India’s renewable energy journey has achieved remarkable success in capacity addition, with clean energy now comprising over 40% of installed power capacity. However, Budget 2026 must address a fundamental challenge: generation capacity alone cannot deliver a complete energy transition.
Despite impressive capacity growth, grid-scale energy storage infrastructure remains critically inadequate for a high-renewables system. Without robust storage, grid flexibility, and firm green power supply, renewable energy cannot effectively displace fossil fuels at scale. This gap represents the most significant barrier to India’s decarbonization ambitions.
While India’s solar and wind tariffs rank among the most competitive globally, new challenges are emerging. Curtailment, grid congestion, and power variability are imposing hidden costs that undermine the economic advantages of renewable energy. Strategic budgetary support for battery energy storage systems (BESS), pumped hydro storage, and green hydrogen infrastructure can transform intermittent renewable power into dispatchable, industrial-grade energy—making clean power a reliable baseload alternative.
India currently imports a substantial proportion of critical components—electrolyzers, battery cells, and power electronics—that will form the backbone of future energy infrastructure. Targeted production-linked incentives and sustained policy certainty can catalyse domestic manufacturing ecosystems, reduce foreign exchange vulnerabilities, and generate high-skilled employment opportunities across the value chain.
From the perspective of engineering, procurement, and construction (EPC) firms and independent power producers (IPPs), three factors will determine execution velocity:
- Expedited clearances to reduce project gestation periods
- Predictable transmission planning aligned with renewable energy deployment roadmaps
- Access to patient, long-tenor capital that matches infrastructure investment timelines
The global energy transition demands substantial capital deployment, but it also creates unprecedented value. A budget that integrates power generation, energy storage, industrial decarbonization, and export competitiveness will achieve dual objectives: meeting India’s climate commitments while establishing the nation as a trusted global supplier of clean electrons and green molecules.
