Solar energy has suffered a lack of attention, although in recent years it is receiving its fair share of the limelight. However, it is a matter of pride that India’s Union Budget for the year 2021 has shed light directly on Solar Energy and major Renewable Energy applications.
When it comes to environmental consciousness and the urgent need for decarbonisation, Budget 2021 has made it clear that the Indian Government is all for demonstrating its unwavering commitment.
This year’s budget is set to be friendly for solar manufacturers as the finance ministry has laid down a much-needed raise in custom duty for solar lantern and inverter sellers. Renewable energy was expectant of a balanced allocation for the Union Budget 2021 and that has exactly been the outcome.
A quick look at the various solar energy projects in India:
Solar energy projects in India have taken on different forms to tackle multiple renewable energy needs. Here are all the solar projects that will benefit from this year’s budget:
- Rooftop solar projects: Rooftop power stations and home set ups.
- Ground-mounted projects: Field based solar power plants.
- Distributed renewable energy projects: Solar projects that directly fulfil livelihoods like solar mini-grids, solar cold-storage, solar charkhas, and more.
This year, the Indian government is actively working towards offering benefits to the renewable energy industry, as per our Finance Minister’s budget declaration.
Which solar devices will receive a duty hike, and how much?
Two specific solar energy devices will obtain a custom duty hike of 300% and 200%, as follows:
- Solar inverters – Custom duty will be raised from 5% to 20%.
- Solar lanterns – Custom duty will be raised from 5% to 15%.
To build up domestic capacity, the government will notify a phased manufacturing plan for solar cells and solar panels. The #Budget2021 also proposes to raise duty on solar invertors from 5% to 20%, and on solar lanterns from 5% to 15%.@RajKSinghIndia— Ministry of Renewable Energy (MNRE) (@mnreindia) February 1, 2021
India’s dream of Aatmanirbharta:
The Indian Government’s goal of realising a self-reliant manufacturing dream for India has very much taken shape in this year’s budget especially regarding solar energy. The Finance Minister stressed on the government’s efforts to improve domestic manufacturing.
- Raise in custom duty will bolster solar manufacturing within the country.
- It is a crucial step forward under the ‘Atmanirbhar Bharath’ mission.
- Strengthened manufacturing efforts will lead to progress in solar energy supply to fulfil global demand.
- Phased Solar cells and panels manufacturing will receive a giant push for accelerating the process.
Solar Energy capital:
This year, there is specific capital allotment for the solar energy sector which is being hailed as a welcome move by renewable energy bodies.
- The Solar Energy Corporation of India (SECI) and the Indian Renewable Energy Development Agency (IREDA) will receive funding this year from the government.
- This will be followed by an added capital infusion of Rupees 1000 and Rupees 1500 crore to SECI and IREDA respectively.
To give a further boost to the non-conventional energy sector, #Budget2021 proposes provide additional capital infusion of `1,000 crores to Solar Energy Corporation of India and `1,500 crores to Indian Renewable Energy Development Agency.— Ministry of Renewable Energy (MNRE) (@mnreindia) February 1, 2021
In light of developing renewable energy, India has grand plans to make 100GW solar production of solar energy a reality by 2022. However, to make this possible, India will require investments leading up to Rupees 1.75 Lakh Crore. 37GW of Solar Energy have already been set up.