Ahead of the presentation of the Union Budget 2026–27 on Feb. 1, stakeholders across India’s solar and energy storage ecosystem have urged the government to focus on targeted tax reforms, expansion of production-linked incentive (PLI) schemes with targeted allocations, faster viability gap funding (VGF) disbursements, additional funding for residential rooftop solar, improved access to long-term and affordable green finance, and a stronger push for circular economy initiatives and grid modernisation.
Here’s what the industry stakeholders said:
Ashwin Jacob, Energy, Resources & Industrial Leader, and partners Jimit Devani and Sanjay Shah at Deloitte India:
“Introduce group tax consolidation regime for the renewable energy sector—a tax framework that allows a group of companies (wholly owned or majority-owned subsidiaries, including Trusts and collaborations) to be treated as a single entity for income tax purposes. This would include consolidated tax filing, intra-group loss offsetting and exclusion of intra-group transactions for tax computation. This will reduce the group’s Effective Tax Rate (ETR), eliminate double taxation and plug tax leakages, improve utilisation of tax attributes and significantly reduce compliance and administrative costs for both taxpayers and the tax department,” said Deloitte India partners.
“Current tax structures for renewable energy projects, often implemented through multiple Special Purpose Vehicles (SPVs) under a parent entity, result in significant tax inefficiencies and increased compliance burden. Introducing a group tax consolidation regime would streamline tax administration, enhance cash flow management and optimise resource utilisation across group entities. This reform would also align India’s tax framework with OECD’s best practices, promote ease of doing business and contribute to greater economic efficiency.”
Further, “Extend the benefit of Section 35AD to battery energy storage system (BESS) projects, allowing full deduction of capital expenditure incurred in setting up and operating such systems. Section 79 should be amended to protect the carry-forward of losses for companies undertaking specified businesses under Section 35AD. This protection should apply in cases of intra-group shareholding changes, transfers to Infrastructure Investment Trusts (InvITs) or strategic transfers for refinancing, ensuring continuity of tax benefits and encouraging reinvestment in similar infrastructure projects.
“The GST rate on lithium-ion batteries used in BESS projects in India has been standardised at 18% under GST 2.0, aligning all advanced battery chemistries under HSN 8507 to promote innovation and simplify compliance. While this helps reduce cost disparities for BESS deployments, a further reduction of grid-scale BESS to 5% is also required for the overall viability of the project.
“This will enhance the financial viability of BESS projects, reduce tax uncertainty and encourage long-term investment in energy storage infrastructure. The GST rationalisation will lower overall project costs and improve financial viability for renewable energy developers. It will also reduce working capital blockage due to lower input tax credit accumulation, simplify compliance and encourage faster deployment of clean energy infrastructure across the country.”
Akanksha Tyagi, Programme Lead, Council on Energy, Environment and Water (CEEW):
“The rising material demand amid geopolitical challenges makes a Circular Economy a strategic imperative for our national security and sustained economic growth. CEEW research finds that circularity in seven sectors alone offers an INR 11.5 lakh crore ($132.2 billion) worth of annual market by 2047, will help create 8.4 million full-time equivalent (FTE) jobs and attract INR 10.8 lakh crore ($124.8 billion) in investments. The budget should announce a National Mission on Circular Economy to drive concerted efforts into the sector and realise this opportunity.”
Bhawna Tyag, Programme Lead, Council on Energy, Environment and Water (CEEW):
“As we approach Union Budget 2026-27—a milestone coinciding with the second anniversary of the PM Surya Ghar Muft Bijli Yojana—we have a defining opportunity to transition from solar awareness to seamless, large-scale execution. While the scheme has already achieved nearly 27% of its 10-million-household target, this progress is just the tip of the iceberg. According to CEEW, India has a realistic residential rooftop potential of 118 GW, accounting for current consumption levels. To bridge the gap and tap into immense potential, the upcoming Budget must prioritise additional fund allocations alongside a strategic focus on grid modernisation and deeper digital integration between state DISCOMs and the National Portal, combined with a decisive plan to resolve Domestic Content Requirement (DCR) supply chain bottlenecks. This will help in truly democratising clean energy for every Indian rooftop.”
Debmalya Sen, President, India Energy Storage Alliance (IESA):
“As India stands at the cusp of a transformative e-mobility and clean energy revolution, we urge the government to deliver a visionary Union Budget 2026 that accelerates our progress towards Net Zero 2070 and Atmanirbhar Bharat. We urge the government to prioritize budgetary allocations for building a robust and sustainable battery supply chain that anchors advanced manufacturing within India. We recommend dedicated funding, such as a INR 1,000 crore Battery Pack Manufacturing and System Integration Support Scheme and up to 50% fiscal support for critical mineral refining, to localize battery production and reduce import dependence.
“To future-proof our sector, we seek a INR 300 crore allocation for National BESS Testing and Safety Centers, INR 200 crore for pack-level testing, and expanded R&D funding targeting next-generation chemistries beyond lithium-ion, including sodium-ion and solid-state batteries. We strongly advocate for GST reduction from 18% to 5% on key components, batteries, motors, controllers, and battery scrap, as well as lower customs duties on cell-active materials and recycling equipment to boost affordability and enable greater participation across the supply chain. The reinstatement of income tax deductions on EV loans and 100% accelerated depreciation for electric trucks will further catalyze adoption. These targeted budgetary measures, supported by streamlined tax policies and inclusive incentives for MSMEs and start-ups, will empower India to lead in global battery innovation, manufacturing, and sustainable mobility.”
Sameer Gupta, Chairman, Jakson Group:
“India’s clean energy transition is entering a phase where execution, manufacturing depth, and system resilience will increasingly determine outcomes. As the country moves closer to its target of 500 GW of non-fossil fuel capacity, the Union Budget has an opportunity to reinforce this next phase by strengthening policy certainty and long-term visibility for investors and industry.
“Manufacturing will be a central pillar of this transition. We see merit in a continued expansion of the Production-Linked Incentive framework to support large-scale manufacturing across India’s solar value chain, particularly in upstream segments such as ingots and wafers. Deeper integration across balance-of-system components, energy storage, and hybrid and distributed solutions will further strengthen domestic capability and reduce import dependence.
“At the same time, sustained investment in modernising transmission and distribution infrastructure, including interstate corridors, smart grids, digital forecasting, and storage-linked evacuation, will be essential to support higher renewable capacity and ensure reliable grid operations.
“Improved access to long-term, affordable green finance, including tax-efficient Green Bonds, alongside targeted support for green hydrogen and green ammonia, can accelerate adoption across sectors. Together, these measures can help ensure that the Made in India label becomes synonymous with efficient, reliable, and globally competitive clean energy solutions.”
Laxit Awla, CEO of SAEL Industries Ltd:
“The 2026 Union Budget is an opportunity to accelerate India’s rapid RE growth through targeted fiscal incentives by expanding PLI schemes, viability gap funding, tax holidays, and accelerated depreciation for solar, biomass, and hybrid power projects to drive cost-competitive scaling. Equally critical are substantial investments in infrastructure for modernizing transmission networks, fast-tracking green energy corridors, and deploying grid-scale battery storage via predictable, long-term procurement frameworks that treat it as a foundational system asset rather than an adjunct, ensuring evacuation infrastructure keeps pace with generation to minimize congestion and maximize capacity utilization.
“Green financing mechanisms must be prioritized, including sovereign green bonds, ESG-linked loans, credit guarantees, and blended finance to unlock private capital for RE expansion coupled with high expectations for carbon markets becoming operational in 2026, driving decarbonization investments. Sustained emphasis on domestic manufacturing of critical equipment remains essential to mitigate supply-chain vulnerabilities amid geo-economic volatility.
“Above all, policy stability through long-term contracts, storage-linked tenders, and firm commitments to the 500 GW non-fossil target by 2030 will ensure sustained execution. A focus on reliability, resilience, and system integration will transform renewable growth into stable, dependable power for India’s economy.”
Shyam Sunder Jindal, Promoter, BC Jindal Group:
“As clean power generation gathers significant pace, installing energy storage solutions will become crucial in shaping the sector’s next phase of growth. In the upcoming Budget 2026, favourable regulations and policies that enable the seamless deployment of large-scale battery storage infrastructure and solutions alongside renewable projects are expected to guide the industry’s expansion. We are observing the commissioning of large-scale initiatives that focus on deploying solar rooftop infrastructure, and, therefore, interventions that support project financing and address supply-chain bottlenecks will aid growth at scale. Further, strengthening the policy framework to enhance skilled employment generation will have a positive impact on the industry’s competitive advantage in the long-term, contributing meaningfully to India’s transition to clean energy.”
CA Baratam Satyanarayana, CFO and Director, Bondada Group:
“As India prepares for Budget 2026, the infrastructure and clean-energy ecosystem is at an inflection point. For EPC players operating across telecom, renewable energy, and emerging storage solutions, the focus now must shift from capacity creation to execution certainty. We are looking for a budget that strengthens grid infrastructure, accelerates utility-scale renewable deployment, and provides clear policy support for battery energy storage systems, which are critical to balancing intermittent power and improving project bankability.”
Srivatsan Iyer, Global CEO, Hero Future Energies:
“The government has laid a strong foundation for India’s renewable energy sector through consistent policy support and sustained capacity addition. To further strengthen the sector, the upcoming Union Budget must announce additional measures aligned with India’s climate commitments and global competitiveness. Priority should be given to incentivizing investments in green hydrogen, grid-scale energy storage, modernization of transmission infrastructure, and introducing targeted PLIs or tax incentives to enhance energy security and build alternative material ecosystems. Together, these steps can reduce risk, improve grid reliability, and enable renewables to scale in a more efficient and commercially sustainable manner.”
Shashank Sharma, Founder, Chairman & CEO, Sunsure Energy:
“The current VGF disbursement framework for BESS spreads payments over three years. We believe the disbursement window should be compressed into a single year, with the entire VGF released within six months of COD, once the project has successfully met all technical performance tests specified in the tender conditions.
“Specifically, we propose that 90% of the VGF—beyond the 10% released at financial closure—should be disbursed at COD itself, supported by a three-year bank guarantee, instead of the current staggered payout structure. This would materially improve project cash flows without diluting performance safeguards.
“In addition, VGF support for standalone BESS should also be extended to existing utility scale solar projects, where storage can immediately improve power scheduling, enhance grid stability and system value by preventing curtailments.
“Another critical issue is the need to rationalise the taxation and duty structure for BESS and its components. Battery energy storage systems (BESS) should be carved out as a distinct category with a preferential Basic Customs Duty and cess framework, and GST should be aligned at 5%, in line with solar. These changes are essential to unlock scale, improve project economics, and enable storage deployment at the speed the power system now requires.
“In the subject of power transmission, the government should also allocate dedicated budgetary support to strengthen intra-state transmission networks for renewable energy integration. With renewable capacity growing rapidly, transmission congestion within states has emerged as a key bottleneck. We propose that the government initiate the third phase of the Green Energy Corridor (GEC-3), enabling targeted central assistance to state governments for upgrading and expanding intra-state transmission infrastructure. This will be critical to ensure timely evacuation of renewable power, reduce curtailment, and support India’s clean energy transition. Importantly, it will also boost renewable energy development at the state level, enabling more uniform and balanced growth across the country.”
Kushagra Nandan, Co-Founder, LNK Energy:
“While existing policies have successfully driven capacity expansion and catalysed domestic manufacturing, sustained investor confidence is built on policy stability and assured payment mechanisms. Hence, the Government should continue with the schemes that drive investments in manufacturing and provide payments security for the RE generators. Also, as the generation continues to scale, greater emphasis must be placed on sprucing up grid infrastructure and enabling long-duration storage solutions. Without these systemic enablers, the ability to absorb higher volumes of renewable energy could become a limiting factor.”
Radhika Choudary, Co-founder & Director, Freyr Energy:
“We hope to see continued policy support for rooftop solar through stable incentives, simplified GST structures, and enhanced financing mechanisms that make solar more accessible for households and MSMEs.
“Strengthening the PM Surya Ghar Muft Bijli Yojana with faster subsidy disbursements and broader awareness initiatives will be key to driving last-mile adoption. Additionally, budgetary support for domestic manufacturing, innovation-led technologies, and digital platforms can significantly improve system quality, performance monitoring, and long-term reliability.
“From an industry perspective, easier access to low-interest green financing, especially for residential and rural consumers, will be a game-changer. The focus should also extend to skilling, grid modernization, and storage solutions to support the next phase of renewable growth.”
Vinay Thadani, Director and CEO, GREW Solar:
“As India enters a phase of large-scale renewable deployment, Budget 2026 needs to move beyond a sole focus on capacity addition and pay closer attention to the ecosystem that supports sustained growth. While Budget 2025 increased allocations to the renewable sector through higher MNRE funding, initiatives such as PM Surya Ghar and PM-KUSUM, and continued support for green energy corridors and distribution reforms, some gaps remain. Access to long-term, affordable financing for manufacturing and project development is still limited, particularly for emerging players. In addition, more stable and predictable policy frameworks around tariffs, incentives and project contracts would help improve investor confidence.”
Prashant Mathur, CEO, Saatvik Green Energy Ltd:
“The Indian solar industry is at the threshold of a quantum leap from 135 GW capacity in 2025 to over 300 GW by 2030, making it the single largest contributor to India’s ambitious 500 GW non-fossil fuel energy target. We strongly advocate for an enhanced PLI scheme specifically for polysilicon, ingot, and wafer manufacturing. This targeted approach will enable India to rapidly establish critical upstream capabilities and reduce our heavy dependence on imports, particularly from China which controls over 80% of global solar manufacturing.
“Beyond PLI, we urge the government to introduce accelerated depreciation benefits for solar manufacturing equipment, similar to those provided for solar projects, which will significantly improve capital efficiency and returns. Additionally, reduced corporate tax rates for solar manufacturers and preferential lending rates through priority sector lending would enhance competitiveness and attract greater investments. These comprehensive policy measures will be instrumental in building a self-reliant, globally competitive solar manufacturing ecosystem that truly embodies Atmanirbhar Bharat.”
Gyanesh Chaudhary, Chairman and Managing Director, Vikram Solar:
“Budget 2026 must take an integrated approach—strengthening Energy Storage Obligations through fiscal incentives, extending PLI coverage to future-ready technologies and critical minerals, and supporting digital energy platforms to manage demand efficiently, ease grid stress, and unlock new value streams for both producers and consumers. Further, it is critical to invest in skill development for the clean energy ecosystem, including enhanced funding for solar manufacturing skill programmes and the integration of specialised solar curricula across technical institutes and ITIs, to ensure workforce readiness keeps pace with rapid capacity expansion.
“Equally important is the rationalisation of SEZ–DTA norms, specifically removing customs duty on value addition. It is long overdue and essential to restore competitiveness, support manufacturers navigating global trade disruptions, and ensure India’s clean energy manufacturing ambitions remain export-oriented and resilient.”
Amod Anand, Co-Founder and Director, Loom Solar
“The expectations are centred on closing structural gaps in the entire end-to-end solar and green energy value chain. Solar manufacturers are looking for targeted support for upstream integration—including incentives for polysilicon, ingots, and wafers—along with rationalisation of duties on critical raw materials and resolution of the GST inverted duty structure to ease working-capital pressure. There is also a strong expectation for low-cost green finance, R&D incentives for advanced cell technologies, and stronger policy support for C&I solar, storage, and grid infrastructure to ensure demand stability and minimise curtailment risks. Together, these measures would align near-term industry sustainability with India’s long-term clean energy and manufacturing goals.”
Rajesh Kaushal, Energy Infrastructure & Industrial Solutions (EIS) Business Group Head, India & SAARC, Delta Electronics India:
“As renewable penetration rises, reliable power delivery will increasingly depend on battery energy storage, advanced power electronics, and grid-ready conversion technologies that can stabilize the network and manage variability in real time. In the upcoming Union Budget, we look forward to policy frameworks that recognize energy storage and power electronics as essential grid assets, support deep localization of manufacturing, and provide long-term policy visibility for investors. These enablers are critical if India is to move from adding capacity to building true energy capability for a secure, future-ready power ecosystem.”
Ayush Misra, Co-Founder & CEO, AmpereHour Energy:
“With BESS and advanced EMS emerging as the backbone of a flexible power grid, targeted incentives to reduce upfront capital costs will be critical to accelerating energy storage deployment and enabling this transition.
“We are optimistic about stronger support for both BESS developers and domestic energy storage manufacturers. Continued viability gap funding is essential to scale projects during this early phase, while a clear, phased roadmap on manufacturing incentives and import duties for battery packs and containers will build investor confidence, ensure competitiveness of local manufacturing, and unlock private capex into domestic facilities.
“With the battery supply chain heavily concentrated in China and prices already rising, BESS projects face near-term volatility. Over the long term, India must prioritise battery manufacturing self-sufficiency through clear duty structures and sustained manufacturing incentives to ensure energy security.
“New-age sectors like BESS and electric vehicles require sustained R&D investment, yet current corporate spending is insufficient. Government-led tax incentives and R&D grants can accelerate innovation and strengthen academia–industry collaboration.”
Nitin Gupta, Co-Founder & CEO, Attero:
“As India approaches the Union Budget 2026, there is a strong opportunity to firmly position critical minerals, recycling and rare earth elements as strategic enablers of long-term economic and industrial self-reliance. Recycling today is not only about sustainability, it is about material security. India continues to rely heavily on imports for lithium, cobalt, nickel and rare earths that power electric mobility, clean energy, electronics and defence. Building native recycling, refining and recovery capabilities are some practical ways to reduce this dependence and create resilient, domestic supply chains. E-waste, end-of-life batteries and industrial scrap represent a strategic resource base that can be unlocked at scale through technology.
“Budget 2026 can accelerate this transition by recognising recycling and advanced materials recovery as core industrial infrastructure, enabling easier access to long-term capital and encouraging Indian deep-tech innovation in automation, robotics and process engineering. Targeted fiscal incentives for advanced recycling technologies, rare earth processing and downstream manufacturing will help Indian startups and scale-ups compete globally. With the government’s growing mission-level focus on critical minerals, this budget has the potential to convert intent into impact, strengthening Atmanirbhar Bharat and advancing a truly circular economy.”
Shubham Vishvakarma, Founder and Chief of Process Engineering at Metastable Materials:
“Budget 2026 can strengthen India’s battery recycling sector by addressing a few gaps. It can better reflect the different roles across the recycling chain, where collection and dismantling are essential, but deeper, end-to-end recycling delivers the final material value. EPR already drives compliance; the opportunity is to more clearly recognise higher-quality recycling outcomes within that framework. E.g. it can incentivise producers to fulfil EPR through audited R3/R4 recyclers by recognising greater recycling outcomes. Additionally, while recyclers make refined secondary metals and metal salts, the budget can support the development of a downstream industry that converts these secondary materials into battery precursors or CAM for domestic use. Together, these steps can turn recycling from a compliance activity into a dependable source of critical minerals for India’s battery ecosystem.”
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