New Delhi: As India gears up for the Union Budget FY25-26, the renewable energy sector stands at a critical juncture, with experts across industries highlighting their expectations for increased allocations, policy measures and support mechanisms to accelerate India’s transition to clean energy.
The renewable energy allocation in the 2024-25 budget witnessed a sharp increase to Rs 19,100 crore from the previous year’s revised estimate of Rs 7,848 crore, signifying the government’s commitment to sustainability.
Enhanced Focus on Renewable Energy Development
Industry leaders now call for further measures to address challenges and capitalize on opportunities in renewable energy.
Vikram V., Vice President & Co-Group Head of Corporate Ratings at ICRA Limited, emphasized the urgent need to expand energy storage capabilities. He stated: “Fast-tracking battery storage and pumped hydro storage projects is critical. Policy measures incentivizing grid-scale battery manufacturing and backward integration in module production will be essential.”
“Budgetary allocation for transmission infrastructure and scaling smart metering must also be prioritized to enhance operating efficiencies of state distribution utilities,” he said.
Production Linked Incentive Schemes and Domestic Manufacturing
Shekhar Singal, Managing Director of Eastman Auto and Power Ltd., highlighted the impressive adoption of solar energy through initiatives like the Muft Bijli Yojana, which achieved over 6 lakh solar installations in nine months.
“With a focus on enhancing PLI schemes for solar components, India can reduce its reliance on imports, drive innovation, and become globally competitive. This momentum will ensure India surpasses its 500 GW non-fossil fuel capacity target by 2030,” he noted.
The 2024-25 budget introduced Rs 6,250 crore for the PM Surya Ghar Muft Bijli Yojana, underscoring the government’s focus on solar energy. For 2025-26, experts expect further expansion of the PLI scheme to cover upstream materials like polysilicon and wafers, strengthening India’s solar value chain.
Green Hydrogen and Carbon Credit Trading
India’s National Green Hydrogen Mission, allocated Rs 600 crore in 2024-25, is poised to scale up with expectations of enhanced financial support for pilot projects and incentives for electrolyzer manufacturing.
Hemant Sahai, Founding Partner at HSA Advocates, remarked, “India can position itself as a global exporter of green hydrogen derivatives like ammonia and ethanol. This transition requires increased budgetary support for hydrogen hubs and pilot projects.”
Shri Venkatesh, Managing Partner at SKV Law Offices, pointed to NTPC Green Energy Limited’s ambitious Rs 80,000 crore investment plan in Maharashtra, encompassing green hydrogen, ammonia, and methanol projects, alongside 5 GW renewable energy development. These initiatives align with India’s climate strategy, including the Carbon Credit Trading Scheme (CCTS), set to launch in FY 2026.
Addressing Diversification and Regulation
Saurav Agrawal, Advocate at the Delhi High Court, called for a new regulator for the renewable energy sector. “Balancing between renewable and non-renewable sources is crucial. Specific interventions are required for each renewable source to ensure sustainable growth,” he said.
Parul Kashyap, Founder & Partner at SunLegal, added, “India’s dependency on China for solar components, such as modules and polysilicon, must be reduced. Expanding domestic manufacturing through schemes like PLI will be critical to achieving the 500 GW renewable energy target by 2030.”
Strengthening Energy Storage and Transmission
The Green Energy Corridor project, which received Rs 600 crore in 2024-25, is expected to see further allocations to enhance transmission infrastructure.
Hemant Sahai emphasised the need for fiscal support for advanced storage technologies, such as lithium-ion systems, to integrate renewable energy with grid stability.
Santosh Janakiram, Senior Partner at Cyril Amarchand Mangaldas, stated: “A stabilized grid requires integrating sufficient energy storage. Expanding the PLI for battery storage will incentivize investment and localize the supply chain.”
Decentralised Renewable Energy and Waste-to-Energy Projects
Experts have also highlighted the need for enhanced investments in decentralized renewable energy programs, such as rooftop solar schemes and waste-to-energy (WTE) projects.
“Import duty concessions for WTE technologies can lower costs and increase adoption,” Sahai said, advocating for policies to ensure mandatory purchase agreements for discoms.
Aligning EV Policies with Renewable Energy
Alay Razvi, Managing Partner at Accord Juris, suggested integrating EV policies with renewable energy initiatives.
“Incentivizing solar-powered EV charging infrastructure can create a robust clean energy ecosystem. The budget must provide fiscal support for battery manufacturing to complement this integration,” he remarked.
Transformative Path Ahead
With India adding 24.5 GW of solar and 3.4 GW of wind capacity in 2024, the sector looks to maintain its momentum. The budget 2025-26 is expected to continue supporting emerging areas like offshore wind projects and green ammonia production.
As the nation transitions to a sustainable future, the upcoming budget for FY25-26 holds the potential to shape India’s clean energy landscape while bolstering economic growth and environmental sustainability.
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