Government Offers Up to 2 Crore to Help Industries Switch to Solar Heat

The Ministry of New and Renewable Energy (MNRE) is offering financial support of up to ₹2 crore per project to encourage Indian industries to replace fossil-fuel-based heating with solar thermal technology.

Under the new call for proposals, the government can provide financial assistance covering up to 50% of project costs, subject to a maximum of ₹2 crore per project. The support may be provided as viability gap funding, according to The Economic Times.

The initiative is focused on concentrating solar thermal (CST) technology for industrial process heating. MNRE is inviting proposals from industry, start-ups, private institutes and entrepreneurs under its Renewable Energy Research and Technology Development Programme.

Solar heat targets industrial processes

Solar thermal systems use sunlight to produce heat rather than electricity. That heat can be used for applications such as water heating, steam generation and industrial process heating.

MNRE's proposal call is aimed at projects that can demonstrate commercially viable and scalable solar thermal systems, including systems integrated with thermal energy storage and existing industrial processes.

The potential applications span industries where heat is a significant part of production. These include food processing, textiles, chemicals and metals, among other sectors.

The programme therefore targets a part of industrial energy use that is different from conventional rooftop or utility-scale solar power. Instead of producing electricity first and then using it to generate heat, solar thermal technology can supply heat directly for suitable industrial processes.

Funding is capped at ₹2 crore

The government will fund up to half of the eligible project cost, with assistance capped at ₹2 crore for an individual project.

That means a project costing ₹4 crore could, in principle, receive the maximum ₹2 crore support if it meets the programme's requirements. A higher-cost project would still face the ₹2 crore ceiling. The exact assistance will depend on the proposal and its evaluation under the programme.

The funding is intended to help move solar thermal systems beyond the demonstration stage and establish their technical and economic viability in operating industrial environments.

Projects must demonstrate real-world viability

MNRE is looking for proposals that can be demonstrated within existing industrial processes rather than simply testing solar thermal technology in isolation.

The programme is intended to support systems that can eventually be scaled and replicated, with thermal energy storage also forming part of the technology focus. Storage can allow solar-generated heat to be used beyond periods of direct sunlight.

The proposal call covers several forms of concentrating solar thermal technology, including parabolic trough, linear Fresnel, parabolic dish and power-tower systems. Solar PV combined with heat-pump technology is also covered for suitable temperature applications.

October 7 is the proposal deadline

Interested applicants have until October 7, 2026, to submit proposals under the call.

For industries that rely heavily on fossil fuels for heat, the programme could provide an opportunity to test whether solar thermal systems can meet part of that demand at commercial scale. The immediate test, however, will be whether proposed projects can demonstrate reliable performance, economic viability and practical integration into existing factories.

The initiative represents a shift in how solar technology is being applied in India's industrial sector: not only as a source of electricity, but also as a potential direct source of process heat.

Sources

https://economictimes.indiatimes.com/industry/renewables/govt-offers-50-funding-capped-at-rs-2-crore-to-replace-fossil-fuels-with-solar-heat-in-industry/articleshow/133937506.cms

https://timesofindia.indiatimes.com/business/india-business/govt-offers-rs-2cr-aid-to-help-industries-switch-from-fossil-fuels-to-solar-heat/articleshow/133977787.cms

Energetica India: https://www.energetica-india.net/news/mnre-offers-up-to-inr-2-crore-support-for-concentrating-solar-thermal-projects