With sector in trouble, solar players’ hopes singed in Budget

No respite:The Centre has not addressed the financing issues in the solar sector, says Gagan Vermani of MYSUN.Reuters

No respite:The Centre has not addressed the financing issues in the solar sector, says Gagan Vermani of MYSUN.Reuters  

But sops for EV technology have charged the industry up

The energy sector’s reactions to the Interim Budget have been a mixed bag, with solar sector players expressing disappointment that nothing concrete was announced for them at a time when the sector is floundering, and energy storage players welcoming the steps taken to make imports cheaper. Those in the hydrocarbon space welcomed the government’s intent to continue with the push for the Ujjwala Yojana and increasing exploration.

“The budget articulates continued focus on renewable energy, rural electrification and energy efficiency,” Kameswara Rao, leader — energy, utilities and mining at PwC India, said. “This continuity and commitment is the key for a capital-intensive sector and, now with a rapidly growing retail demand, the sector could experience renewed growth.”

“We appreciate the government’s focus on cleaner fuel through the provision of eight crore LPG connections to all rural households,” Nitin Prasad, chairman, Shell Companies in India, said. He also highlighted the policy prescription set by the Budget towards increasing hydrocarbon production and promote biofuels.

The government has allotted Rs. 2,479.9 crore for grid-connected solar power in 2019-20, up from the Rs. 2,157.24 crore in the revised estimates of 2018-19.

Wind energy, however, saw allocation fall to Rs. 720 crore from Rs. 950 crore over the same period. Notably, although there is a budgetary sub-heading for energy storage, no allocations have been made in that category in the last three years.

“India aims to achieve 227 GW of energy from renewable sources and nearly 113 GW through solar power,” Sidhartha Vermani, senior director, Smart Power India, said. “However, achieving this goal is not possible yet. While the government can increase funds to promote renewable energy, such allocations will always be very limited and short of investment targets.”

Rebates on solar loans

“For the second year in a row, solar was a no-show at the 2019 Interim Union Budget, apart from a sole mention about the installed solar generation capacity addition in the past five years,” Gagan Vermani, CEO & Founder, Mysun said. “While prices for solar have continued to drop over the last year, it’s the lack of financing for solar projects that have hit the industry hard. And this year’s Budget has missed addressing that yet again. We have been demanding solar loans to be treated like home loans, as an instrument for individuals to claim a tax rebate,” he added. “But it seems like the industry will have to wait for that.”

While the electric vehicles sector found mention in the Budget speech in terms of intent, it stood distinct in that customs duties for imported parts were slashed two days before the Budget.

“Announcements of tax rebates on import of electric vehicles technology, including batteries and motors ranging from 10-25%, and incentives for local battery manufacturing will speed up the EV revolution,” said Rahul Walawalkar, president, India Energy Storage Alliance.

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