Budget analysis for 2024 for the renewable energy sector

Conclusions and analyses

India had an RE capacity of 191 GW in May 2024, including 85 GW of solar. This growth was driven by government initiatives such as the National Solar Mission. The Government of India’s transition to renewable energy is supported by key initiatives such as Pradhan Mantri Sahaj Bijli Har Ghar Yojana (SAUBHAGYA)ensuring universal electrification of households, and Green Energy Corridor (GEC)which strengthens the renewable energy transmission network. The National Smart Grid Mission (NSGM) AND National Smart Meter Program focus on modernizing energy distribution, however Faster implementation and production of (hybrid and) electric vehicles (FAME) The program promotes the use of electric vehicles. India is the leader in the international arena International Solar Alliance (ISA)and in the country Surya Ghar Muft Bijli Yojana provides free solar energy to homes. India’s renewable energy push is marked by necessity. We import over 80% of our oil needs, making it vulnerable to global price fluctuations and geopolitical tensions. Increasing solar power capacity in India to 85 GW in 2023 has already started to reduce our dependence on fossil fuel imports. It is also useful for its economic competitiveness. As of December 2020, the Gujarat Urja Vikas Nigam (GUVNL) auction (Phase XI) for 500 MW solar projects set a record for the lowest tariff of ₹1.99 (~$0.025)/kWh. The sector has the capacity to address unique challenges, including the water crisis, as thermal power plants require significant water resources. Maharashtra’s interest in solar energy is partly driven by recurring droughts affecting the ability to produce thermal energy. Environmental, social and governance (ESG) factors are increasingly being considered by global investors. Therefore, it is important that the future belongs to renewable energy and India must make efforts now to compete with the world in the future. The budget was a “mixed bag of potential” that covered various issues but left out several fruitful regimes. We have seen significant allocations to solar energy, critical minerals and energy storage solutions. However, the lack of targeted support for sectors such as bioenergy and wind energy has left the sector vulnerable in several respects. This may impact the overall coherence of renewable energy strategies. Regardless of missed opportunities, the actions outlined in this budget will play a key role in shaping the country’s energy landscape. However, to fully realize this vision, the Government will need to address the gaps identified in this Budget and provide all segments of the renewable energy sector with the support they need to thrive.