Budget 2022: Reactions From The Clean Energy Industry

The Union Finance Minister Nirmala Sitharaman

Reading Time: 22 minutes


Union Finance Minister Nirmala Sitharaman presented the Union Budget 2022. Take a look at some reactions, views from the clean energy industry.


The Union Budget 2022 lays the groundwork for India’s ambition to be a net zero country by 2070. It is great to see that the government has very firmly put energy transition and clean energy at the heart of India’s economic growth and looks to address some of the most challenging aspects of this transition.


The additional outlay of Rs 19,500 crore for solar manufacturing will help the renewable industry expand rapidly. We expect IREDA, which has been capitalized recently, to move fast and issue letters of award to companies that have bid under the PLI scheme. The revocation of anti-dumping duty on steel will reduce the cost of modules considerably and ties in well with incentives for locally incorporated manufacturing entities, which can now commence manufacturing by March 31, 2024. This is welcome.

Further, the inclusion of grid storage and dense charging into the harmonized list of infrastructure will help mobility start-ups and IPPs to explore low-cost financing. The fact that states will be allowed a 4% deficit of which 0.5% continues to be reserved for power sector rooms, is a bold move. Further, states now have access to Rs. 1 lakh crore additional capital to catalyse investments in clean energy.

Sovereign green bonds are also very welcome, which can help mobilize financial resources for distribution companies as well as for clean energy investors.

With this climate-friendly budget, we look forward with more enthusiasm to work with the government in realizing the net zero ambition.

Sumant Sinha, Chairman and CEO, ReNew Power

The Budget lays roadmap for Atmanirbhar Bharat. It is a remarkable growth oriented budget with focus on capex expenditure. The union budget 2022-23 is truly transformative one as it is firing on all cylinders within its ambit to mark yet another attempt by the government to resuscitate a pandemic-ravaged economy.

The enhanced capital outlay of Rs 35.4 per cent to Rs 7.50 Lakh crore in 2022-23 augurs well for the economy as even inflation is under check at this point.

The bold measures in the union budget encompassed almost all critical sectors of the economy, including green energy, which is expected to galvanize the recovery process which has been set into motion by this government.

It is gladdening to notice that government has maintained continuity in its policies of enhancing ease of doing business, taxation and increase private investments

“This was a very crucial budget post pandemic and it will go a long way in stimulating the economy. I congratulate the government for coming out with such a growth oriented budget in challenging times with focus capex expenditure. This is a landmark budget for prioritizing renewable energy in line with our commitments at COP26.

There is good support to domestic manufacturing aligned strongly to building an Aatmanirbhar Bharat.

I especially applaud the green bonds announcement as this will bring about the much needed investment in Green Energy projects. Battery swapping and support for distributed renewable energy projects are also critical announcements which can change the course of our energy roadmap.

Overall, this is a budget that we should all welcome with enthusiasm.”

“There are some areas where we could do better. Firstly, we really need to understand that renewable energy can catalize the revival of the economy but the main constraint is that there is no GST on power sales to complete the pass-through mechanism. The government really needs to look at this.

Secondly, to accelerate the transition to a carbon neutral economy and to reduce the exorbitant costs of oil imports, we must have incentives in place for generation of green fuels. This is a critical missing aspect so far.”

Tulsi Tanti, Founder and Chairman, Suzlon Group

We sincerely thank the Finance Minister for unfolding another growth oriented budget which will drive the economy to high sustainable growth.

The Budget 2022-23 also has a focus on transitioning to clean energy and helping India meet its climate action goals.

There is a specific focus on growth of infrastructure sector and higher allocation to Capital Expenditure in the budget-which will result in an all round growth.

Reinforcing the need that India should continue to lead it’s green energy renewable drive, allocation of Rs.19,500 Crs of additional funds for PLI for domestic module manufacturing is a welcome step. Extending it beyond Modules to the complete solar value chain is the need of the hour and has been well recognised in the budget. This will go a long way in ensuring that India becomes self-sufficient in this critical field in near future and will play a key role in ensuring that the sector is capable of providing green energy at highly competitive rates to the society in the long run.

Raising or issuance of sovereign green bonds for promoting green infrastructure in the company is welcome news and should further drive the growth of the renewable industry in coming years.

Making grid stage battery solutions as part of Infrastructure projects will give further impetus to seamless integration of renewable generation and distribution systems with improved grid stability.

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The industry was expecting a rollback on GST on renewable projects to the old rates and also some relief/ delay on the custom hike on cells and modules but there is no change in this and hence a little unexpected.

SK Gupta, Executive Director & CFO, Amp Energy India

The budget announcements have been fairly progressive, laying out the framework for the emerging requirements of the energy sector. The policy announcements in the energy storage sector like battery swapping framework, battery as a service, and storage being part of the infrastructure will surely help get the right traction to this essential component of the green energy ecosystem.

The government has also further pushed the agenda of Make in India with PLI enhancement of Rs.19500 Cr for solar module manufacturing, and we should expect more companies to benefit from this. Similarly, other forward-looking measures like biomass palletisation, energy efficiency, and coal gasification will help in reducing our fossil fuel dependence.

The government proposal to raise funding from sovereign green bonds is a well-timed one that can help in reducing the cost of borrowings. Similarly, allowing states to have an additional 0.5% fiscal deficit to power sector reforms will go a long way in strengthening the ailing distribution sector.

Sanjeev Aggarwal (Managing Director & CEO, Amplus Solar)

As an industry, we welcome the inclusion of ‘Climate action’ as one of the key pillars of the budget. Several important announcements such as an additional allocation of Rs. 19,500 crore for the PLI scheme for module manufacturing, sovereign green bonds for funding solar projects, and a robust battery swapping policy will pave the way for reaching the target of 500 Gigawatts (GW) of non
fossil energy capacity by 2030 and achieving net-zero by 2070.

Additionally, the move to provide infrastructure status to data centre and energy storage system will help facilitate cheaper credit for digital infrastructure and clean energy storage.

As an industry we support indigenous manufacture of solar modules. The clarity on import duty on solar cells and modules will help the local manufacturing capacity ramp up to meet both Indian and global demand for solar modules. While the higher duty will increase the cost of setting up solar plants, we believe long-term it would be a net positive for Indian industry and Developers.

Adarsh Das, Co-Founder and Chief Executive Officer, SunSource Energy

“This Union Budget 2022 promises a lot towards a green economy and announcements made related to battery swapping or its storage, are the steps in a positive direction. The Finance Minister’s decision to allocate 19,500 crores to boost the manufacturing of Solar Modules under the PLI Scheme is an encouraging step to incentivize local manufacturing. To attain 280 GW of installed solar capacity by 2030 is an ambitious goal and to fulfill promises made by Hon’ble Prime Minister at COP26 this initiative is a big step in that direction. Another interesting announcement was the financial support for setting up Distributed Renewable Energy projects in border villages, which will help in their electrification. The announcement of green bonds was another welcome step. Overall, while the budget definitely pushes the envelope in the direction of a more sustainable economy, we will have to wait and watch out for the implementation and appropriate policies to enable the change.”

Gagan Vermani, Founder & CEO – MYSUN

It’s a reasonably balanced budget not influenced by the upcoming Elections. The Higher allocation for government capex is a good news. While high level emphasis on clean energy was very encouraging but no major announcement, except the PLI scheme which benefits only solar manufacturers and nothing much for Renewable energy developers. Direction for simplifying tax litigation is a good sign, though need to see it’s fine print and how it gets implemented. Also, there was no major change in direct tax.

“The basic customs duty (BCD) on imported solar modules will be increased to 40% effective from 1st April 2022, as per the fine print in the budget. While this was half expected but with the current domestic manufacturing capacity inadequate to serve the nations clean energy ambitions, these duties will eventually lead to increase in solar tarffis and hamper growth of new installation in India”.

Nikunj Ghodawat, CFO, CleanMax

“The announcement of the Finance Minister to issue sovereign green bonds to mobilize resources required for green infrastructure will certainly help boost the financing of clean energy projects, thereby providing an impetus to the Indian energy sector. With Approved Module Manufacturer List becoming applicable from April 2022, the allocation of an additional INR 19,500 crore under PLI scheme for solar would help create much needed manufacturing ecosystem. The enhanced focus on electric mobility is showcasing the clear desire to mainstream this emerging industry. Overall, the budget is giving clear direction for India to meet its COP26 commitments by 2030.”

Manish Chourasia, Managing Director, Tata Cleantech Capital Limited.

The Indian renewable energy industry, notably the solar sector, must applaud the Indian government’s efforts to promote green energy during the last decade, especially during the pandemic. The appropriations in the most recent budget strongly emphasize renewable energy, energy efficiency, electric mobility, data centers, building efficiency, grid-connected energy storage, and green bond assistance, which is a terrific development. Following India’s broader global commitment to fighting climate change, the 2022 budget emphasizes allowing energy transition through provisions to boost local manufacturing of solar power equipment and batteries. The basic customs duty (BCD) of 25% has been imposed on imported solar cells and 40% has been imposed on solar modules by the Ministry of New and Renewable Energy (MNRE) recently which will be effective from 1st April, 2022. This will discourage Chinese imports of solar panels and solar cells to a great extent, giving further boost to the ‘Make in India’ mission of the Government of India.

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It’s a wonderful move as the risks of climate change are the strongest negative externalities that affect India and other countries. As the Hon’ble Prime Minister said at the COP26 summit in Glasgow last November, “what is needed today is mindful and deliberate utilization, instead of mindless and destructive consumption.” The low carbon development strategy as enunciated in the ‘panchamrit’ that he announced is an important reflection of our government’s strong commitment towards sustainable development.

In addition, To facilitate domestic manufacturing for the ambitious goal of 280 GW of installed solar capacity by 2030, an additional allocation of ` 19,500 crore for Production Linked Incentive for manufacture of high efficiency modules, with priority to fully integrated manufacturing units from polysilicon to solar PV modules, will be made. This initiative is expected to produce 60 lakh new employment and an extra 30 lakh crore jobs over the following five years, which is recommendable.

Gautam Mohanka, MD, Gautam Solar

“The infusion of INR 19,500 crore for Production Linked Incentive is welcome to make country ‘Atmanirbhar’ instead should be spread across any Renewable Energy manufacturing product dependent on imports and not centric to Solar PV value chain. This will ensure more job opportunities and more prospects for start-ups. For example India imports annually over 60 lakh evacuated tubes used in Solar Water Heating system.”

Jaideep N. Malaviya, Managing Director – Malaviya Solar Energy Consultancy
Director – International Solar Energy Society

It is good to see inclusive development, energy transition, and climate action as budget priorities, which are the basis of CSTEP’s mission and its focus areas of work. This shows the commitment towards our pledge at the Paris and Glasgow COP summits.

The decision to issue sovereign green bonds to mobilise investment in green infrastructure while at the same time allowing states to spend on power sector reforms will go a long way in assisting our energy transition. Production-linked incentives for solar modules will provide a much-needed boost to domestic manufacturing.

The focus on connecting India, especially fibre broadband for villages (BharatNet), will decentralise our energy needs, reducing the strain on our urban areas, thus making India more resilient and possibly greener in the long term.

Dr Jai Asundi, Executive Director, CSTEP

“The sheer inclusion of Renewable Energy (RE) and cleantech in the Budget 2022-23 speech by the hon’able FM is a clear indicator of the increased prominence that the RE segment has had in the last few years! The sector has grown by leaps and bounds, thus establishing a formidable position.

The focus on EV and Energy Storage Solutions (ESS) is clearly the need of the hour. The introduction of battery swapping initiative is in line with our expectation for a while. Interoperability of energy storage is going to revolutionise the consumption of RE in India. It is not only going to improve logistics for EV users, but also create a micro-economy – that will create budding entrepreneurs in the segment.

Moreover, the hon’able FM has granted Energy Storage Solution (ESS) and grid scale battery system an ‘infrastructure’ status, which has been done largely to boost demand. This move is bound to attract better financing options for the said segment, increase scalability, which in-turn will eradicate the barrier of DISCOMs not opting for RE power on account of intermittent supply.

On the accountability front, I truly hope that the forward-looking move by the Central govt ministry to introduce end-to-end online e-Billing system is trickled down and implemented at central agencies such as SECI and IREDA. This will better the payment cycles and improve the financial standing of the power generation companies”

Animesh.A.Damani, Managing Partner, Artha Energy Resources

“The budget for the year 2022-23 has provided a promising start for a greener and cleaner future of our economy. Sovereign Green bonds for mobilising resources for green infrastructure will definitely add value in reducing the carbon intensity of the economy. It would have been an icing on the cake if the budget allocation in the clean energy sector would somehow be directly linked with livelihood generation at the local level. Announcement of Vibrant Village Programme and inclusion of decentralised renewable energy resources for villages located on the northern border is also a welcoming step. There is not much for the traditional textile industry. However, the budget incentivises textile exports by exempting various embellishments which might help bonafide exporters indirectly working with traditional crafts.”

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Abhishek Pathak, Founder & CEO, Greenwear

The key decisions made on the renewable energy front illustrated in the Union Budget 2022 precisely addresses the most critical challenges halting India’s speedy transition to a clean new era. The allocation of additional Rs 19,500 cr to the Production Linked Incentive (PLI) for the development of high-efficiency solar modules, thoughtful policies & action plans, supporting incentives for green bonds would not only accelerate our pace to achieve the 2030 target of 280 GW of installed solar capacity but would also help deliver on the 2070 net-zero emissions target commitment made by PM Narendra Modi at the COP26 summit held last year in Glasgow and play a pivotal role in tackling the global crisis of climate change.

Raman Bhatia, Founder & Managing Director, Servotech Power Systems Limited

To provide a boost to the domestic manufacturing, under the PLI Scheme, additional allocation of Rs 19,500 crore has been made for manufacturing of high-efficiency modules with priority to fully integrate manufacturing units to solar PV modules. This will facilitate domestic manufacturing for ambitious goal of 280 GW of installed solar capacity by 2030. It is highly inspiring that the a high-level panel will be set up for urban planning, modern building by-laws will be introduced, use of public transport in urban areas will be promoted and battery swapping policy to allow EV charging stations for automobiles will be framed.

Pradeep Multani, President, PHD Chamber of Commerce and Industry

“I am happy to see this year’s Union Budget laying down a blue print for sustainable development in the future. We applaud the Govt. for its consistent commitment and sharp focus on the important priorities of improving climate change and accelerating energy transition. The suggested framework around Gati Shakti (infrastructure development) and inclusive development will lay a good foundation for long-term infrastructure with an eye on short term economic and job growth. We also welcome the actions on national Digital Health mission.

The launch of the sovereign green bonds is an evidence of the Government’s active support to ‘Green’ which will significantly help reduce the carbon intensity in the years to come. For India to achieve its climate goals, financing is the need of the hour. This will require deep public-private partnerships. We at GE, have been investing in sustainable technologies for decades. We welcome the encouragement to private industry for taking up the design and development of military platforms and equipment in collaboration with DRDO. We are committed to bringing those technologies in the areas of sustainable aviation, green hydrogen, emission controls and decarbonization to India to support the country’s goals.”

Mahesh Palashikar, President, GE South Asia

“We are encouraged with this climate-friendly budget and happy to work with the Government in achieving the goal to be net-zero by 2070. The aggressive allocation of 19,500cr for Production Linked Incentive (PLI) is a huge boost for players who are in the segment of product development for harnessing solar energy. We are glad to see the focus and support from the government for the domestic manufacturing of solar products. This can help build India as an exporting nation. This move will further enable the private sectors to come up with sustainable and innovative products that can bring the last mile connectivity and improve the efficiency in the EV ecosystem. The budget also announced that Sovereign green bonds will be issued for mobilizing resources for green infrastructure. These bonds are an important source for funding carbon-neutral projects. Availability of funds would be a key driver to help India accomplish its net-zero ambition.”

Rahul Kale, Founder, and CEO, Sunpower Renewables

“Budget 2022 has laid a strong emphasis on promoting digital and technological innovations across sectors. The three identified focus areas of technology led development, energy transition and climate action will create a conducive environment for deep tech innovators operating at the intersection of technology and energy to flourish in the country. An allocation of Rs 19,500 crores towards solar energy PLI schemes will spur large-scale demand for the next level of stationary-energy-storage capacities. This will unravel an entirely new ecosystem comprising of battery technology innovators, energy storage platforms, as well as manufacturers and service providers across the energy value chain. At Offgrid Energy, we are particularly excited at prospects unfolding for deep tech companies in the energy storage space.”

Tejas Kusurkar, Co-founder and CEO, Offgrid Energy Labs

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