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Budget to boost investment in renewable energy sector

Budget to boost investment in renewable energy sector
Image Credit: Wikimedia

Cheering the government's proposal to set up mega manufacturing plants for solar cells, batteries and solar charging infrastructure, industry experts said the move will give a boost to the sunrise industry and Make in India program. The industry experts, however, noted that such initiatives would require a larger support structure in the form of soft loans, export credits in order to compete globally.

"The incentives can help us achieve the goal of making India a global hub for R&D and manufacturing of advanced energy storage and EVs by 2022," India Energy Storage Alliance (IESA) President Rahul Walawalkar said. While presenting her maiden Budget, Finance Minister Nirmala Sitharaman said, "the government will launch a scheme to invite global companies through transparent bidding to set up mega manufacturing plants in sunrise and advanced technology areas such as semiconductor fabrication." KPMG in India Partner Tax Nabin Ballodia said the government's focus on mega investments in manufacturing of solar photo voltaic cells, solar electric charging infrastructure and batteries, as well as the reduction in customs duty on import of all forms of uranium for a generation of nuclear power, would provide a major fillip to the renewable energy sector.

Vikram Solar CFO Rajendra Parakh said, "the industry was expecting a policy direction from the government to promote the manufacturing through 'Make In India' program, especially in the renewable energy sector. This scheme aimed at encouraging global companies, through the competitive bidding process, appears to be a step forward in that direction." Domestic solar module manufacturers' body AISIA said for the energy security of the country we need to have our own strong manufacturing sector and not continue to import 90 percent of our energy-generating solar panels. "Government support is also needed for sustainable capacity installation and investments. Today the lack of support through subsidies on power, capital, interest, depreciation, and incentives on exports are awaited to attract new investment in the sector," AISIA Secretariat Sanjay Choudhary said.

Waaree Energies Director Sunil Rathi said the infusion of Rs 70,000 crore in the PSBs to stabilize the economy will in-turn benefit the NBFCs, which, in the absence of a recognized banking unit to support small mid-scale solar financing, will provide an impetus to the solar project financing. Inadequate domestic solar equipment manufacturing capacity has been an issue for the past many years especially in view of India's ambitious renewable energy target of having 175GW by 2022.

PwC India's Sambitosh Mohapatra said, "the focus on group captive can trigger massive interest of large international utilities to invest in the power sector. Captive rules amendment which has been in discussion since long should conclude soon." CleanMax Solar CFO Nikunj Ghodawat said the tax exemption for domestic manufacturers of solar cells, modules and EVs is expected this to bring down prices of domestic solar modules and batteries.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)

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