There is a lack of clarity at the individual state level on tariffs and policies preventing execution of power purchase agreements (PPAs) in a time bound manner
With Prime Minister Narendra Modi's focus on renewable energy in India, many expect Finance Minister Arun Jaitley to have a lot in store for the clean and renewable energy industry in the Union Budget 2016 to be announced on Monday.
Some of the companies in clean energy shared their expectations with dna for Budget 2016.
1. Solve policy lag: Shyam Menon, Investment Director, Infuse Ventures, said that a lot of financing lined up for the deployment of wind and solar projects is stuck. This, he said, is due to lack of clarity at the individual state level on tariffs and policies preventing the execution of power purchase agreements (PPAs) in a time bound manner. Menon hopes that this problem gets addressed soon.
Similarly, Rupesh Agarwal, Advisory Partner & Leader – Energy, BDO India said that the renewable transition continues to be mired with litigation, discom financials and policy lag.
"Stressed projects are today a cause of systemic concern and there is a need to ensure that tribunal rulings are more or less binding and that going to courts is more a matter of exception than de rigueur (required by etiquette or current fashion)," said Agarwal.
2. Capital allocation and incentives: "The extension of the 10-year tax holiday, inclusion of electricity under GST and clarity on domestic content requirement for renewables would help reduce the end cost of electricity to the consumer," said Agarwal.
He added, "UDAY (Ujwal Discom Assurance Yojana) has the potential to transform the discom landscape but needs clear visibility on capital allocations and time bound focus on separation of content and carriage if the one off projected gains are to be sustained over a longer time frame."
Sanjeev Aggarwal, MD & CEO, Amplus Solar said, "The industry strongly advocates giving incentives and rebates to the customer to make solar an attractive and viable option. The solar rooftop industry will certainly need better non-recourse financing options by increasing power sector exposure limits of domestic banks."
Menon added that he would like to see continuation of the national renewable energy targets and incentives.
3. Need government reforms: "The government needs to design reforms in terms of pushing the initiative of biomass plants and more in 2016. Countries like Japan and India have identified a huge opportunity to further the energy cooperation across the energy value chain. The government needs to design reforms in terms of pushing the initiative," said Vimal Bhandari, MD & CEO, Indostar Capital.
4. Push for solar power generation: "The need of the hour is to create an effective ecosystem to enhance solar power generation capacity across India by making relevant announcements in upcoming Union Budget 2016-17," said Amplus Solar's Aggarwal.
"Enforcement of net metering guidelines across states and renewable purchase obligations, strengthening of grid infrastructure to accommodate intermittent solar power, and promoting storage solutions by way of incentives, subsidies etc form the foremost asks of the solar power industry," he said.
He added, "While talking about rooftop solar in specific, extension of tax holidays, waiver of electricity duty and banking charge for solar rooftops, activating Renewable Energy Certificates (REC) benefits for rooftop projects and captive projects will certainly motivate more rooftop installations to come-up in cities and towns."
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