Union Budget 2015 is finally upon us. Like every industrial sector, renewable energy watched the budget in bated breath . The interim budget in 2014 did bring the cheers on renewable energy developers as Accelerated Depreciation benefit was restored for wind energy. With the Government’s proposal for 100GW of solar power by 2022 being the highlight of Modi-sarkar so far, a lot was expected but unfortunately the budget has evoked a mixed response.
Here is a list of Highs and Lows of the budget
- Government is launching a scheme for faster adoption and manufacturing of electric vehicles (FAME) with an initial outlay of Rs 75 crore.
- The plan for 100GW of solar energy by 2022 was made official. The budget also mentions plan to develop 60GW of wind power, 10GW of Bio power and 5GW of small hydro power by 2022.
- The finance minister envisioned providing electricity to the 20000 villages without electricity access, through offgrid solar power by 2020. (A dream to far??)
- No big cheer for manufacturing in the solar sector other than an excise duty cut on round copper wire and tin alloys for use in the manufacture of Solar PV ribbon (used in solar PV cells), subject to certification by Department of Electronics and Information Technology.
- To fund clean energy initiatives the minister has proposed an increase in clean energy cess from Rs 100 to 200 per metric tonne of coal.
The not so highs
- No Tax free bonds for renewable energy projects in line with other infrastructure projects.
- Lack of clarity on the use of increased clean energy cess.
- No Priorities for renewable energy from the low cost funding received from ADB and other sources (External Commercial Borrowings).
- A reduction in MAT from the current 18% was an expectation from the industry for this budget and it finds no mention.
However, Pasupathy Gopalan MD of Sun Edison finds the budget to be a Visionary Move.