Karnataka budget 2026-27 allocates funds for BESS, solar and power subsidies

The Government of Karnataka has presented the state budget for 2026-27, outlining measures focused on power sector infrastructure, renewable energy expansion, and continued electricity subsidy support for farmers and households.

Over the past three years, the state has allocated Rs 48,000 crore under the free electricity subsidy scheme, covering 36 lakh irrigation pump sets and benefiting around 21 lakh farmers. For 2026-27, the government has earmarked Rs 19,290 crore to continue the programme.

Under the Gruha Jyothi scheme, 1.74 crore consumers have registered so far. The state has spent Rs 28,000 crore on the scheme over the past three years. An allocation of Rs 10,578 crore has been proposed for the scheme in the 2026-27 financial year.

In the energy storage segment, the state plans to expand battery storage capacity following the implementation of a 1,000 MWh battery energy storage system (BESS) across seven substations during 2025-26. The government now plans to add another 2,000 MWh of BESS capacity at an estimated cost of Rs 3,400 crore. The proposed installations will be located at the Huliyur, Pavagada, and Kushtagi substations to support grid stability and manage peak demand.

The budget also introduces a new solar programme titled Mukhya Mantri Saura Krishi Yojane, designed along the KUSUM-C model. Under this initiative, solar power plants with a combined capacity of 3,000 MW will be developed at sub-centres of Karnataka Power Transmission Corporation Limited (KPTCL) under the Renewable Energy Service Company (RESCO) model, with an estimated investment of Rs 10,500 crore.

Separately, the state has initiated decentralised feeder solarisation of irrigation pump sets under the KUSUM-C scheme. Projects with a total capacity of 2,777 MW are scheduled for implementation during the current year.

To strengthen the transmission network, KPTCL established 100 new substations during 2025-26. The 2026-27 budget proposes setting up another 100 substations to support the state’s growing power demand.

The government also plans to expand electric vehicle charging infrastructure. A total of 1,250 public EV charging stations will be installed with assistance from electricity supply companies (ESCOMs) under the PM-E Drive scheme. The initiative is estimated to cost Rs 777 crore.

In addition, the state plans to establish an incubation centre for renewable energy startups at an estimated cost of Rs 20 crore. The centre will be developed in collaboration with the Indian Institute of Management Bangalore (IIM Bangalore), the University of New South Wales, Australia, and the Indian Institute of Science Bangalore (IISc Bangalore).

The featured photograph is for representation only.