Rooftop solar scheme will need capital subsidies, integration with discoms to succeed: ReNew Chairman on Budget 2024

The government continues to do its bit, but now there's space for the corporate sector to come in and contribute to capital investments: Sumant Sinha

First of all, we have to recognise that budget as a vote on account budget. So there wasn't much that could be announced in this budget. The main event is, obviously, in July where the Finance Minister has promised unprecedented reforms. So that is something we are now even more keenly looking forward to.

Meanwhile, the important things to note here, were not so much the giveaways or the announcements for different areas. But at a macro level, (a) fiscal deficit – going down to 5.1 percent. That's a very steep reduction, and gets us more than halfway to the target of 4.5 percent by by FY25-26. So that's really good progress. Also, (b) reduced market borrowings, which therefore means that there's more space for the corporate sector to come in. Government continues to do its bit, but now here's space for the corporate sector to come in and contribute to capital investments. This is one big theme of this budget.

The second thing is the push of the government to create a modern, innovative, resilient and green economy is really coming through in a number of different ways. For example, the R&D corpus that has been announced. Loan repayments over a 50-year period, low interest or zero interest to spur the innovation of the Indian economy. Then, all the announcements around the green economy, e.g., offshore wind, biomass, electric vehicle charging, showcases skin in the game from the government side. And then, of course, the further continuation of the solar rooftop scheme, and showing what the benefit to the common person could be of Rs 15,000-18,000 annually. All of these are very positive I think in terms of the power sector.

In order to ensure the sustenance of rooftop scheme, I think they're going to, first of all, announce more capital subsidies. Secondly, I think they will try to make sure that this power is absorbed into the grid by the discoms. So here, the government is going to make sure that discoms accept this more easily. And thirdly, the capex for the programme is going to be through the REC which is also something they're going to do. Also, the government will work on creating a better and larger ecosystem of rooftop solar installers. The finance minister talked about creating jobs and so on. So I think that's what they're going to try to do as well. Hopefully these measures will help to nullify some of the pain points which led to sluggish offtake of the earlier rooftop scheme.

The announcement regarding offshore wind projects has to translate into a specific plan and then MNRE will have to call for bids. And then people like us will have to bid. So I think that is how it will go forward.

Even though there was no mention of green hydrogen in the budget, but a lot of things that are happening outside of the budget. There's a whole National Green Hydrogen Mission that was announced. Then there was Viability Gap Funding for battery installations. Then there was a whole transmission line funding for the renewable energy capacity installation. So there are a lot of things that have already been put into place. Now, it's up to the nodal ministry which is the Ministry of New and Renewable Energy (MNRE) to implement a lot of these things as we go forward.

I don't think we need more announcements per se. We just need more implementation, which, in fact, the (MNRE) is doing. Going by the number of bids that are coming in for renewable capacity addition, I think the government has done a remarkable job on furthering the entire green economy.

(As told to Sweta Goswami, Assistant Editor (Energy-Infrastructure), Moneycontrol.)

(Views are personal, and do not represent the stand of the publication.)