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The government continues the push for the solar sector in the FY26 Budget, with a year-on-year (YoY) rise of over 60 per cent to Rs 242 billion (24,200 cr), according to a report by Jefferies.
The report highlighted the government's continued push for renewable energy, particularly through its flagship rooftop solar and solar pump schemes. Jefferies said, "FY26 budget gives a continued push to solar sector and saw the extension of flagship schemes of solar rooftop, solar pumps, with budget allocations rising 3.2x and 1.7x vs FY25 budget estimates." A major boost has been given to the PM Surya Ghar Muft Bijli Yojana in the budget, which aims to install 10 million solar rooftops in residential areas. The allocation for this scheme has been raised by 80 per cent to Rs 200 billion for FY26, compared to the revised estimate for FY25. When compared to the initial FY25 Budget Estimate (BE), the allocation has surged by nearly 3.2 times. The scheme was approved by the government on February 29, 2024, and has a total outlay of Rs750 billion to be implemented by FY27. It provides a 60 per cent subsidy for solar systems up to 2kW capacity and 40 per cent subsidy for additional capacity up to 3kW, with a maximum cap at 3kW. This translates into a subsidy of Rs 30,000 for a 1kW system, Rs 60,000 for 2kW, and Rs 78,000 for 3kW or higher systems at current benchmark prices. The PM-KUSUM scheme, which promotes the installation of solar-powered pumps for farmers, has also received a strong allocation of Rs 26 billion for FY26, a significant jump from Rs 15 billion in the FY25 Budget Estimate. This reflects the government's focus on expanding solar energy use in the agricultural sector. The budget also emphasizes Clean Tech manufacturing through the National Manufacturing Mission, which is expected to support domestic production of solar equipment. However, the report noted that the budget lacks clarity on incentives for battery energy storage, which is a crucial component for integrating renewable energy into the power grid. The increased budgetary support signals the government's commitment to expanding the solar energy sector and reducing dependence on conventional energy sources. With higher subsidies and strong policy backing, India is aiming to accelerate its transition towards clean and sustainable energy solutions. (ANI)
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