What Budget 2026 Could Change for Middle-Class India’s Power Bills, EVs & Rooftop Solar

On a weekday morning in an apartment complex in Noida, the lift runs on backup power for a few minutes during a brief outage. 

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Upstairs, a family’s rooftop solar panels feed electricity into their home, while an electric scooter charges in the parking lot below. 

A few years ago, this combination would have felt aspirational, even elite. Today, it is slowly becoming normal.

India’s clean energy shift is no longer confined to distant solar parks or policy speeches. With the Union Budget 2026, that shift will likely inch closer to middle-class homes, affecting how much families pay for power, fuel, and mobility.

India’s clean energy story so far

India has rapidly expanded its clean energy base over the past decade. As of 2025, the country’s installed renewable energy capacity has more than doubled to around 266.8 GW, up from roughly 120 GW in 2015.

Solar energy now accounts for over half of this capacity, with the rest coming from wind, hydro, and other non-fossil sources.

This scale places India among the world’s top renewable energy producers. But capacity alone does not guarantee affordability or access at the household level.

EVs and solar are rising, but affordability still lags

Electric vehicles are no longer unusual on Indian roads. India recorded over two million EV sales in 2024, with two-wheelers forming the largest share. This growth reflects rising comfort with EVs, especially among urban commuters drawn to lower running costs.

However, adoption has not been even. While charging an EV is far cheaper than filling up a petrol tank, the upfront cost of buying an electric vehicle still feels high for many middle-income families juggling EMIs, school fees, and rent.

A similar gap exists with clean energy at home. Many urban households still face high upfront costs for rooftop solar, along with limited access to easy financing. 

Clean energy is growing fast nationally, but at the household level, affordability remains the deciding factor.

This is where the Union Budget 2026 steps in, aiming to narrow the gap not through dramatic new subsidies, but by reducing the cost of making clean technologies in India, so prices can ease over time for consumers.

How the Budget makes solar and EVs cheaper

One of the most important clean energy moves in Budget 2026 is the reduction or removal of customs duties on key clean energy inputs. 

Simply put, this means essential parts used to make solar panels, batteries, and electric vehicles can now be imported at lower tax rates.

Lower import duties reduce production costs for Indian manufacturers, which can eventually translate into lower prices for buyers.

In the case of electric vehicles, key inputs such as battery cells, electric motors, power electronics, and specialised magnets make up a large share of overall costs. For solar power, the focus is on materials and machinery needed to manufacture panels domestically.

At the household level, rooftop solar remains the easiest entry point into clean energy for many middle-class families, even though the upfront cost has long been the biggest concern.

Residential rooftop solar systems in India typically cost between Rs 40,000 and Rs 70,000 per KW before subsidy, depending on location and equipment quality.

Lower customs duties on solar manufacturing inputs and equipment help domestic manufacturers cut costs. Over time, this can stabilise prices and reduce dependence on imported components.

EVs and batteries: where the real costs lie

For many families, the purchase price of an electric vehicle still feels higher than that of a comparable petrol model. The biggest reason for this is the battery, which accounts for 30–40 per cent of an EV’s cost, according to NITI Aayog.

The Budget lowers duties on lithium-ion and sodium-ion battery inputs, supporting domestic battery manufacturing. 

Lithium-ion batteries power most EVs today, while sodium-ion batteries are emerging as a potentially cheaper alternative for the future.

In addition, the government has allocated Rs 2,000 crore in Viability Gap Funding (VGF) for Battery Energy Storage Systems. 

VGF helps bridge the gap between the cost of building storage projects and what they can realistically earn, encouraging private investment.

Industry analysts expect that, partly due to these measures, battery prices could fall, making electric two-wheelers far more competitive with petrol vehicles. 

Stronger grids, steadier power, fewer surprises

Clean energy only works if electricity reaches homes reliably. Budget 2026 increases support for grid expansion, which involves upgrading transmission lines and substations so renewable power can move smoothly from generation sites to cities.

The proposed Infrastructure Risk Guarantee Fund is designed to reduce financial risk for large projects such as grids, storage systems, and renewable plants. Lower risk encourages lenders to offer cheaper financing, which ultimately helps keep electricity tariffs stable.

For households, this means fewer outages, steadier voltage, and better support for EV charging and home solar systems.

Why this matters beyond climate goals

India continues to import a large share of its crude oil, exposing households to global fuel price swings. Clean energy offers a way to reduce that vulnerability. 

Every rooftop solar system installed and every kilometre driven on electric power reduces dependence on imported fuel and volatile prices.

By focusing on manufacturing costs, financing, storage, and grid strength, Budget 2026 nudges clean energy closer to everyday life. 

It does not promise instant transformation, but it lays the groundwork for a future where solar panels on rooftops and EVs in parking lots become affordable and accessible choices for the middle class. 

Sources

‘Union Budget’s clean energy push and resilient economy’: by Sumant Sinha for The Hindu, Published on 2 February 2026

‘Residential Solar Payback Period: From 8 Years to Just 3–5 Years in 2024’: by TrueImpact Digital for Synergy Solar, Published on 18 October 2024.

‘Complete 2025 Guide to 3 kW Solar System Price, Subsidy & Savings’: by APN Solar

‘Physical Progress — Renewable Energy’: by Ministry of New and Renewable Energy, Government of India, Published on 31 December, 2025

‘Ignition of change in electric vehicle battery ecosystem in India’: by Shine Jacob and Sohini Das for Business Standard, Published on 14 June 2023

‘Unlocking a $200 Billion Opportunity: Electric Vehicles in India’: by NITI Aayog, for the Government of India, Published August 2025.