The Union Budget 2026, on Sunday, has delivered a major push to solar energy, sharply raising allocations for two flagship schemes. Funding for the Kisan Urja Suraksha Evam Uthaan Mahabhiyan (KUSUM) has been nearly doubled, while allocations for the PM Surya Ghar Muft Bijli Yojana have been increased by 10 per cent.
The Pradhan Mantri Surya Ghar: Muft Bijli Yojana has received an increased ₹2,000 crore in the Union Budget 2026, taking its allocation to ₹22,000 crore from ₹20,000 crore in the previous year’s Budget Estimates, which is an increase of 10 per cent.
However, the allocation marks a sharper 29 per cent rise over the Revised Estimates of ₹17,000 crore for 2025-26. The government has been prioritising the rooftop solar scheme to scale up clean energy generation, expand household-level solar adoption, and reduce electricity costs for consumers.
The hike for PM Surya Ghar Muft Bijli Yojana underscores a push to create local solar power-producing units, which can make them independent of the centralised power-producing supply infrastructure and reduce their dependency on the government. A 3 kW system is capable of generating more than 300 units of electricity per month on average for a household.
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Another KUSUM's fund allocation has been increased from around 2600 to 5000 crores. The scheme was launched in 2019 and is designed to enhance farmer income and de-dieselise the agricultural sector. It provides 60% subsidies for solar pump installation and 30% for grid-connected plants.
The sharp increase in solar allocations signals a strategic shift from intent to scale in India’s renewable push. By nearly doubling funds for KUSUM, the government is giving a rapid push to the transition of agriculture away from diesel-dependent irrigation, cutting down emissions and also reducing input costs for farmers.
"I propose to extend the basic customs duty exemption given to capital goods used for manufacturing lithium-ion cells for batteries to those used for manufacturing lithium-ion cells for battery energy storage systems also," FM Nirmala Sitharaman in her budget speech on customs duty exemptions said, "I propose to exempt the basic customs duty on import of sodium antimonate for use in the manufacturing of solar glass."
With the changing global approach towards renewable energy, India has also put a growing emphasis on energy storage and transmission infrastructure, and is making emphatic policy efforts to strengthen domestic supply chains and build a sustainable network in the solar energy industry. India's neighbour, China, is the unchallenged number one among the global solar energy producers, leading in manufacturing, capacity and generation, boasting over 887 GW of capacity by 2024–2025. The United States ranks second with over 300 GW of production, followed by India with more than 130 GW as the third-largest producer.
