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Expectations from the Renewable Sector in the Upcoming Union Budget 2024

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Renewable energy in India consists of certain aspects. These include:

  1. India’s population stands at 1.3 billion and it needs massive energy to grow economically.

  2. India has come from being a power deficit country to one with surplus power in the last seven decades

  3. India has a total installed electricity capacity of four lakh megawatts

  4. With its sustainable goals in mind, India is moving towards renewable energy

  5. India is now the world’s third-largest producer of renewable energy.

  6. 40% of the country’s installed electricity capacity is now coming from non-fossil sources

  7. By 2070, India hopes to achieve its vision of Net Zero emissions

Key Expectations from the Upcoming Budget

Some of the expectations that the renewable sector has from the upcoming budget include:

  1. Revising the GST on renewable energy components from 18% to 5% leads to lowering the cost structure for green energy projects

  2. Rationalization of GST on solar equipment like solar panels and components from 13.8% to 5% making solar investments more attractive and affordable

  3. To Increase incentives and subsidies to local solar cells and module manufacturers to decrease dependency on imports and boost domestic production

  4. Under the Pradhan Mantri Suryodaya Yojana, providing 300 units of free electricity to 10 million households through rooftop solar installations

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Potential Impact on the Renewable Sector

Some of the potential impacts the renewable sector can have post the budget 2024 include:

  1. Increase and promote the domestic manufacturing of renewable energy infrastructure.

  2. Encourage the use of energy storage technologies, critical for balancing the intermittency of renewable resources

  3. Open wider doors for technologies like green hydrogen and energy storage systems that last longer

  4. Significant carbon emissions reduction with a budget allocation towards projects promoting it

  5. Better bankability of renewable projects for developers

  6. The increased advantage of having a supply chain that is fully domestic with the Pumped Storage Plants

  7. Adoption of green ammonia in the fertilizer sector and possible integration of green hydrogen in steel production.

Industry Experts' Opinions and Predictions

Some of the industry expert opinions and predictions include:

  • Tariff barriers and fiscal incentives need to continue to help localize technology for manufacturing renewable products 

  • A 5-10% investment of the GDP in clean energy can lead to long-term economic development and an increase in employment, potentially establishing India as a world leader in renewable energy.

  • Budgetary support from tax incentives, R&D grants etc needs to be provided for the development of the sector

  • The expansion of domestic manufacturing capacities in solar and wind energies and batteries also needs to be taken up

Case Studies of Successful Renewable Projects   

Some of the case studies of successful renewable projects include:

  1. Solar Power in Sundarbans: 

    Access to electricity was a challenge

    • Hinders everyday activities 

    • With ample sunlight every day, solar power helps provide electricity here

  2. Wind Energy in Dharnai:

    • A village in Bihar with no electrical grid for three decades

    • Installation of microgrid powered by wind turbines

    • Impacted economic activities and reduced dependence on other sources of electricity

  3. Hydroelectricity in Spiti:

    • Had villages with no power

    • Spiti has fast-flowing rivers and is situated at a high altitude 

    • With hydroelectric projects, Spiti moved from a diesel generator to a more sustained source.

Conclusion 

With the upcoming budget expectations, the renewable sector can:

  1. Expect growth in various spheres like solar and wind energy

  2. The government’s focus is also concentrating on increasing and promoting locally manufactured solar panels and module 

  3. With the experts’ opinions in tow, if the government decides to invest even 5-10% of the country’s GDP, then it could lead to long-term economic growth for the country. 

  4. As a part of the union budget 2024, the government, under the Pradhan Mantri Suryodaya Yojana, is looking to provide 300 units of free electricity to 10 million households through rooftop solar installations

  5. By 2070, India hopes to achieve its vision of Net Zero emissions

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Frequently Asked Questions

How is the government planning to support the renewable energy sector in the new budget?

Answer Field

Some of how the government plans to support the renewable energy sector is by revising the GST on renewable energy components like solar panels, increasing incentives and subsidies to local solar cells and module manufacturers and using the PM Surya Ghar Muft Bijli Yojana, to assist with the installation of up to 3Kilowatt of solar power in households.

What financial incentives are expected for renewable energy projects in the upcoming budget?

Answer Field

Some of the financial incentives include:

  • Revised GST rates on various aspects and products of the renewable sector like solar panels, solar components, etc

  • Increase incentives and subsidies to local solar cells and module manufacturers 

Will there be any new policy reforms to boost investments in the renewable sector?

Answer Field

Experts believe that even a 5-10% investment of the country’s GDP into clean energy will help with India’s economic growth to a great extent.

How will the upcoming budget impact the growth of solar and wind energy in India?

Answer Field

With the upcoming budget, the government is expected to focus on the targeted 50 gigawatts annual bidding for Solar and Wind energy projects till at least 2028. Budgetary allocations for the installation of rooftop solar panels are also expected in the union budget this time.

What are industry experts saying about the potential budget announcements for the renewable sector?

Answer Field

Some of the industry expert opinions state that tariff barriers and fiscal incentives should continue to localize technology for manufacturing renewable products. Tax incentives and R&D grants with help provide budgetary help for the sector’s development. They are also of the opinion that the expansion of domestic manufacturing capacities in solar and wind energies and batteries also needs to be taken up.

How will the new budget affect job creation and economic growth in the renewable energy sector?

Answer Field

With a focus on local manufacturing of solar cells and components as well as solar panels, job creation will increase leading to constant employment. This will also lead to less dependency on imports leading to less spending and a better economically sound system in place.

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