6.6 Trillion Won for 'Energy Transition'... Solar Income Villages to Expand from 700 to 2,200 [2027 Budget Plan]

Yonhap News Agency

The government will significantly increase its financial investment in the renewable energy and carbon neutrality sectors next year. The budget allocated for expanding renewable energy—such as rooftop solar panels on factories and agrovoltaics—will be doubled to 1.8 trillion won, while the number of “solar income villages” will also be expanded to 2,200 locations. In addition, the volume of electric vehicle subsidies will be raised to a record-high 430,000 cars, representing an all-out effort to support both renewable energy production and eco-friendly energy consumption.

According to the “2027 Budget Proposal” announced by the Ministry of Planning and Budget on September 1, 2026, the government will increase its budget for the “energy transition” from 4.2 trillion won this year to 6.6 trillion won next year, an increase of 2.4 trillion won. The plan is to accelerate the pace of energy transition, with renewable energy expansion and carbon neutrality as its two main pillars.

First, investment in the renewable energy sector—including solar power and solar income villages—will more than double, from 1.3 trillion won to 2.8 trillion won. Of that amount, the budget for distributing renewable energy through initiatives like rooftop solar panels on factories and agrovoltaic installations will be raised from 900 billion won this year to 1.8 trillion won next year. The number of solar income villages will rise from 700 to 2,200, more than tripling. The government plans to create 1,500 new villages, each with an average capacity of 650 kW. Investment in research and development (R&D) aimed at improving renewable energy generation efficiency will also increase from 100 billion won to 200 billion won.

Financial support will also be strengthened to reduce the private sector’s burden for investing in renewable energy. The government will introduce a new guarantee program worth 24.9 billion won for solar income cooperatives, and expand the tailor-made guarantee for offshore wind power projects from 40 billion won this year to 60 billion won next year. The budget for renewable energy financial support will increase from 648 billion won to 1.5108 trillion won, supporting the expansion of facilities for 2.1 GW of solar power and 1.2 GW of wind power.

The government will also inject 3.8 trillion won next year—up from 2.9 trillion won this year—into creating demand for carbon-free energy as part of its carbon neutrality goal. In particular, the volume of electric vehicle subsidy support will increase from 300,000 vehicles this year to 430,000 vehicles next year. The corresponding budget will also be expanded from 2.3 trillion won to 3 trillion won. This decision comes in light of rapidly rising demand; in the first half of this year, electric vehicles accounted for 23.3% of all new cars—a 12.2 percentage point increase compared to the first half of last year.

The government will also accelerate electrification in the heating sector. The budget for deploying heat pumps for single-family homes and welfare facilities will rise almost fourfold, from 15.7 billion won to 63.5 billion won, and 28.4 billion won will be invested in large-scale heat pump pilot projects targeting apartment complexes and industrial parks. The budget for green finance—which provides loans, guarantees, and funds to green companies—will increase from 596.2 billion won to 744.7 billion won.

This content was produced with the assistance of AI translation services.