Beyond Gigawatts: Why Budget 2026 Must Fix What Its Predecessor Left Unfinished

Though significant progress has been made in renewable energy, delivering scale and continuity while positioning it as a core area for the centre’s economic and climate strategy, several gaps remain, which need to be plugged to take the next steps.

Industry leaders say the forthcoming budget must move decisively from capacity addition to system-wide readiness, if India is to sustain its rapid momentum toward its 2030 targets.

Issues related to grid readiness continue to lag generation capacity. Transmission planning, last-mile connectivity, and state-level coordination still pose challenges, leading to delays and curtailment risks.

At a time when India’s clean energy ambitions are expanding, the 2025 budget helped reinforce the existing framework rather than reinvent it, which resulted in a huge boost to capacity and domestic manufacturing.

However, some bottlenecks are now shaping the expectations of industry players ahead of the Union Budget 2026.

Achievements Of Budget 2025

According to the Ministry of New and Renewable Energy, India has added around 35 gigawatts (GW) of solar capacity by November 2025, taking the total installed solar capacity to 132.85 GW, a 41% year-on-year increase. 

PM Surya Ghar: Muft Bijli Yojana (PMSG: MBY), the flagship programme launched by the Union government, has stood out, with nearly 14.43 lakh RTS systems installed across the country, benefiting more than 18.14 lakh households under this scheme. 

Meanwhile, India also achieved a milestone of 100 GW of solar PV module-manufacturing capacity under the Approved List of Models and Manufacturers (ALMM) for Solar PV Modules. The scheme started in 2021 with an initial capacity of 8.2 GW, and it has now touched 100 GW, paving the way for 500 GW capacity by 2030.

By 2025, India had surpassed 250 GW of renewable energy (RE) capacity, much ahead of meeting its 2030 non-fossil targets. 

According to CA Baratam Satyanarayana, CFO & Director, Bondada Group, the 2025 renewable energy budget has helped sustain growth momentum in the sector. 

“The emphasis on enabling infrastructure, improved policy signalling, and focus on accelerating renewable deployment have supported capital flows into the sector and encouraged companies like ours to plan for scale in a more structured manner,” Satyanarayana said.

Where Budget 2025 Fell Short

India witnessed a strong intent and capacity growth. However, the 2025 budget experienced some structural gaps.

Manish Dabkara, Chairman and Managing Director, EKI Energy Services, and president, Carbon Markets Association of India, said that the budget’s major limitation was that it addressed ambition more clearly than execution.

“While renewable capacity expansion remained a priority, financing mechanisms did not evolve fast enough to reflect today’s capital needs and risk realities. Access to long-tenure, low-cost finance, especially for newer technologies, remains constrained,” he said. 

Speaking to The Secretariat, Piyush Goyal, Co-Founder & CEO, Volks Energie, said, “Multiple regulatory reports indicate that over 30GW of renewable connectivity is yet to be fully utilised, primarily due to delays in the power purchase agreements (PPAs). This creates ecosystem instability and undermines project viability.”

He further said that despite approval of 30 Gigawatt-hours (GWh) of BESS capacity and ₹5,400 crore in Viability Gap Funding support, scale and clarity remained limited, with the lack of long-term tender visibility making it difficult for developers and EPC players to make investment decisions.

Vasudha Madhavan, Co-Founder & CEO, Ostara Advisors said while the 2025 budget made important strides, it fell short in addressing structural bottlenecks that could constrain long-term renewable growth, particularly in financing and grid readiness.

"Despite increased allocations, challenges persist around long-term, low-cost financing and investor confidence—especially given the high cost of capital for renewable projects and the weak financial health of many DISCOMs, which limits power purchase agreements and delays payments to developers, increasing project risk," she added.

In short, the budget reinforced direction but stopped short of addressing the deeper systemic frictions that slow deployment. Growth is not constrained by intent, but by the absence of integrated solutions across finance, grids, storage, and policy consistency.

Expectations From Budget 2026

As the sector looks ahead, expectations from Budget 2026 are clear and largely aligned across stakeholders: less emphasis on announcing new schemes and more focus on strengthening the connective tissue of the energy transition.

Ankit Patel, Founder, Hypotenuse Energy, suggests that the budget 2026 should also introduce innovative policy measures to discourage excessive import dependence, prevent market monopolies, and standardise component pricing. 

“Stronger green financing instruments, including green infrastructure bonds, concessional debt through IREDA and multilateral partners, and blended finance mechanisms, would improve access to affordable capital, particularly for mid-sized EPC players,” he said. 

Measures of the 2025 budget, such as the reduction of GST from 12% to 5% on key solar devices and components, have clearly demonstrated how targeted tax rationalisation can improve affordability, accelerate adoption, and strengthen domestic demand. "I wish to see similar fiscal incentives extend across adjacent clean-energy technologies in this budget," he added. 

“Our expectation is a stronger focus on execution enablers rather than only capacity targets. Priority should be given to creating robust financing mechanisms, encouraging blended finance models, and supporting storage deployment at scale,” Satyanarayana said. 

“Accelerated investments in transmission and grid resilience, coupled with policy predictability and clarity on implementation timelines, will be essential,” he added. 

From Capacity To Quality

Budget 2025 gave India continuity, scalability, and capacity milestones, but the country is now entering a new era of its clean energy journey. So, the next episode should be less about the capacity numbers and more about quality, integration, and resilience.

Budget 2026 now has the opportunity to convert that momentum into a more reliable and integrated clean energy system.