From enhancing incentives for equipment manufacturing to reintroducing a 15 percent corporate tax concession for new production units, the power sector is hoping the upcoming FY26 union budget will be aligned towards accelerating green energy projects in India.
India is chasing a green energy target of 500 gigawatt (GW) by 2030 not only to honour its Nationally Determined Contributions (NDC), but also to ensure energy security. According to the government, demand is expected to surge to a high of 384 GW in 2031-2032, which will need a combined augmentation of power generation capacity, ranging from thermal, renewable, nuclear, and hydropower.
Industry stakeholders are hoping the budget would address some of their challenges, like transmission expansion, manufacturing bottlenecks including dumping by China, and taxation.
With a day to go for the budget for the financial year 2025-26, here's what the Chairpersons and CEOs of leading power companies want from the finance minister.
Girish Tanti, Vice Chairman, Suzlon Group: Like solar, incentivise manufacturing in wind energy
India's renewable energy (RE) sector has made tremendous strides with the installation of 213 GW of RE capacity so far. Looking ahead, I'm excited about the prospects for wind power in India. With over 1 terawatt (TW) of energy waiting to be harnessed, we've barely scratched the surface – having utilised just 4 percent of it so far. Encouragingly, wind power installations have grown to 48 GW and are on track to cross 100 GW by 2030.
To achieve our ambitious RE targets, it's crucial that we prioritise harmonised growth across all renewable energy sources, ensuring that we deliver affordable energy to all Indians. Like the solar sector, wind also needs some policy push for indigenous manufacturing and logistics support.
Amit Paithankar, CEO, Waaree Energies Ltd: Skilling and non-tariff curbs for ingots, wafers
After modules, the Approved List of Models and Manufacturers (ALMM) for cells is a good policy statement. Something similar for ingots and wafers would also be very helpful. The earlier the government announces an ALMM for these, the faster India’s solar manufacturing ecosystem will grow.
Also, if mass skilling doesn’t begin now, India could be looking at a workforce crunch in this sunrise industry.
Manoj Kumar Upadhyay, Chairperson and MD, ACME Solar Holdings: Bring back 15 percent corporate tax concession for new manufacturing units, including power plants
In the 2022-23 union budget, Finance Minister Nirmala Sitharaman had extended the concessional 15 percent corporate tax rate for manufacturing companies incorporated on or before March 31, 2024, including power generating plants. The government should bring this back in this year's budget.
Pratik Agarwal, MD, Sterlite Power Transmission Limited: Funding for manufacturing transmission equipment and ISTS charges waiver
Funding is needed to accelerate the development of cutting-edge technologies, particularly in areas like submarine cables, HVDC (high-voltage direct current) technology, and strategic communication systems, to outpace global advancements.
Secondly, the government must continue with the waiver on Inter-State Transmission System (ISTS) charges for the renewable sector as it has been a crucial policy move.
Gyanesh Chaudhary, the Chairman and MD, Vikram Solar: Market creation and financing for solar manufacturing
The government should focus on market creation while implementing the schemes in the renewable and new energy sectors. We've seen how well the PM Surya Ghar scheme has come through, but we've not seen much RPO (renewable purchase obligation) compliance among the discoms (power distribution companies), which leads to unsold renewable power. RPO compliance is required to create a green economy. Unless consumers are forced or asked to comply, where will the off-taking go? It's not going to happen on its own.
Besides, financing of solar manufacturing needs to improve. We need scale. We don't need 200 companies with just 500 megawatt (MW) capacity. We need, say, 5-10 companies with 30 gigawatt (GW) capacity each; and that requires a proper ecosystem, including logistics.
Per the latest NDC targets, India has committed to reducing the emission intensity of its GDP by 45 percent by 2030 from 2005 levels, and achieving about 50 percent installed capacity from non-fossil fuel-based energy resources by 2030. For this, the government has committed to increase India's non-fossil fuel-based power generation capacity to 500 GW by 2030.
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