On 1st February, 2026, Finance Minister Nirmala Sitharaman presented the Union Budget 2026–27 for India. This budget strengthened India’s position as a solar energy hub. It brings good news for both the solar manufacturers and the customers interested in solar installation. Additionally, the focus on subsidies and PLI indicates strong support for the decentralized solar growth in India.
Let’s understand how the solar sector benefits from the Budget 2026-27, and its impact on manufacturers and customers.
Highlights Of Budget 2026-27 For The Solar Energy Sector
32% increase in budgetary allocation
The recent union budget has allocated INR 30,539.36 for solar energy programs (source). The solar industry in India received strong government backing through a 32% increase in funding from the FY 26 Revised Estimates (RE) to current support levels. This is an essential requirement for India to achieve its solar energy objectives, such as installing 1 crore residential solar systems.
Empowering solar-powered agriculture with PM KUSUM Yojana
Agriculture is one of the most prominent sectors in India. The Budget 2026-27 has doubled its budgetary allocation, increasing it to INR 5,000 crore from INR 2,560 crore in the Budget 2024-25. This increases the subsidies offered to farmers for installing solar pumps and other solar projects.
Supporting residential solar installation with PM Surya Ghar Muft Bijli Yojana
The PM Surya Ghar Muft Bijli Yojana has been one of the most successful government initiatives to encourage the adoption of solar energy. Therefore, for the Budget 2026-27, they have increased the allocation from INR 20,000 crore to INR 22,000 crore. This move is significant for increasing the number of residential solar projects.
Reducing Basic Custom Duty (BCD) on solar-related imports
One of the most crucial benefits of the new budget is for the manufacturers. Finance Minister Nirmala Sitharaman has proposed to significantly reduce import duties on raw materials and machinery for solar manufacturing.
The Indian solar manufacturing companies got relief on the following:
- 0% BCD on import of Sodium Antimonate for solar glass manufacturing
- Import duties on solar cells reduced from 25% to 20%
- Import duties on solar modules decreased from 40% to 20%
- Reduced tax on the import of solar machinery
- Proposal to reduce GST on solar projects with Battery Energy Storage Systems (BESS)
- Significant increase in the PLI for solar manufacturing companies
These incentives encourage the establishment of new solar panel manufacturers to meet rising demand in India. It will also increase the in-house production of solar panels under the Make in India initiative.
These were the highlights for the solar industry, but what does it mean for you?
Benefits Of The Budget 2026-27 For Solar Manufacturers
The Budget 2026-27 opens new gates for existing and new Solar manufacturers in India. Here’s why:
Reducing production cost
The new budget proposes various tax exemptions for vital chemicals, solar cells, solar modules, and machinery used in solar panel production. This significantly reduces production costs. Thus, new firms can start production, and existing firms can be more profitable.
Support innovation & attract investors
The new budget allows manufacturers to import necessary goods to develop innovative solar solutions. The funding supports both new companies and international investor interest. The budget will enhance India’s status as one of the world’s top solar energy producers.
Increase in demand
Increased subsidies for agricultural and residential projects will boost demand for solar panels. Thus, the manufacturers can benefit from strategic promotion and pricing.
Benefits Of The Budget 2026-27 For Homeowners
The benefits for manufacturers can be translated into customer benefits.
Lower installation cost
As the cost of raw materials and production decreases, so does the price of solar panels. While it might take a few months to show effect, those interested in solar panel installation should connect with companies like Sunora Solar to know the best prices.
Reliable power supply
With solar innovation and easier access to high-quality raw materials, you can build a reliable power supply at your home with solar panels. It helps you switch to sustainable energy and reduce your carbon footprint.
Faster installation
With the PLI scheme and reduced duties on raw materials, the number of solar panel manufacturers will increase. Thus, you can expect faster solar panel installation for any project.
The future of Solar Energy is bright. Sunora Solar is dedicated to being the best contributor to making India a solar energy powerhouse with high-quality, affordable solar panels. Contact us now for any queries.
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