Budget: Himachal Announces Interest Subsidies For Solar Projects

The Himachal Pradesh government has now envisioned to become the first green state of India. In its latest budget presented by Himachal Pradesh Chief Minister Sukhvinder Singh Sukhu, the CM announced several measures to bolster the growth of solar energy in the state. This included interest subsidies for solar projects up to 1 MW in tribal and non-tribal areas, a new solar project in Kangra and supporting farmers to install solar fencing besides paving the way for creating ‘green panchayats’.

“The Government’s goal is to make the State the country’s first green State by 2026. In the Government sector, HPPCL aims to establish 500 MW of solar capacity projects by 2026-27. To achieve this goal, around 626 MW of solar projects are in various stages of development,” he said.

Advancing Towards Green Energy

The Himachal budget has earmarked ₹905 crore to boost the energy sector. The CM stated, “Gradually, our energy consumption needs is now primarily based on Hydro and Solar sources. The growth in solar energy during this Government’s tenure is unparalleled something never seen before.”

He also said that in carrying forward the “Mukhya Mantri Khet Sanrakshan Yojana” farmers would now be provided assistance for solar fencing, wire mesh, and barbed wire fencing to protect their crops from wild animals. The CM also talked about offering interest subsidies for solar projects in tribal and non-tribal areas.

“To create self-employment opportunities in solar energy, the Government will provide a 5% interest subsidy for establishing solar projects ranging from 250 kW to 1 MW in tribal areas and other identified locations such as Bara Bhangal, Dodra Kwar, Kupvi, Tissa, and more, through the private sector. In non-tribal areas, solar projects ranging from 250 kilowatts to 1 megawatt will receive a 4% interest subsidy, while projects larger than 1 megawatt will be eligible for a 3% interest subsidy,” he said in the Budget Speech.

He also said that a large 200 MW solar project will be established in Kangra, Damtal, with the goal of completion within a year. This project is expected to generate 320 million units of electricity annually, resulting in approximately ₹150 crore in revenue per year. “Under the “Green Panchayat Scheme, 500-500 kW solar projects will be set up in 100 panchayats,” the CM said in the Himachal Budget.

Infrastructure Development in the Energy Sector

The state is also investing in Pumped Storage Projects (PSPs) to accelerate development in the power sector. The minister elaborated, “The state government will invite investments from central and state government enterprises to increase private sector investments in the energy sector. Work on 220 kV substations in Kangu (Mandi District) and Tahliwal (Una District) will be initiated. Two 132 kV substations will be established in Dharampur (Mandi District) and Barsaini (Kullu District). Six substations (33 kV and 11 kV) will be set up in Ganog (Nurpur), Karla Kotla (Dehra), Majhin (Jwalamukhi), Moki (Indora), Samloti (Nagrota Bagwan), and Ther (Jwalamukhi) in the upcoming financial year.”

Boosting Sustainable Transport

The government is also extending support to build electric vehicle (EV) charging stations. It plans to make them operational at 80 petrol pumps and set up additional charging stations at 41 locations along the Green Corridor under a public-private partnership (PPP) model. An additional 500 e-buses will be procured.

The minister emphasized that greenhouse gas emissions from the transport sector account for approximately 16–20% of the state’s total emissions. To address this, the government is promoting e-buses in HRTC’s fleet, establishing charging stations on identified national highways, and introducing subsidies for e-taxis. The use of e-vehicles in government departments has already begun.

Climate Resilient Villages and Renewable Energy Microgrids

The State Government will identify 100 climate-sensitive villages in backward areas and develop them through climate-smart agriculture and renewable energy microgrids under the Climate Resilient Villages (CRV) Programme to reduce disaster risks, enhance crop protection, ensure nutritious food security, and empower rural communities.

Moreover, with an eye on industrial growth, the Himachal Pradesh government seeks to attract investments in sectors such as green energy, solar energy, dairy production, and electric vehicles. It also plans to organize Investor Outreach Programmes in the upcoming financial year.