On 1st February 2020, Union Finance Minister Niramala Sitaraman presented the Union Budget for the year 2021-22 in the Lok Sabha. The Union Budget for 2021-22 has laid a major focus on capturing the emerging energy transition trends — from Renewables to Hydrogen and even Smart Metering.
Key announcements on Renewable Energy in budget 2021:
- An additional infusion of Rs 1,000 crore to SECI and Rs 1,500 crore to IREDA.
- Solar Energy
- An additional infusion of Rs 1,000 crore to SECI.
- According to the budget speech, exemption to all items of machinery, instruments, appliances, components or auxiliary equipment for setting up of solar power generation projects is being rescinded.
- Phased manufacturing plan for solar cells and solar panels to be notified.
- Duty on solar inverters raised from 5% to 20%, and on solar lanterns from 5% to 15% to encourage domestic production
- A National Hydrogen Mission will be launched in 2021-22 for generating Hydrogen from green power sources.
- Ministry of New & Renewable Energy (MNRE)
- The allowance for the Ministry of New and Renewable Energy has stayed above ₹5,000 crores for the second consecutive year. This year, the allocation has been ₹5,753 crores to the ministry.
National Hydrogen Mission
Stakeholders wholeheartedly welcomed the announcement on setting up the Hydrogen Energy Mission to generate hydrogen from green power sources. Green hydrogen is a nascent and emerging technology, but the country needs to be future-ready to achieve our energy transition goals.
Increase in Duty on Solar Inverters
The announcements about raising customs duty on solar inverters from 5% to 20% has both its pros and cons. While the move would promote domestic manufacturing in longterm, at the same, it could put off consumers opting to go solar because the cost of solar inverters could go up.