What The Renewable Industry Expects From Union Budget? 

What The Renewable Industry Expects From Union Budget? 

Days ahead of the Union Budget 2024, the Indian renewable energy companies have pinned their hopes on the event. A number of green companies have shared their expectations from the budget. Several of them batted for attention of better taxation regime, working on the hurdles for the green companies and suggested several means that can lead to the growth of the green industries in India and achieve India’s renewable targets by 2030. 

Following are the views expressed by the industry leaders from the Union Budget which is slated to be tabled before the Indian Parliament by Union Finance Minister Nirmala Sitharaman soon. In the last interim Budget presented before the House, the Finance Minister talked about the budgetary allocations for PM Surya Ghar and discussed other green incentives. A number of industry leaders now expect a ‘green budget’ with more focus on the renewable energy sector. 

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“Government’s intervention to reduce the tax burden on renewable energy projects is crucial. Rationalizing the Goods and Services Tax (GST) across all components and rationalizing the Basic Customs Duty (BCD) on solar modules/cells can collectively lower costs, improve cash flow, enhance project viability, simplify compliance, and foster market growth. These measures will make RE projects more attractive and feasible, driving the widespread adoption of renewable energy

Sharad Pungalia, MD & CEO, Amplus Solar 

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“We hope that the government will revise the GST rates for renewable energy components, reducing it to 5% (from current 18 %), thereby significantly lowering the cost structure for green energy projects. This will also increase the affordability and attractiveness of renewable energy investments, promoting faster adoption across the country.”

Amit Jain, Global CEO, Sterling and Wilson Renewable Energy

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“To further shape the renewable energy sector, the government must focus on large-scale investments in domestic solar panel and component manufacturing facilities. This will not only shorten supply chains and reduce dependency on imports, but also create a cost-competitive advantage. Introducing new skill development programs, incentives, funding, import duties, subsidies, and crafting favourable policies that can boost R&D and innovation will further bolster the sector,”  

Capt. Ishver Dholakiya, MD, Goldi Solar

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“Indian solar capacity has reached 84 GW in May 2024, however, still falling short to achieve the nation’s 2030 goals. Hence, owing to the building up demand and to meet the target of international goals set at global platforms, we need to start enhancing our manufacturing capacities for which we request the finance ministry to consider the extension of concessional tax rate for new manufacturing units commencing after 31-Mar-2024. We are confident that with adequate support from both states and the Central government, we as a nation will be able to propel global renewable energy growth, especially for emerging economies in the global south.”

Vinay Thadani, Director & CEO, Grew Energy Private Limited

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“We are hoping that PM Surya Ghar scheme gets cemented in the final budget. The implementation of this budget and scheme on the ground will be crucial to the success of India’s targets. We expect concessional loans from public sector banks for residential solar consumers that were announced earlier and should see practical implementation on the ground along with fast tracking and digitisation of loan approvals. Moreover, a boost in domestic manufacturing in entire value chain of solar panels (cell, wafer, ingot, glass, frames, etc.) is required as Made In India solar panels (DCR) are mandatory for residential solar customers availing subsides under this scheme.”

Shreya Mishra, Co-Founder, SolarSquare

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“One of the major expectations from the Union Budget 2024 is the rationalisation of the Goods and Services Tax (GST) on solar equipment. The PM Surya Ghar scheme is a commendable initiative. Further expanding and promoting such schemes can empower more households to adopt solar energy, leading to significant savings and contributing to India’s sustainability goals. The recent increase in budget estimates for grid-based solar power from ₹4,757 crore to ₹10,000 crore is a positive step. However, continuing this trend with more financial support can help accelerate the installation of solar power systems, particularly in the rooftop segment.”

Tanmoy Duari, CEO, AXITEC Energy

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“For the Union Budget 2024, we anticipate a significant boost to the clean energy sector, building on the government’s commendable efforts over the past decade. There is a need for substantial increase in allocations towards scaling-up decentralised renewables and battery storage. Recognizing that an effective energy transition requires seamless inter-ministerial coordination, it is essential that the government implements robust institutional arrangements to expedite this transition at the state level, possibly through a dedicated commission.

Saurabh Kumar, Vice President- India, Global Energy Alliance for People and Planet (GEAPP)

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“In FY 2023-24, the country added just over 18 GW. To support this ambitious goal, the government could implement several key tax measures in the upcoming budget. Reducing GST on wind projects from 12% to 5% and easing restrictions on developers and original equipment manufacturers (OEMs) through lower import duties could enhance wind project development. Lowering GST on lithium-ion batteries and related infrastructure (currently 18-28%) would also help boost electric vehicle adoption. Additionally, the power from Pumped Hydro Storage (PHS) plants is currently taxed twice—once on the stored energy and again on its final delivery. To address this issue, the government should consider eliminating electricity duties and cross-subsidy surcharges on the input power for storage projects.”

Gaurav Upadhyay, Energy Finance Specialist, India Sustainable Finance – IEEFA

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“The key priorities include enhancing residential solar adoption with proposed personal income tax benefits up to 3 lakhs. This can be considered instead of the current subsidy of Rs.78,000. For commercial and industrial (C&I) sectors, increasing depreciation benefits to 60-80% from the current 40% will incentivize substantial investments in solar installations, bolstering sustainability efforts across businesses. The removal of anti-dumping duties on raw materials for solar modules is crucial to enhancing manufacturing competitiveness and reducing dependency on imports. Additionally, a proposed 7-year tax holiday for investments in PV module or solar cell production will stimulate domestic manufacturing capabilities, fostering job creation and economic growth.”

N.P Ramesh, COO and Co-Founder of Orb Energy

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“The Union Budget 2024 presents a vital opportunity for India to accelerate its transition to a green hydrogen economy. The government can consider lowering GST on solar modules, wind turbines and electrolysers from the current rate of 5% could significantly help reduce project costs. Reducing customs duties on imported solar cells and modules, and key electrolyser components like stacks, can help enhance the economic feasibility of both solar projects and projects involving green hydrogen,” 

Dhiman Roy, CEO of GreenH Electrolysis 

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“Improved integration of DISCOM’s with the National portal (for PM Surya Ghar) will play a significant role in helping customers transition to solar quickly. In addition to this, providing incentives to local solar cell manufacturers will be important, because it ensures that supply will keep up with the upcoming demand for solar modules made in India cells. Finally, continuing the subsidy scheme and other similar initiatives for the next few years will help companies in this sector scale up and will help India meet its net zero goals ahead of schedule.”

Saurabh Marda, Founder & MD of Freyr Energy 

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“The renewable sector must see exponential increase in investments. I hope the forthcoming Union Budget would facilitate the ecosystem for this. With a robust investment inflow enabled by policy stimulus, the sector can add 50-60 GW annually from the present 10 GWs to 15 GWs. Higher loan capital is vital for this. With financial infrastructure, and a streamlining of land acquisition, I am confident of incremental market depth and scope which has a direct bearing on the sector.” 

Udit Garg, CEO & Director, Kundan Green Energy

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