India’s Renewable Energy Sector Urges Budget Focus on Power Infrastructure, Not Just Capacity Numbers

India’s renewable energy industry is calling for the Union Budget 2026 to prioritise strengthening infrastructure and fixing systemic bottlenecks rather than celebrating headline capacity additions. While the country added a record 44.5 GW of renewable power capacity in 2025 and pushed total non-fossil fuel capacity past 253 GW, industry representatives warn that transmission, storage and distribution challenges are undermining the reliability and effective utilisation of these assets.

Industry leaders say that the rapid growth in renewable capacity masks deeper issues in the power system, including weak grid connectivity, underfunded distribution companies (discoms) still carrying large historical losses, and delays in signing or executing power purchase agreements—factors that slow project commissioning and strain sector finances. They argue that unless the 2026 budget addresses foundational weaknesses in how clean power is integrated and delivered, ambitious targets like 500 GW of renewable capacity by 2030 may remain aspirational rather than achievable.

A key concern raised is the financial stress on discoms, which remain saddled with accumulated losses despite recent profitability in some states, and the ongoing reliance on subsidised power tariffs that distort true electricity costs. The renewable sector has highlighted that without clear measures to strengthen utilities’ balance sheets and ensure timely payments, developers face persistent cash-flow and financing risks.

Manufacturing independence is another priority. India imports more than 80 % of solar manufacturing components, and stakeholders are seeking expanded Production Linked Incentive (PLI) schemes that cover the full solar value chain, along with reduced customs duties and tax relief for equipment and battery components to bolster domestic capacity.

Energy storage and grid modernisation are seen as the “missing links” for a reliable renewable power system. The industry wants viability funding and policy treatment that recognises storage as essential infrastructure, expanded transmission investment, and digital grid systems that can manage variability and maintain stability.

In addition, renewable advocates urge budget support for emerging technologies such as green hydrogen—through incentives for electrolysers, demand creation mandates, and expanded funding—and greater emphasis on decentralised energy solutions like rooftop solar, which can reduce transmission losses and strengthen local energy resilience.

Experts maintain that the true test of Budget 2026 will be its ability to shift focus from capacity statistics to building the systems that make renewable power dependable, affordable and fully integrated into India’s electricity grid and economy.