Finance Minister Sitharaman puts focus on solar energy sector in Budget 2021. She announced a customs duty hike on solar inverters and lanterns which would have an impact on the rooftop, ground-mounted projects and distributed renewable energy sector. Apart from this to give a further boost to the non-conventional energy the Minister announced fund allocation to the Solar Energy Corporation of India (SECI) and Indian Renewable Energy Development Agency (IREDA). She also proposed a comprehensive National Hydrogen Mission to be launched in 2021-22 for generating hydrogen from green power sources. Industry analysts have welcomed these moves.
“It is a growth oriented and forward looking Budget. The Finance Minister’s focus on healthcare, infrastructure, power and the financial sector will have a positive, broad based impact on the economy. By increasing capex spending significantly without hiking taxes, and instead focusing on expanding economic activity, the FM has set the groundwork for a sharp and sustained economic recovery over the next several years.”
Sumant Sinha, CMD, ReNew Power
The Union Budget 2021 looks promising for the overall growth and revival of the economy which has been impacted due to the pandemic that the entire world witnessed last year. Capital infusion of INR 1,000 crores to Solar Energy Corporation of India and INR 1,500 crores to Indian Renewable Energy Development Agency will give a further boost to the non-conventional energy sector which will help in embracing the country’s green energy movement. Investing in the infrastructure sector, decreasing regulatory restraint, strengthening the regulations, executing digitization in several segments should act as mechanisms in enhancing India’s rank to improve the process of doing business. Notification on phased manufacturing plan for solar cells and solar panels will help in supporting Atmanirbhar Bharat and ramping up domestic capacity. Also, the proposed hike in the duty on solar inverters from 5% to 20% is going to boost domestic production which will further push the Government’s thrust on Atmanirbhar Bharat. The government’s proposal of launching a Hydrogen Energy Mission in 2021-22 will play a significant role in moving towards clean power resource. Considering the current times, this budget is focused on India’s development and is commissioned to accelerate the growth rate.
Bikesh Ogra, Global CEO and Director, Sterling and Wilson Solar Limited
“The announcement of creating a Framework to give consumers the choice of procuring electricity from any distribution company is a welcome move. From consumer’s point of view, giving them power to choose will ensure they are better served. There will also be improved efficiencies in the Distribution companies if they have to compete with each other to stay ahead. However, unless there is guarantee that the policies will be stable for next few years, private players will be hesitant to enter the business of Distribution.
The outcome and result based financial package for the DISCOMs is also a good move and an improvement over the existing UDAY scheme to address the stressed DISCOM Health. This financial aid is only a short term measure. Reforms such as Direct benefit transfer schemes for subsidies along with financial packages is necessary as a long term strategy to help India’s energy sector. The increase in Duty on inverters could have been increased gradually so that the industry is prepared.
The National Hydrogen Mission, and higher allocation to SECI and IREDA, is additionally a booster shot for the renewable energy sector,”
Guru Inder Mohan Singh, COO, Amplus Solar
“Budget 21 is has a mixed bag of luck for the renewable Industry. Speeding up of discom reforms through a package of Rs 3.05 Crs over the next 5 years is a welcome step to keep financial health of discoms in check.
Another announcement of breaking the monopoly of power discoms and providing options to consumers should further open up rooftop and open access segments, however clear enabling provisions should be enumerated by the government. These are positive developments focussing on revival of discoms and also opening up the sector to competition and new technologies.
Having said the above, some old pending requests for rationalization of GST to a lower 6.30% composite rate and deferment of CCD’s on solar module imports have not been considered. Also, Renewables and Solar should be defined as a part of “Infrastructure” and new DFI for infrastructure funding should be permitted to lend to new Renewable/Solar projects also. We suggest the Govt. should review these and come out with required modification in relevant laws to help Renewable/Solar IPPs,”
SK Gupta, CFO, Amp Energy India
Considering the government’s renewed focus on power generation from solar energy, the additional allocation of Rs 1, 000 crore for the Solar Energy Corporation of India and another Rs 1,500 crore for the Indian Renewable Energy Development Agency is a step in the right direction.
The overall focus of this year’s Budget on R&D and innovation will also help in reshaping the solar industry by promoting domestic manufacturing of solar panels. It will enable the industry to create a roadmap for encouraging R&D in cost-efficient and cutting-edge technologies in sync with the Atmanirbhar Bharat Mission.
The infrastructure sector has also received much-needed attention this time, which will help in building transmission infrastructure to ensure efficient evacuation of solar energy and attract more investments for the ambitious Green Energy Corridor project.
The announcement to set up a National Hydrogen Mission will also go a long way in meeting the ambitious target of generating electricity from renewable energy sources.
Simarpreet Singh, CEO and Director, Hartek Solar Pvt Ltd
Premier Energies welcomes the budget. Our honourable finance minister in her 2021-22 Budget speech, announced promoting clean energy initiatives as the Government of India’s commitment to combating climate change. Allocation of resources for solar and renewable energy is a step in the right direction. This will certainly help tackle the burgeoning problem of poor air quality in major Indian cities. By focusing on clean energy, we will be also able to contribute to a cleaner and greener world. As one of the leading domestic players in the renewable energy sector, we will work with the government closely to achieve the target of 175 GW of renewable energy capacity by 2022.
Chiranjeev Saluja, Managing Director, Premier Energies
“We would like to thank the government for giving due emphasis to the Power sector in this year’s Budget 2021. In a highly anticipated move our Honourable FM announced a ₹ 3,05,984 crore scheme to reform the power distribution sector in the country. T&D losses have plagued the Power sector for a number of years and this scheme will surely help reduce losses and improve efficiency of electricity distribution companies (discoms). The proposed amendments and Electricity (Amendment) Bill, 2021 with measures such as ‘de-licensing’ of the power distribution business to bring in competition is a very consumer centric move which aims at creating a level playing field for all distribution companies. The ₹ 1,000 crore grant for the growth of the Solar Energy sector and ₹ 1,500 crore to the Renewable Energy sector is also a welcome move and will help the country in achieving the ambitious target of 175 GW of renewable energy capacity by the year 2022. These measures and reforms will definitely help improve the health of the sector and enhance growth in the coming few years.”
Kush S, CEO, Essar Power
“The FY 2021-22 budget has left the non-utility solar players to fend for themselves. Adding to the misery is the capped net metering of 10KW, which is likely to impact 70% of the rooftop solar business, the Government’s stance to raise import duties on solar inverters will further discourage potential investment in the solar development segment, and adversely affect employment. Similarly, the allocation of ₹ 2500 crore fund to SECI and REDA (cumulatively), is a play on optics and is yet again, not likely to benefit the private players. Moreover, the silence of the authorities on the GST front has now become a matter of concern, which if introduced, had the potential to generate revenue for the Government, and aide private players alike.
The only silver lining in the budget is the Government taking note of the Hydrogen Energy sector and we hope for it to have a serious outlay. This in-turn is likely to prompt Indian players in the sector to take the lead globally.”
Animesh Damani, Managing Partner, Artha Energy Resources
“This budget definitely demonstrates the commitment by the government to boost demand and generate employment through investments in areas like infrastructure, finance, and healthcare. Also, the budget extends support to start-ups and MSMEs through tax exemptions and increase coverage of small companies threshold and, higher allocation towards MSME sector.
From an overall Auto industry standpoint, the soft step towards the introduction of a voluntary scrappage policy is a welcome move. However, driving implementation of the same through incentives/ disincentives and necessary infrastructure is going to be critical. Further, the allocation of Rs 1.97 lacs crore towards PLI along with custom duty increase on components should spur investments in domestic manufacturing. The infrastructure investment focus would definitely drive demand for M&HCVs and construction equipments specifically along with boosting demand for mobility at large.
For the EV industry, it’s been a bit of disappointment with no direct mention of any EV focussed initiative or policy including FAME. There were a lot of expectations from the budget including ramping up of charging infrastructure, enablement of retail financing for EVs, and moderation of the inverted GST tax structure with lowering taxes on EV input components including battery.”
Deepak MV, Co-founder & CEO, Etrio
“We welcome the inclusive and comprehensive budget announced by the Honorable Finance Minister, with its clear emphasis on facilitating and supporting India’s economic, social and green recovery from the pandemic. The energy sector reforms highlight the government’s focus on energy transition. Measures to improve and simplify the energy infrastructure for oil and gas, launch of the hydrogen energy mission, boost to non-conventional energy sources and emphasis on clean air are welcome steps that will strengthen India’s sustainable growth and broaden access to uninterrupted, low carbon energy. We also applaud the slew of measures to help startups and MSMEs grow, a step that will further boost the resolve of an ‘Atmanirbhar Bharat.”
Nitin Prasad, Chairman, Shell Companies in India
“The prime objective of Budget’21 is to boost and revive the economy that suffered a major setback due to the global pandemic COVID-19 while also increasing the purchasing power of the customers. Allocation of Rs 3.05 lakh crore outlay over 5 years for a more revamped reforms-based power distribution sector scheme will provide assistance to the DISCOMS which further will benefit us in establishing well-defined strategies and plans to generate more demand and ensure smooth power supply. Further, the government’s announcement to boost renewable energy, solar energy corporation to boosting renewable energy development would in turn help us frame the sector very differently and efficiently. Additionally, looking ahead at the zeal to augment the country’s infrastructure with highway, enhancing public transport in urban areas will prove to be beneficial for the overall development of the society and give the much needed boost to manufacturing companies like ours to get back to powering the economy as per pre-covid levels.
Anil Gupta, Chairman-cum-Managing Director, KEI Industries Ltd