale renewable deployment.
4. How do Renewable Energy systems gain from smart grids?
Smart grids enable better monitoring, demand balancing, and fault management, allowing higher renewable penetration without affecting reliability.
5. How does Hartek help India to make a transition to clean energy?
Hartek delivers integrated solar EPC, power infrastructure, and smart grid solutions that support scalable, reliable, and future-ready renewable energy systems.
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