New Delhi : A latest parliamentary report has shed light on the underutilization of funds allocated for various schemes, highlighting a significant gap between the demand of Rs. 45,806.61 crore raised by the Ministry of New and Renewable Energy (MNRE) and the Rs. 32,914.67 crore allocated by the Finance Ministry for carrying out various activities during 2026-27.
Another important aspect highlighted in the parliamentary report is the changing trend in funding for the PM-KUSUM scheme and the commissioning of solar projects using funds allocated under the grid-connected solar power budget.
Under the Solar Park Scheme, around 7 GW of solar power projects are expected to be commissioned in FY 2026-27. The fund requirement for these projects will be met through the budgetary allocation under the budget head for grid-connected solar power.
No Budget Allocated for PLI Scheme
The report also highlighted an interesting finding regarding the Production Linked Incentive (PLI) Scheme for High Efficiency Solar PV Modules. The scheme has not set year-wise physical targets. Since the disbursement of incentives is scheduled to begin one year after commissioning, no funds have been allocated or disbursed under the scheme so far.
The report noted there is no budgetary allocation for the PLI Scheme for High Efficiency Solar PV Modules in FY 2026-27 at present, as no fund requirement is expected during the first half of FY 2026-27. The budget allocation for the PLI Scheme for High Efficiency Solar PV Modules for 2026-27 will be considered at the Revised Estimates (RE) stage, depending on the progress of projects under the scheme and the resulting estimate of fund requirements during the second half of FY 2026-27.
Wind Taking a Hybrid Partner
According to the Ministry, wind power projects are being set up by private developers based on the techno-economic viability of individual projects. The government is not providing any direct central financial assistance for installing new wind power projects.
When asked to furnish details of the major activities and projects proposed to be undertaken during 2026-27, the ministry noted, “The major activities/projects proposed to be undertaken during 2026-27 includes issuance of bids for wind-solar hybrid power, firm and dispatchable renewable energy in which generally wind power is a component, and vanilla wind power projects, tendering of offshore wind energy capacity off the coast of Tamil Nadu supported by a Viability Gap Funding (VGF) scheme.”
The funds allocated for the wind energy programme are being utilized to meet liabilities under the Wind Generation Based Incentive (GBI) scheme, which remained operational until March 2017. Consequently, there are no annual physical targets for wind capacity addition linked to the scheme, nor is there a corresponding budgetary allocation. Currently, there is no Scheme for Onshore wind power. The committee viewed collaboration with global Offshore wind developers to enable the Ministry to understand the opportunities and challenges of the offshore wind market.
Delays Under the Different Components of GEC
The report noted that the Green Energy Corridor (GEC) scheme received a budgetary allocation of around Rs. 600 crore for 2026-27. However, the scheme has faced significant delays in implementation.
The Intra-State Transmission System (InSTS) GEC-I scheme has been a primary reason for the delay, with several factors contributing to the slow progress. These include Right of Way (RoW) issues, delays in issuing tenders due to delays in substation land acquisition, delays in awarding works because of low bidder participation in various projects, repeated re-tendering, court cases, forest clearances, and Great Indian Bustard (GIB)-related clearances, among others.
The report further mentioned, “The Intra-State Transmission System (InSTS) GEC-II scheme has been delayed due to various reasons such as non-participation during tendering process, re-tendering, limited bidder participation, cancellation of tenders, regulatory issues etc.”
Off-Grid Solar Power: No Operational Programme/Scheme Since April 2021
In the report, MNRE noted that the government has not had an operational programme or scheme for off-grid solar power since April 2021. However, MNRE issued a sanction on August 3, 2022, to solarize 115 Forward Defense Locations (FDLs) through off-grid solar plants with battery backup at the Jammu & Kashmir Frontier of the Border Security Force (BSF). The project has a capacity of 1.212 MWp and Central Financial Assistance (CFA) of Rs. 16.73 crore.
For disbursement of pending funds in the financial year 2026-27, a provision clears upcoming pending liabilities. The committee said that, in a letter sent to the Department of Expenditure (DoE) on January 28, 2026, it sought approximately Rs. 37.84 crore in funds for the financial year 2026-27 to clear pending liabilities under the scheme.
Under the scheme, off-grid systems, including Solar Home Lighting Systems and Solar Mini Grids, are provided to tribal and Particularly Vulnerable Tribal Group (PVTG) households, multi-purpose centres, and public institutions in Tribal and PVTG areas where grid-connected electrification is not techno-economically feasible. Currently, the Budget Estimate (BE) under DA JGUA for FY 2026-27 is Rs. 35 crore.
Underutilization of Funds and Non-Achievement of Target: Theme for PM Surya Ghar
The committee report found that funds allocated under the PM Surya Ghar scheme were underutilized and that the target was not achieved within the stipulated timeframe, with challenges arising from coordination issues with DISCOMs.
The committee found that the initial phase of implementation faced several challenges involving DISCOMs, including delays in inspections and commissioning, mandatory physical visits for load or name changes, delays in net-metering activation, meter shortages, limited vendor availability, issues related to Domestic Content Requirement (DCR) panels, difficulties in accessing bank financing, and slow subsidy disbursement.
The report also highlighted higher installation costs in some states due to complex terrain and geographical conditions. Less reliable grid connectivity in remote areas may also hamper the proper functioning of rooftop solar systems. The Ministry stated that, to overcome these hurdles, it strengthened the implementation framework by empanelling vendors, standardizing processes related to bank financing, and integrating verification mechanisms at the DISCOM level. According to the Ministry, these measures have significantly improved the timeline for subsidy disbursement.
Following the corrective measures, the scheme has generated strong consumer interest, with a substantial pipeline of applications at various stages of approval and installation. The scheme has also shown significant acceleration. Monthly installations increased from about 15,000 in March 2024 to about 61,000 in June 2024, crossed 1 lakh per month by March 2025, and reached about 2 lakh in January 2026. This indicates a rapid scale-up and growing consumer adoption.
The Ministry stated, “Major activities/projects proposed to be undertaken are completion of phase-I of the GEC, completion of tendering process and award of works for InSTS and ISTS in GEC-II. Further, it is anticipated that the next phase may be rolled out during the year 2026-27.” It further stated, “In Green Energy Corridor Phase 3, we are proposing to evacuate 135 gigawatts of renewable energy. We work as catalysts, we provide roughly 33 per cent funding and to that extent, we are likely to seek around 54,000 crores for this.”
PM-KUSUM
The underutilization of funds under the scheme remains a recurring theme in the committee report. Under PM-KUSUM Scheme Component-A, banks’ hesitation to utilize funds was identified as the primary reason for delays in implementation. The government is now attempting to overcome this challenge through persistent financial support to farmers, enabling smoother progress under this component.
Some of the other challenges include delays in state-level tendering, delays in issuing Power Purchase Agreements (PPAs) and Notices to Proceed (NTPs), slow implementation, and the availability of the state share.
Under Component-B, delays were attributed to the lengthy centralized tendering process and the limited availability of vendors at the start of the scheme. Furthermore, reductions in states’ allocated budgets for subsidies further slowed progress and resulted in fewer installations than expected.
To address these challenges, the government revised the guidelines in January 2024 to allow state-level tenders for procuring standalone solar pumps and revised the eligibility criteria to include system integrators as vendors. This broadened the pool of empanelled vendors and helped accelerate installations.
Under Component-C, the committee observed a shift in the Feeder Level Solarisation scheme. The new feeder solarization guidelines introduced in December 2022 shifted the focus toward solarization of agricultural feeders rather than individual pumps.
The model can be implemented by DISCOMs through either CAPEX or RESCO models, without requiring any financial contribution from farmers.
Lauding the success of the scheme, the committee noted that there is significant demand from states over and above the targeted capacities under different components of the scheme.
It said,“The gestation period for such projects is 18 months from the date of the issuance of Letter of Award (LoA). Therefore, most of the capacities are expected to be commissioned in the FY 2026-27.” Concerning the status of PM-KUSUM 2.0, the Ministry stated that the draft Expenditure Finance Committee (EFC) note for PM-KUSUM 2.0 has been prepared and is under circulation for inter-ministerial consultation.
Development of Solar Parks and CPSU Scheme Phase-II Challenges
Under the Solar Park Scheme, around 7 GW of solar power projects are expected to be commissioned in FY 2026-27. The fund requirement will be met through the budgetary allocation under the budget head for grid-connected solar power. Under the scheme, a net aggregate capacity of around 8.2 GW has been sanctioned to 11 different CPSUs/Government organizations. Of this, around 5.7 GW had been commissioned as of January 31, 2026, while the remaining capacity is at various stages of commissioning.
Under CPSU Scheme Phase-II, there is no year-wise physical target. In FY 2026-27, around 1.1 GW of solar power projects are expected to be commissioned under CPSU Scheme Phase-II. The fund requirement will be met from the budgetary allocation under the budget head for grid-connected solar power, which caters to CPSU Scheme Phase-II as well as a few other schemes.
