Union Budget 2023-24: Pre-Budget Expectation Quotes From Clean Energy Industry Experts

Union Budget 2023-24 : Here's What The Experts Say

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Finance Minister Nirmala Sitharaman will present the Union Budget 2023-24 in Parliament on February 1, 2023. RE sector has high expectations from financial budget this year. It is expected to reflect India’s climate commitments under COP26/COP27, with decarbonization and energy transitioning as the central themes.


Here’s what our industry experts have to say:


“We look for the 2023-24 Union Budget to prioritize decarbonization, accelerate energy transition towards RE and development of a manufacturing and support ecosystem to enable this transition.

In order to meet our RE goals by 2030 and truly compete with regions like US, China and the Middle East on emerging technologies like Green Hydrogen which are aided by access to low-cost capital and extremely favorable Tax and Duty regimes in those countries, the GoI must provide some immediate relief to counter significant cost and schedule disruptions in the wake of the implementation of BCD and ALMM and the global supply chain disruptions. One area would be in the form of deferment of BCD implementation on solar modules and cells, till such time sufficient domestic manufacturing capacity is operationalized to fulfil the annual demand estimated to reach the 2030 targets. Also, parallel measures to reduce the incidence of domestic solar module manufacturers exporting a large portion of their production, leaving the domestic Industry without viable alternatives. Another area here would be to ensure access to low-cost capital for RE, BESS and Green Hydrogen project development, in line with most other RE focused regions and economies across the globe. Additionally, measures like rationalization of GST on Solar Power Generating Systems and the O&M of wind and solar projects, tax incentives for residential and commercial Rooftop solar consumers, no capital gain tax on sale of land for wind and solar farms and other associated land reforms will bolster the growth and public support for RE and accelerate the country’s green Transition.”

Srivatsan Iyer, Global CEO, Hero Future Energies

“This year’s Union Budget will have a significant impact on how the Renewable Sector growth momentum will be in the coming FY. In the last couple of years; the government has rolled out several policies that were crucial for the growth and adoption of clean energy in the country. The Indian Manufacturers are keenly looking forward to stability, alignment and consistency in these policies, which will eventually encourage much-needed technology innovation and scale up the production capacity to meet the PM’s Vision of ‘Make In India’. Additionally, incentive policies to promote solar exports will help India increase its share in the booming global solar markets.”

Bharat Bhut, Co-Founder & Director of Goldi Solar

“India has a large PF corpus of 17lakh+ crores in EPFO. Budget 2023 should focus on mobilising a portion of this corpus as debt or equity in greenfield infra projects. This will bring better returns to pensioners, and home-grown abundant capital to project developers.

In the world of energy, policy push makes a big difference. Therefore, we hope to see an additional emphasis and budgetary support to promote new areas of energy, like offshore wind and grid balancing solutions including hydro.”

Pratik Agarwal, Managing Director, Sterlite Power, and Director of Serentica Renewables

“In the last Budget, Government’s main objectives were to boost domestic manufacturing of Solar PV modules and cells to reduce the dependence on Chinese suppliers and provide financial muscle to central PSU’s. INR 4,500 crore was allocated in last year’s budget for manufacturing of ‘High Efficiency Solar PV Modules’, to be implemented through MNRE. The scheme received an encouraging response. Thus, there was a proposal to enhance funding under the PLI scheme to INR 24,000 crore. Once implemented, it will boost Indian manufacturing with 54 GW manufacturing capacity from the current 12 GW under setup by the eligible four winners of the first PLI bid. In order to achieve the targets set for the sector, module manufacturers should pace up production to meet demand and to avoid dependency on foreign module manufacturers. Apart from this, there are areas where quick, committed and targeted actions need to be taken to achieve the commitment of 100 GW by 2022 – evacuation and transmission infra, grid stability and grid integration, investment in smart grids, green corridor, land availability and domestic manufacturing need to be the focus areas.”

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Shilpa Urhekar, India National Head – Solar EPC, Sterling and Wilson Renewable Energy

It is expected from budget 2022 that the Solar Industry will boom with a potential investment of over USD 15 billion. As the government concentrates on electric cars, green hydrogen, manufacturing solar equipment, and meeting the ambitious 175GW renewable capacity target, the solar industry is predicted to expand in 2022. In my opinion, the Union Budget for 2022-2023 should include tax breaks and credit guarantees to encourage technology adoption in the solar power industry. Also, installing a solar system is a considerable investment, and not everyone can afford it. Well, to relax in this issue, it is also anticipated that a credit guarantee programme will be established to reduce the risk for consumers with poor credit scores. As a result, such customers will get bank funding for rooftop solar installations.

Gautam Mohanka, MD, Gautam Solar

“In 2022, the government released a dedicated policy framework to promote Decentralised Renewable Energy applications for livelihoods. We hope that this significant example of pursuing the trifecta of jobs, growth, and sustainability, would find fiscal allocations in the upcoming budget to start realizing the vision of the policy framework.”

Abhishek Jain-Fellow & Director- Powering Livelihoods, Council on Energy, Environment and Water (CEEW)

Energy production and its sustainability are the two major issues of recent times. India has the potential to become ‘the green sparrow’ of the world and offer quick, affordable renewable energy solutions if we put our act together.

The government has shown its commitment for mainstreaming renewable energy by introducing policies such as Production-Linked Incentive Scheme-II (PLI-II). However, when we are talking about developing close to 100GW of solar manufacturing capacity by 2030, we need a much more conducive environment.

Domestic content requirement needs to, essentially, be made compulsory for subsidised as well as non-subsidised projects. This will immediately shoot up our growth trajectory. In the Union Budget 2023, the Government can think about centralising solar installation policies which will boost installed renewable energy capacity, in order to achieve the goal of 500GW installed capacity by 2030.

Deepak Jain, President of Grew Energy Pvt. Ltd.

I strongly believe that Indian government will prioritize the policies that can benefit the infrastructure, manufacturing sector and promote renewable energy allowing the country to realize its potential on a global scale. Manufacturing investments must be encouraged among technology providers to bring self-reliant solutions in the country. Development of new-age manufacturing skills across the top and bottom of the pyramid must be enlightened which can be a game changer for further skill development.

The overall expectation from the union budget is that it brings a steady growth for the present and future of the country.

Rajeev Sharma, Chief Strategy Officer, Mitsubishi Electric India Pvt. Ltd.


Taxes on bio fuels should be brought to nil. This is an important step for rapid increase in production of bio fuels and is also needed for energy security.

Import duty on electrolysers i.e. PEM / Alkaline /AEM /Solid state should be brought to nil. This single step will attract huge investment in Green Hydrogen. This will make India export hub by 2030. There is no revenue loss, as Green Hydrogen is not being produced in the country, till date.

GST is a fiscal tool. Zero GST should be introduced, on Green Cement and Green Steel.

All lending decisions/ terms of the Loans / Investments by Banks and NBFCs should be linked with ESG score.

All Government subsidies / grants should also be linked with ESG scores

To tackle the air pollution in North India, the Government should consider incentivizing the purchase and provision of Bio Decomposer Capsules and other equipment by the corporate sector since the small and marginal farmers may not be able to afford such innovative solutions. Expenditure on R&D for finding a solution to paddy burning could also be incentivized by allowing accelerated deduction


PHDCCI recommends bringing PLI scheme for wind turbine generators and equipment manufacturing in line with the solar PLI scheme. This will bring in technological advancement in the wind energy sector and also promote indigenization.

Provide suitable tax benefits for R&D in the development and advancement in the solar equipment and wind turbine and generation technologies in the country.

Government should bring back regulator-determined tariff instead of competitive bidding-based tariff. Capacity additions have been minimal ever since the introduction of reverse auctions-based determination of tariffs even though the current targets are much bigger. To bring interest of all stake holders such as OEMs, developers, lenders and investors back to the sector and enable large capacity additions in a short span of time, it is important to have tariffs that are remunerative enough for them all.

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Payment security mechanism to be set up for energy sold to DISCOMs. Payment within a cycle of 3 months needs to be ensured to make the new projects viable and encourage further investments with cash flows which otherwise remain stuck for up to 12-18 months in the hands of DISCOMs.

Battery swapping was a welcome move in the last budget. However, Battery Energy Storage Systems (BESS) are still not a commercially viable option to add to a hybrid park such that the generation can be further streamlined and capacity utilization factor (CUF) improved for the stability of the grid and benefit to utilities. It is proposed that a fund should be created to support the addition of BESS until it can become commercially viable on its own.

Duty benefit on certain key components: MNRE is withdrawing custom duty benefit of 2.50%, from 1st April 2023, that is granted on some of the key components. This will be a loss to the industry. PHDCCI suggests that Budget introduces unconditional duty rebate of 2.50% on key components, which are specific to a particular turbine and cannot be sold in the open market. This rebate should be at custom level only and should not need MNRE approval every a consignment is received. Approval can be given for a particular model on annual basis.

Development of hybrid parks should be given priority and policy regime at centre and state levels should encourage existing wind farms to hybridize with the addition of suitable solar capacities and vice versa. This will help optimal utilization of transmission infrastructure, streamline the generation and improve the capacity utilization factor (CUF).

PHD Chamber of Commerce and Industry

“In the upcoming Union Budget, we look forward to the Government announcing stimulus packages for Green projects, especially enabling first loss default guarantees. This would help the first time green bond issuers who may be unable to service the coupon or principal payments and would surely go a long way in inspiring the dairy industry to consider and access more green debt capital, as well as to execute high-quality genuine projects that get the dairy value chain closer to Net-zero.”

Vasanth Madhav Kamath Founder & CEO of Hydrogreens Agri Solutions

“I expect the budget to lay down a 5-year plan to increase participation/usage of renewable energy resources by decentralized small industries and craft sector. The government should ensure growth in procurement from start-ups working with renewable energy resources. The textile industry alone has the potential to reduce carbon footprint by a huge margin along with creating jobs at the local level. The textile and Fashion industry needs urgent reforms in order to reduce polluting earth. We are taking one step at a time and currently are very small against the problem. However, we believe that the solar-vastra value chain if added with natural fibers and organic processes will create immense impact in reducing carbon footprint from the textile industry. If only 5% of Indian villages become solar charkha clusters (around 30,000), it can produce 180 Cr kgs cotton yarn which is almost 50% of India’s current cotton yarn capacity, and generate livelihood for 1.2 Cr people without migrating from their villages.”

Abhishek Pathak, Founder & CEO, Greenwear

  1. Delay in implementation of BCD on Solar Modules and cells from 1st April 2022: The current domestic manufacturing capacity is woefully inadequate to meet the current and future demands of Solar Modules. We need to allow our domestic manufacturers time to ramp up their capabilities and enable capacities envisioned under the PLI scheme to come to fruition. A BCD implementation coupled with the recent ALMM order will create a massive shortage of modules in the country apart from increasing prices multi-fold. This could potentially derail the solar targets set for 2030.
  2. Reversal of increase in GST from 5% to 12%: – In September, the GST council had increased the GST applicable on Solar Modules and Inverters to 12%. This has led to an increase in project costs by 5%. Power sale being exempt under GST leads to an inverted duty structure. An increase in GST slabs results in the rise of the Solar Power price
  1. GST on Power Sale: – We recommend that the government introduce GST on the sale of power. The current inverted duty structure in the Power Generation sector is inefficient and leads to a higher landed cost of Power. Introducing GST on the sale of power will not only reduce the cost of Power Generation but also increase government tax collections
  2. Credit guarantee scheme for the roof-top sector: – The roof-top sector has been a laggard in the growth of solar energy. This sector has lagged as banks are unwilling to lend smaller ticket size loans to the sector. A credit guarantee scheme should assist in the higher off-take of roof-top solar.
  1. Capital Subsidy for Hybrid Inverters and Storage devices: – The current cost of Hybrid inverters and storage devices is exceptionally high. The high cost is a deterrent in the off-take of such systems. To boost the penetration of roof-top solar and resolve the continuous conflict with net-metering policies, it would be beneficial to provide capital subsidy for Hybrid inverters and storage devices. This will encourage consumers to set- up roof-top solar plants with storage devices. Moreover, this would create domestic demand for storage devices and provide a flip-up to domestic manufacturers.
  2. PLI Scheme for Manufacturing of Hybrid Inverters and Storage Devices: – The government should provide a PLI scheme for boosting the production of Storage devices and Hybrid inverters in the country. The increased use of such devices will increase penetration of roof-top solar and better grid stability.
  3. Capital Subsidy for Re-powering of Old Wind Turbines: – Many old wind turbines are currently occupying some of the best wind sites in India. This is a waste of natural resources in the country. In the absence of a lucrative re-powering policy that supports old turbines being scrapped for new ones, a capital subsidy, and a lucrative tariff policy on the lines of the ‘Generation Based Incentive Scheme’ supported through IREDA is required to get re-powering of Wind Turbines in India.
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Animesh Damani, Managing Partner, Artha Energy Resources

We are hoping that the Union Budget 2022-23 will set us on a path to recovery beginning this year. To address issues such as fiscal policies, environmental pollution, and the promotion of renewable energy, strong and supportive actions are required. A return of consumer confidence in renewable energy sources, improved financial market conditions, and an increase in manufacturing and export activities in the country would be crucial.

As per recent speculations, it is also expected that the upcoming budget will provide more clarity on tenure of Basic Custom Duty (BCD) on import of Solar PV cells and module. Expansion of the production-linked incentive (PLI) scheme to boost domestic manufacturing significantly. Additionally, we expect the government to provide financial incentives for the rapid growth of producing Green Hydrogen and making India as a Global manufacturing hub for Electrolyser to generate green hydrogen.

Manoj Gupta, VP-Solar and Waste to Energy Business, Fortum India

“The industry expects that the upcoming budget will introduce a Production Linked Incentive (PLI) programme for wind turbine manufacturers, which will subsequently increase the output of domestic equipment, thereby lowering the cost of installation. The government should consider treating RECs similar to carbon credits and grant favourable tax on income derived from them. Additionally, the government must take steps to bolster India’s renewable energy capacity by bringing down GST rate on sale of wind and solar equipment. With consistent fiscal support, we are positive that the Indian renewable industry can double its renewable power capacity by 2027.”

Inder Bhambra, Country Head, BD and sales, Envision Energy India

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