Union Budget 2024-25: Industry Leaders Expect Financial Reforms And GST Cuts To Energize Renewable Sector

As the Union Budget 2024-25 approaches, key players in India’s renewable energy sector have shared their expectations and insights on what they hope to see in the upcoming financial plan. From rooftop solar subsidies to green hydrogen initiatives, industry leaders highlight the essential measures needed to accelerate India’s transition to sustainable energy and achieve ambitious climate goals.

Sharad Pungalia, MD & CEO of Amplus, expressed his hopes for the Union Budget 2024. He urged the government to reduce the tax burden on solar project costs, rationalize GST across the solar sector, and eliminate the Basic Customs Duty on solar modules. Pungalia also called for concessional duties on Battery Energy Storage Systems to advance storage capabilities and ensure a stable energy supply. He stressed the importance of increased credit access for MSMEs through targeted lending and significant budget allocations for evacuation infrastructure to support the growth of the solar sector and the nation’s economic and environmental goals.

Naresh Mansukhani, CEO of Juniper Green Energy, noted the positive trend in budget allotments towards renewable energy in recent years. He highlighted initiatives like the Development of Solar Parks, Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyaan, and PM Surya Ghar Yojna as key efforts to promote sustainability. Mansukhani expressed hope for greater financial support in the upcoming budget, including enhanced subsidies, grants, and low-interest loans for renewable energy projects. He advocated for reducing the current 12% GST on renewable energy devices to lower project costs and support the country’s renewable energy capacity goals.

Saurabh Marda from Freyr Energy emphasized the significance of PM Surya Ghar Yojana in promoting rooftop solar adoption. This initiative, launched by Prime Minister Narendra Modi, provides subsidies covering up to 40% of installation costs and additional financing options, benefiting households in tier 2 and tier 3 markets. The scheme aims to support 1 crore households and contribute to India’s net-zero emissions goal by 2070. Improved integration of DISCOMs with the National portal will expedite the transition to solar. Marda also highlighted the need for incentives for local solar cell manufacturers to meet the rising demand and called for the continuation of subsidy schemes to help the sector scale up and achieve India’s net-zero goals ahead of schedule.

Dhiman Roy, CEO of GreenH Electrolysis Pvt. Ltd., emphasized the Union Budget 2024 as a critical opportunity to advance India’s green hydrogen economy. He suggested lowering GST on solar modules, wind turbines, and electrolyzers, and reducing customs duties on imported solar cells and hydrogen electrolyzer components to reduce project costs. Roy also recommended setting mandatory green hydrogen procurement targets for government entities, regulating the blending of green hydrogen with fossil hydrogen and natural gas, and offering subsidies and tax breaks to industries switching to green hydrogen. Additionally, he called for a simplified regulatory framework for green hydrogen, funding for workforce training, and incentives for production and mandatory usage targets.

Jeetu Bairathi, Partner at BDO India, outlined key expectations for the Budget 2024 in the renewable energy sector. He emphasized the need for increased financing, relaxed regulations, streamlined land acquisition, and resolved right-of-way issues to facilitate project implementation. Bairathi mentioned the PM-Surya Ghar Muft Bijli Yojana and Viability Gap Funding for offshore wind energy as key initiatives. He called for Viability Gap Funding for Battery Energy Storage Systems, capital subsidies for smart grid implementation, and zero import duties on solar cells to reduce costs. Bairathi also noted the automotive sector’s anticipation of FAME-III to promote hybrid and electric vehicles, with potential GST reductions and investments in public charging infrastructure. He highlighted the importance of investment in solar, wind, green hydrogen, and battery storage to achieve India’s target of 500 GW of non-fossil fuel-based energy by 2030 and net-zero goals by 2070.

The Union Budget 2024-25 presents a pivotal moment for India’s renewable energy sector. By addressing the key expectations and recommendations from industry leaders, the government can pave the way for a sustainable future, driving growth and innovation in clean energy. The upcoming budget holds the promise of accelerating India’s transition to renewable energy, supporting economic development, and achieving the nation’s ambitious climate goals.