“Transform. Energise. Clean India.” Arun Jaitley just announced a remarkable budget with markets responding quite positively. Purely from a renewable energy perspective, we haven’t seen any major announcements apart from a 20GW phase 2 of the Solar Mission and 7000 railway stations to be covered under the Solar Mission. It is not clear if this 20GW is in addition to the 100GW solar target by 2022 or included in the same. A positive and encouraging news for the domestic solar manufacturers is that solar tempered glass, used in the manufacturing of solar panels has been exempted from the custom duty.
However, three events can have a major impact on the solar sector indirectly. One, there is a huge push on infrastructure spending (almost Rs 4 lac crores allocated). Second, the government seems committed to reignite the real estate sector. The target to build 1 crore new homes should mandate usage of a 1kW solar system per home as each of these homes will need power. That itself will add 10GW rooftop solar. Third, the enhancement of the carry forward duration of MAT from 10 years to 15 years and the rationalization of corporate tax for companies with a turnover less than Rs. 50 cr would lead to increased profits for a lot of small sized solar installers, which could potentially lead to passing on of some of this benefit to the end users effectively reducing solar system prices. The FM also talks about achieving 100% village electrification by May 2018, and a lot of it could be achieved from solar mini grids and other small solar installations. Apart from this, there isn’t much for the renewable industry to cheer about. We would have loved to see the Finance Minister slightly tweak his budget agenda as “Transform India with Clean Energy”.