Budget 2026: ACME Solar Gains Big on Battery Storage Push

Introduction: A Budget Focused on Green Manufacturing

The Union Budget 2026, presented by Finance Minister Nirmala Sitharaman, has laid out a clear path for India's green energy transition, with a strong emphasis on bolstering domestic manufacturing capabilities. For ACME Solar Holdings Ltd., a leading renewable energy player with ambitious plans in energy storage, the budget offers targeted support that directly aligns with its strategic shift towards Firm and Dispatchable Renewable Energy (FDRE). The key announcement—an extension of customs duty exemption on capital goods for lithium-ion cell manufacturing—provides a significant tailwind for the company's capital-intensive expansion plans.

Direct Boost for Energy Storage Ambitions

The most impactful measure for ACME Solar in Budget 2026 is the decision to extend the Basic Customs Duty (BCD) exemption on capital goods and machinery imported for the manufacturing of lithium-ion cells for Battery Energy Storage Systems (BESS). This policy directly addresses a major cost component for companies looking to establish a domestic footprint in the energy storage value chain.

ACME Solar has been aggressively expanding its BESS portfolio, with 5.1 GWh of systems already on order and several large-scale solar-plus-storage projects under construction, such as the 300 MW ACME Sigma FDRE project. The customs duty exemption will directly lower the capital expenditure (CAPEX) required to set up integrated manufacturing facilities. This reduction in upfront cost improves the financial viability of these projects, enhances their internal rate of return (IRR), and accelerates ACME's ability to scale its storage capacity, a critical element for providing stable, round-the-clock green power.

Favourable Environment for Project Financing

As a developer of large-scale infrastructure, ACME Solar is heavily reliant on long-term financing. The company has recently demonstrated its ability to raise substantial capital, securing over ₹10,590 crore in greenfield financing in the current financial year. The Union Budget 2026 reinforces a favorable macroeconomic environment for such endeavors.

The government's proposal to increase the public capital expenditure outlay to ₹12.2 lakh crore signals a continued push for infrastructure development, which indirectly stimulates power demand. Furthermore, proposals to introduce a market-making framework for corporate bonds could enhance liquidity in the debt market. For a capital-intensive company like ACME, a deeper and more liquid corporate bond market can translate into lower borrowing costs and more diverse funding avenues over the long term.

The Unfulfilled Wishlist: GST and VGF Remain Untouched

While the budget provided a significant supply-side incentive, it did not address all the key demands of the renewable energy industry. A prominent expectation was the reduction of the Goods and Services Tax (GST) on BESS from the current 18% to 5%. This would have directly lowered the cost of energy storage services for end-consumers and discoms.

The absence of a GST cut means that the overall cost of deploying storage solutions remains a key consideration. Similarly, the industry's call for an enhanced Viability Gap Funding (VGF) scheme to support the initial wave of large-scale BESS projects was not explicitly addressed. While the existing framework remains, a more aggressive VGF push would have accelerated deployment. For ACME, this means that while manufacturing costs are set to decrease, the overall project economics must still account for the existing tax structure.

Key Budget 2026 Announcements for ACME Solar

Strengthening the Broader Solar Ecosystem

The budget also included a measure to exempt basic customs duty on the import of sodium antimonate, a critical material used in manufacturing solar glass. While ACME Solar is primarily an Independent Power Producer (IPP), a stronger and more cost-competitive domestic supply chain for solar components is beneficial for the entire sector. This move supports the government's 'Atmanirbhar Bharat' vision and can contribute to long-term cost stability and reduced import dependency for the industry as a whole.

Investor Outlook and Conclusion

For investors, the Union Budget 2026 reinforces the policy stability and government support for the renewable energy sector, particularly in the high-growth area of energy storage. The targeted customs duty relief for BESS manufacturing is a tangible benefit that directly enhances ACME Solar's competitive position and validates its strategic focus on dispatchable renewables.

In conclusion, Budget 2026 delivers a clear, positive signal for ACME Solar. By lowering the cost of entry into battery manufacturing, the government has provided a crucial lever to help the company achieve its ambitious growth targets. While the industry's entire wishlist was not fulfilled, the focused support for domestic manufacturing provides a solid foundation for ACME Solar to strengthen its role as a key player in India's clean energy transition. The focus will now shift to the swift implementation of these policies to translate budgetary intent into on-ground capacity.