MNRE Offers Up to 50 Funding for Industrial Solar Thermal Projects

New Delhi, September 11, 2026: The Ministry of New and Renewable Energy has invited proposals for deploying concentrating solar thermal technology in Indian industries, offering financial assistance of up to 50% of project cost with support capped at ₹2 crore for each selected project.

The proposal window opened on September 8 and will close on October 7, 2026, according to the ministry's current notice.

The programme is aimed at industrial process-heating applications where conventional fuels can be partly replaced with solar-generated thermal energy. The Economic Times reported the government initiative on September 9, noting that the funding is intended to support sectors ranging from food processing and textiles to chemicals and metals.

Funding Capped at ₹2 Crore Per Project

Under the programme, eligible projects can receive financial assistance of up to 50% of the project cost, subject to a ceiling of ₹2 crore.

The support forms part of MNRE's Renewable Energy Research and Technology Development programme, for which the ministry has continued administrative approval for the 2026-27 to 2030-31 Finance Commission period.

The funding can be used to demonstrate commercial applications of concentrating solar thermal systems for process heat and related industrial uses.

MNRE is seeking projects that can establish technical performance, operating reliability, economics and replication potential under real industrial conditions.

Applications Open Until October 7

MNRE's official notice lists the programme dates as:

Programme Detail	Date / Amount
Proposal window opens	September 8, 2026
Proposal deadline	October 7, 2026
Maximum funding	Up to 50% of project cost
Maximum support per project	₹2 crore
Industrial CST potential cited by MNRE	Around 6.45 GWth

The call remains listed among MNRE's current notices as of September 11.

Industrial Solar Thermal Potential Estimated at 6.45 GWth

MNRE estimates India's industrial market potential for concentrating solar thermal systems at around 6.45 GWth.

The ministry identifies dairy, food processing, paper and pulp, chemicals, textiles, fertilizers, breweries, pharmaceuticals, rubber, electroplating and desalination among industries with potential for solar thermal deployment.

The latest programme extends the potential application base to a wider range of industrial heat requirements.

Unlike conventional photovoltaic projects, which primarily produce electricity, the systems covered by the latest proposal are aimed at generating heat for industrial processes and, where applicable, pairing that heat with thermal energy storage.

Solar Thermal Projects to Replace Fossil-Fuel Process Heat

Industrial process heating remains a major area of fossil-fuel consumption.

The new programme is designed around installations where concentrating solar systems can replace part of the fuel used to produce steam, hot water or higher-temperature process heat.

According to the Economic Times report on the programme, financial support is available to industry participants, start-ups and entrepreneurs developing industrial applications.

MNRE's concentrating solar thermal programme covers technologies capable of supplying heat for industrial uses as well as heating, cooling, desalination and power-generation applications.

Five-Year Operations Requirement Included

The proposal framework also requires technology providers selected for projects to remain responsible for operation, maintenance and performance monitoring for a minimum of five years.

The requirement marks a shift from one-time technology demonstration toward longer-duration performance assessment.

Project developers are expected to undertake system design, installation, commissioning and integration with the host industry's thermal requirements, while participating industrial units are required to provide site access and operating data.

CSP Has Remained a Small Part of India's Solar Capacity

The latest programme comes after more than a decade of limited deployment of concentrated solar technologies compared with photovoltaic solar.

India's first National Solar Mission programme selected seven concentrated solar power projects totalling around 470 MW, but the programme did not deliver the deployment scale initially envisaged.

A Climate Policy Initiative assessment cited in the research supplied to Vantage found that only a fraction of the targeted capacity had been commissioned during the early programme.

The sector faced delays involving financing, technology procurement, resource assessment and project execution.

₹46.26 Crore Demonstration Plant Had Earlier Drawn Parliamentary Scrutiny

India's earlier solar-thermal development programme also included a 1 MW grid-interactive solar thermal plant developed at the National Institute of Solar Energy.

The project cost approximately ₹46.26 crore but later became non-operational, prompting examination by Parliament's Public Accounts Committee.

The committee referred to the expenditure as infructuous and called for efforts to revive the plant. The Comptroller and Auditor General had also identified the absence of a dedicated operating workforce as one of the factors behind the project's non-utilisation.

The latest MNRE programme's five-year O&M condition puts greater emphasis on continued operation after commissioning.

PV Capacity Has Expanded While CSP Remained Limited

The renewed solar-thermal programme comes at a time when India's broader solar sector has expanded rapidly through photovoltaic installations.

MNRE's current solar programme is now dominated by ground-mounted PV, rooftop solar and other photovoltaic applications, while concentrating solar thermal remains a comparatively small segment.

The ministry's decision to issue a separate industrial CST proposal therefore focuses on an area that has not expanded at the same pace as mainstream solar power.

Thermal Energy Storage Included in Current Push

MNRE also lists thermal energy storage as part of its concentrating solar thermal approach.

Thermal storage allows heat collected during periods of strong solar radiation to be retained for later use.

The ministry lists oils, molten salts and phase-change materials among possible thermal storage media used with concentrating solar systems.

The current programme comes as different energy-storage technologies compete for applications across India's renewable-energy sector.

Battery energy storage is expanding rapidly for grid applications, while thermal storage remains associated particularly with heat applications and concentrated solar systems.

NTPC Has Also Been Examining CSP With Storage

Separately from MNRE's industrial heat programme, NTPC has been examining concentrated solar power projects combined with thermal storage for electricity generation.

The proposals cited in the research include a 50 MW CSP plant with eight hours of thermal storage and larger renewable configurations combining CSP with wind, photovoltaic generation and storage.

These projects remain distinct from MNRE's September industrial-heat proposal call.

Global CSP Projects Continue to Operate at Utility Scale

Concentrated solar power has achieved larger-scale deployment in overseas markets.

Morocco'sNoor Ouarzazate solar complex has approximately 580 MW of combined capacity, including parabolic-trough CSP, tower CSP and photovoltaic generation.

The complex has also experienced operational issues. The 150 MW Noor III tower project suffered a major molten-salt storage failure and remained offline for more than a year before returning to operation in April 2025.

The experience has remained part of the global debate around CSP costs, thermal storage and long-duration renewable generation.

Industrial Heat Is the Focus of the New Proposal

The September 2026 MNRE call differs from India's earlier utility-scale CSP auctions by concentrating on industrial applications.

The proposal seeks projects that operate alongside existing industrial systems and demonstrate measurable fossil-fuel substitution.

MNRE's own CST market assessment puts industrial potential at about 6.45 GWth, making industrial process heating the primary market addressed by the current programme.

The ministry has not announced a national deployment target under the September call.

Key Numbers

Item	Figure
MNRE proposal launch	September 8, 2026
Application deadline	October 7, 2026
Maximum project support	50%
Funding ceiling	₹2 crore per project
Estimated industrial CST potential	6.45 GWth
Earlier National Solar Mission CSP awards	~470 MW
NISE demonstration plant cost	₹46.26 crore
NISE demonstration plant capacity	1 MW
Noor Ouarzazate complex	~580 MW
Noor III CSP tower unit	150 MW

What Happens Next

Applications under the MNRE call are scheduled to close on October 7, 2026.

The ministry will evaluate submitted proposals under its Renewable Energy Research and Technology Development framework.

The next developments will be the selection of projects, participating industrial companies, approved financial assistance and the thermal capacity covered by the first group of installations.

MNRE has not yet published those project awards.

The latest call places concentrating solar thermal technology back on India's renewable-energy programme after years in which photovoltaic solar accounted for most new solar investment.

ForVantage Radar, the next update will be the project-selection stage following the October deadline.

For a deeper look at India’s CSP market, its past challenges and the emerging industrial-heat opportunity, read our detailed Vantage Insights analysis.

Sources

This report uses the Ministry of New and Renewable Energy's September 8, 2026 proposal notice, MNRE's Concentrated Solar Thermal programme information, its Research & Development programme records, contemporary reporting from The Economic Times, and historical CSP material supplied for the article.

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