2026–27: Kerala Allocates ₹1,309.84 Cr Budget to Power Sector, Adds BESS, Smart Meters, PSP

Kerala’s latest 2026–27 budget saw an upsurge in the state’s energy sector, with a strong emphasis on renewable energy systems, energy efficiency projects, electricity security programmes, and initiatives promoting green energy.

In a budget speech, Kerala Finance Minister K N Balagopal spoke about increasing budget allocation for the power sector, which rose to ₹1,309.84 crore. Of this, ₹1,238.80 crore has been earmarked for the Kerala State Electricity Board (KSEB) for power sector development through various funding sources, while ₹71.04 crore has been allocated for non-conventional and renewable energy sources.

Kerala's Budget Remains Optimistic For BESS, Smart Meters & PSPs

The Kerala government’s latest budget reflected optimism for energy projects, with an allocation of ₹1,238.80 crore to implement various initiatives under KSEB. Among projects with state share, three new initiatives—Battery Energy Storage Systems (BESS), installation of smart meters, and pumped storage projects—have been allocated ₹5 crore, ₹31.22 crore, and ₹5 crore, respectively. An amount of ₹150 crore has been earmarked for the implementation of externally aided projects, namely the Energy Efficiency Indian Grid and the Green Energy Corridor.

Kerala’s allocation for the Agency for Non-Conventional Energy and Rural Technology (ANERT) increased to ₹53.18 crore to implement programmes promoting non-conventional and renewable sources of energy. The government also earmarked ₹7 crore to install solar power systems to improve the quality of life of people in remote tribal Unnathis that are yet to be electrified.

To promote green hydrogen projects, the government allocated ₹7.18 crore and earmarked ₹9.36 crore for the Electrical Inspectorate to implement electrical safety activities. Meanwhile, the Kerala government earmarked ₹7.71 crore for the Meter Testing and Standards Laboratory to ensure the safety of electrical installations and to expand testing facilities in laboratories.

Building Community-Based Solar Generation

To support grama panchayats and make them self-sufficient in energy generation, the government promoted community-level solar energy production and storage. The budget recommended the creation of facilities for the storage and distribution of solar energy and allocated ₹1 crore to each panchayath. The government plans to develop this pilot project in Perinjanam in Thrissur, with ₹2 crore earmarked for the project.