Budget 2020: What can government do for the energy industry sector?

By Dr Rahul Walawalkar,

GST reduction for batteries: Suggested range of 5 to 10%- In 2020, the GST council reduced the GST rates on electric vehicles from 12% to 5%. Battery with solar is at 5%. GST for stationary storage batteries (for Li-ion only) is now at 18%. Thus a level playing field for GST on batteries for all energy storage technologies and applications is the need of the hour. We request Hon’ble Finance Ministry to consider allowing stationary energy storage systems used in the hybrid projects to avail the 5% GST allowed for renewable energy devices and related systems like BMS, EMS, controller, cell, PCS similar to spare parts including Solar power generating system and Windmills and wind operated electricity generator

Allocation of appropriate funds for the proposed subsidy for NITI Aayog’s Giga Factory manufacturing plan- To boost Make In India and energy storage revolution appropriate funds must be allocated by the Government for its execution. With NITI Aayog’s plans for advanced batteries Giga-factories, with a minimum ceiling of 5 GWh and a maximum of 20 GWh, with a cumulative capacity of 50GWh allocates a Cell level subsidy per kWh.

Government funds for R&D Initiatives in India- Indian National Labs and research institutes have shown interest in developing Li-ion and other advanced technologies like flow batteries, sodium-based batteries, zinc-air and metal air batteries etc. To encourage scientific research and innovation in energy storage technologies, Central Govt should allocate appropriate funds for research in India through various government programme

Tax benefits for solar plus storage- The income tax deduction up to Rs 2.5 lakh on the interest of the loan to purchase EV was provided to the buyers in 2019, thus boosting the sector. Government might take initiatives to provide similar tax benefits for the consumers for rooftop solar plus storage. Rooftop solar + energy storage can fast-track behind the meter adoption of advanced energy storage technologies.