Tamil Nadu Announces Residential Rooftop Solar Subsidy of Up to INR 1 Lakh
Tamil Nadu's Revised Budget 2026-27 proposes a rooftop solar subsidy of up to INR 1 lakh, a new BESS Promotion Policy and major investments in power generation, transmission and distribution infrastructure.
August 06, 2026. By Mrinmoy Dey
He further added that the government has earmarked INR 50 crore for implementing the scheme. A system for installing smart meters will also be introduced for all consumers in Chennai city, as well as for 50 lakh industrial and commercial consumers across other parts of the state, he said.
Highlighting the power sector's role in achieving Tamil Nadu's vision of becoming a USD 1.5 trillion economy by 2036, the Finance Minister said the government will expedite the Udangudi Stage-I and Ennore SEZ Thermal Power Projects, which together are expected to add 2,640 MW of generation capacity.
The government will also accelerate implementation of the ETPS Expansion Project, estimated to cost INR 8,000 crore, through the public-private partnership (PPP) model, along with the INR 5,050 crore Vellimalai Pumped Storage Hydroelectric Project.
Recognising the growing importance of energy storage for grid flexibility and peak demand management, Wilson announced that the state will introduce a new BESS Promotion Policy to facilitate private investment and position Tamil Nadu as India's ‘BESS Hub’.
With Tamil Nadu's peak power demand projected to exceed 37,000 MW by 2035-36, the government has proposed significant investments in transmission infrastructure. These include the INR 4,000 crore Coimbatore-Ariyalur 765 kV Transmission Line Project under the PPP model and strengthening ultra-high-voltage transmission capacity in Chennai and surrounding areas through investments of INR 1,390 crore.
The state will also expedite the Phase-II Green Energy Corridor Project, valued at INR 1,187 crore, and the Virudhunagar-Coimbatore 765 kV Transmission Project, estimated at INR 1,640 crore. Additionally, the government plans to secure financial assistance for the Phase-III Green Energy Corridor Project, estimated to cost INR 6,884 crore, which is designed to evacuate 11,760 MW of renewable energy.
To strengthen the distribution network, the government will establish 178 new substations at a cost of INR 1,543 crore and replace 40,000 ageing transformers in phases with an investment of INR 2,000 crore.
To support electric mobility, Tamil Nadu plans to install 20,000 public EV charging stations over the next five years under the PPP model, with INR 50 crore allocated in the current financial year. The government will also provide subsidies to Resident Welfare Associations (RWAs) for installing EV charging infrastructure in residential complexes, backed by an allocation of INR 5 crore.
The Revised Budget also allocates INR 1,545 crore to increase the free electricity entitlement for eligible domestic consumers from 100 units to 200 units for households with bi-monthly consumption of up to 500 units. A total of INR 18,860 crore has been earmarked towards electricity subsidies for domestic and agricultural consumers, while INR 5,000 crore has been allocated as compensation to the Tamil Nadu Generation and Distribution Corporation. Overall, the Energy Department has received an allocation of INR 15,828 crore in the Revised Budget Estimates.
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