The world is rapidly moving towards renewable energy. From electric vehicles to solar cells, it is realized that over-reliance on fossil fuels to power economies may not be sustainable in the longer term, making ‘green’ the buzzword. India is also making efforts to reduce its reliance on fossil fuels and boost green energy generation by launching projects to harness the power of wind, sun and water.
When Finance Minister Nirmala Sitharaman presents the Union Budget 2022-23, companies will eagerly look for incentives to move to greener technologies.
Industry body FICCI has requested tax cuts and credit guarantees for companies operating in the renewable energy sector to accelerate technology adoption.
FICCI has said that achieving the goal of turning India into a green economy requires an environment where technology can be rapidly applied to harness renewable energy. It cited China as an example, stating that the country provided free land, discounted electricity and low-interest financing to companies to develop green technologies.
Others, such as Taiwan, Malaysia and Vietnam, have also emerged as centers of solar modules and components with their government’s support, FICCI added.
For tax-related concessions, it called for an extension of the tax rate of 15 percent for companies investing in green technologies, as well as full deductions for investments or purchases of green technology assets. The second suggestion is expected to encourage companies to replace outdated technology with newer and greener options.
Another key recommendation from the industry association is to tap into the residential sector to create rooftop solar. It said formulating a credit guarantee scheme will go a long way in making solar roofs attractive and reducing risk factors. So far, the majority of rooftop solar capacity has come from industrial, commercial and institutional sectors.
Prime Minister Narendra Modi has often emphasized the need to make India a clean and green economy, most recently in his speech to the World Economic Forum. At the World Economic Forum (WEF) Davos Agenda 2022, Prime Minister Modi announced the “P3 (Pro-Planet People) Initiative”, which highlights India’s commitments on climate change.
India is also a world leader in applying solar energy through its flagship International Solar Alliance. The framework of the ISA emphasizes delivering local benefits to all countries through partnerships and innovative financing instruments. The efforts appear to be paying off as electric vehicle sales pick up late last year. Some studies have determined that the EV market in India will reach as much as $206 billion by 2030. But this would also require a total investment of $180 billion in manufacturing and charging infrastructure.
India aims to generate 450 GW of renewable energy by 2030. The last budget focused on expanding domestic production of solar cells and panels and proposed to reduce dependence on imports. The production-related incentive scheme for the production of batteries was an example of this. In addition, the National Hydrogen Mission has been announced to help achieve a sustainable energy mix and support energy storage.