Budget 2026: Green Energy May Get a New Boost

Vivek Shukla

India's Finance Minister Nirmala Sitharaman will present the Union Budget on 1 February 2026. This budget is very important for India's economy because the country is growing fast and protecting the environment is also necessary. Green energy, that is, clean and renewable energy like solar, wind, and hydrogen, is very important for India's future. Prime Minister Narendra Modi has set the target of achieving 500 gigawatts of non-fossil fuel capacity by 2030 and net-zero emissions by 2070. There are many expectations from this budget for the green energy sector, which will make the country stronger in the direction of clean energy.

First, the green energy sector hopes that the budget will support manufacturing. Special schemes may come to increase production of solar panels, wind turbines, and battery storage in India. Right now, India imports many of these items, which is expensive. Shailender Beboratha, an expert in India's green energy sector and head of Yamnaco Limited, said during a recent international conference in the capital that the budget may restart a 15% concessional income tax rate for new manufacturing companies. This will increase local production and create jobs. There will also be focus on technology and equipment development so that India becomes self-reliant. For example, factories making solar modules and cells may get subsidies or tax exemptions. This will make green energy cheaper and common people will adopt it more.

The second big expectation is related to storage technology. Solar and wind energy are not available day and night, so battery storage is very important. The budget is expected to give more funding for pumped hydro storage and battery systems. Everyone in the green energy sector wants the government to spend more on research and development, such as technology incubators and university-industry partnerships. This will develop new technologies and make energy storage cheaper. Also, investment may increase in high-capacity transmission lines and substations to strengthen the grid infrastructure. This is necessary because a large amount of renewable energy has to be added to the grid, otherwise electricity gets wasted.

Green hydrogen is also an important area where there are big expectations from the budget. Green hydrogen is made from clean water and renewable energy and can be used in transport, industry, and power sectors. Shailender Beboratha believes that India is running the Green Hydrogen Mission, but the budget needs more allocation to speed it up. The industry wants subsidies for production, storage, and transportation. There may also be tax incentives to boost exports. This can make India a major producer of green hydrogen in the world and earn foreign currency.

Promoting rooftop solar is also a big expectation. Installing solar panels on homes and buildings reduces electricity bills and saves the environment. The budget may bring more subsidies or easy loan schemes for rooftop solar. Small and medium industries may get tax breaks to adopt green energy. This will spread solar energy in rural areas too and benefit farmers, such as with solar pumps and irrigation systems.

The budget is expected to strengthen the clean energy ecosystem. This means focus on energy security, affordability, and sustainability. The government has been focusing on renewable energy in recent years, but now it should move beyond just adding capacity to focus on stability and performance. For this, grid reforms are needed, like smart grids and upgraded distribution systems. Also, clean energy funds can be increased, which will attract private investment.

Another important expectation is that the budget will promote green financing. Banks and financial institutions may get incentives to give cheap loans for green projects. Schemes like carbon tax or green bonds may come, which will help move away from fossil fuels. This will also increase foreign investment because green investment is a global trend.

The green energy sector hopes that the budget will give more emphasis to local manufacturing and clean fuels. For example, support for biofuel and electric vehicle industries. This will reduce pollution and strengthen the economy. Also, more budget for R&D will bring new innovations, like advanced solar cells or wind turbines.

With all these expectations, there will be fast growth in the green energy sector. But there are also challenges, like expensive equipment and grid connectivity. If the budget focuses on these, India can easily achieve its renewable energy targets. India will also become a leader in fighting climate change.

Budget 2026 can be a turning point for green energy. If the government invests in manufacturing, storage, hydrogen, and grid, the country will move quickly towards clean energy. This will create more jobs, strengthen the economy, and protect the environment. Now all eyes are on 1 February.