The Budget 2026-27 has been announced, bringing good news for the Indian Solar Industry. The steady growth of manufacturers and the rising demand for solar panels from homeowners and farmers indicate a strong position for the solar industry. Therefore, the government has made many announcements to fast-track the transition to carbon neutrality and increase the use of sustainable energy.
But how is the Budget 2026-27, proposed by Finance Minister Nirmala Sitharaman, powering India’s solar industry? We have compiled this list of benefits that this budget offers to the solar sector.
Highlights of Union Budget 2026-27: Boosting The Indian Solar Industry
One of the key focuses of this budget was to empower solar panel manufacturers by providing lower or nil Basic Customs Duty on imports and to increase the PLI budget. Additionally, the government has significantly increased subsidies for homeowners and farmers installing solar systems. Let’s understand how the Union Budget 2026–27 is powering growth in India’s solar industry.
Higher Budget Allocation
One of the major highlights of this budget is the increased fund allocation to the renewable energy resources, especially the solar sector. For 2026-27, the government has increased the budget by a whopping 32% and introduced many incentives to improve the implementation of large-scale solar parks, grid upgrades, and decentralised solar systems.
Additionally, the budget is more focused on supporting the local solar manufacturing companies under the Swadeshi (Make in India) scheme. It will ultimately strengthen India’s position in the global market.
Boost Local Solar Manufacturing Projects
The government has proposed increasing the allocation of the PLI scheme to boost domestic production of solar panels and other solar components. The goal is to reduce reliance on different countries and attract more investors. Furthermore, the number of solar manufacturing projects also increases the employment rate, especially in rural areas.
The local supply chain also reduces the production time and cost. Additionally, it can reduce the waiting period for solar panel installation by enabling faster manufacturing.
Reduced Duties On Import Of Raw Material
Many solar panel components are imported for quality assurance. The higher taxes make it difficult for new manufacturers to enter the market. Therefore, to encourage domestic solar production companies, the Union Budget has significantly reduced the Basic Custom Duty on solar cells and modules imports. They have nullified the tax on the import of Sodium Antimonate used in solar glass production.
Furthermore, there would be lower customs duty on the import of solar machinery. This significantly reduces the setup cost for solar manufacturers, leading to more domestic production.
Reduced Solar Panel Manufacturing Cost
As a result of reduced customs duties, the price of solar panels can be significantly reduced. However, it is important to consider the prices of other elements used in the manufacturing process. It might take a few months to see the impact of these policies and exemptions. Connect with a trusted solar company, like Sunora Solar, to know the best prices.
Incentives For Rooftop Solar Installation
As more people choose sustainable energy, demand for individual solar systems has skyrocketed. As per a report, installed solar panel capacity has increased by 41%.
To support this growth, the budget for the PM Surya Ghar Muft Bijli Yojana has increased to INR 22,000 crore. Thus, more people will get better subsidies for their rooftop solar projects.
Agricultural Solar Projects Become More Affordable
Agriculture is the backbone of our economy. Therefore, to boost agricultural production and reduce farmers’ burden, the government has increased the PM KUSUM Yojana budget to NR 5,000 crore for 2026-27. This will increase the number of subsidies available for installing solar pumps and other solar solutions on farms.
Facilitating Solar Innovation
By reducing the import duties and ensuring a smooth supply chain, the government aims to support innovative research in the solar industry. It will attract investors as higher-performing solar panels are introduced to the market. Ultimately, it will strengthen India’s position in the global solar industry.
Attracting Global Investors
The lower cost of solar manufacturing and increasing demand for solar energy create a favourable environment for the investors. With strong demand, the solar industry is poised to grow further.
The Union Budget 2026-27 is strongly in favour of the solar industry, focusing on increasing domestic production to meet rising demand for solar panels. Sunora Solar continues to provide high-quality solar panels and inverters to contribute to India’s Net Zero goals. Stay tuned for more insightful posts on the Indian Solar Sector.
