The Uttar Pradesh government allocated Rs 659.26 billion (bn) to the energy sector in its FY26 budget, an increase of eight per cent from the previous year and with the fiscal deficit capped at three per cent. The allocation reflects a shift towards an infrastructure-led energy transition prioritising grid reinforcement and clean energy rollout rather than target-driven announcements.

Over the past three years the state has undertaken extensive grid strengthening, constructing or augmenting 2,410 new 33/11 kV substations, installing more than 20,900 distribution transformers and enhancing the capacity of over 85,000 transformers. These investments are intended to underpin higher loads and facilitate renewable integration, and they have raised supply hours to around 19 in rural areas, nearly 22 at tehsil headquarters and 24 at district headquarters.

The budget increases support for additional energy sources to Rs 21.04 billion (bn), with emphasis on decentralised solar. Ayodhya, Mathura and 17 municipal corporations are being developed as solar cities while rooftop solar, rural solar street lighting and solar systems are being scaled. Utility-scale solar parks with battery energy storage systems are planned in the Bundelkhand region to firm renewable supply.

Agriculture remains central to the strategy, with Rs 15 billion (bn) allocated for the PM-KUSUM scheme and plans for individual pump solarisation and feeder-level solarisation of around 1,700 megawatt (MW). Since April 2022 the state has issued over 0.241 million (mn) private tubewell connections, which is expected to improve farm-level energy security and ease subsidy pressure.

Emerging technologies are supported through institutional measures, including two Centres of Excellence for green hydrogen at HBTI Kanpur with IIT Kanpur and at MMTU Gorakhpur with IIT BHU to build capabilities. Bioenergy receives continued focus after 36 compressed biogas plants were set up under the state policy and further expansion is planned to leverage agricultural residue.

Capital expenditure remains a priority at 19.5 per cent of the budget. The total outlay is equivalent to Rs 9.13 trillion (tn), underscoring an infrastructure-heavy approach to crowd in private participation by ensuring grid readiness and policy continuity while containing fiscal risk.