Union Budget 2025 | Green energy firms look to boost sectoral allocations

Bengaluru: With recent geopolitical events like harsher US sanctions on Russian oil, and China’s export curbs, India’s renewable energy sector is hopeful that the upcoming Union Budget will lay a roadmap for the fossil fuel-dependent economy to ramp up its green energy capacity in several regards.

Whether it is output, storage capacity, new production-linked incentive (PLI) schemes with bigger budget allocations for areas like battery infrastructure, or promotion of research and development, green energy stakeholders want a stronger domestic push, especially at a time when India may struggle to meet its 2030 goal of reaching 500 GW from non-fossil fuel sources.

“Many firms in these sectors are still in the incubation or pre-production phase, and it is important for them to get into the production phase to avail the benefits of PLIs of the renewable energy sector,” said Subburathinam P, Chief Operating Officer, TeamLease Services.

Make-in-India remains challenging

“The solar cells that we import from countries like China, will have to be made in India. We support make-in-India, but it will be challenging for Indian solar manufacturers to scale sufficiently by March-April 2026. There is not enough domestic capacity at the moment – it’s all about the timing,” said Damian Miller, co-founder and CEO of Orb Energy.

Players have also asked for greater incentives and investments in grid infrastructure and storage capacity.

Tanya Singhal, founder of Mynzo Carbon and SolarArise, said, “What you also need is storage at three ends. Right now, a lot of the tenders are about storage at the plant end, which is at the generating source. Instead, we need storage at the generation, the collection point, and at the distribution point. Only with a tri-network will real grid stability come.”

“There needs to be a separation between large-scale storage vis-a-vis mobility storage. If you look at the last PLI scheme, a large chunk of it just went for electric mobility. But for scaling renewables, you need very different solutions,” Singhal said.

Despite the long road ahead, industry players see this as an opportunity with the sector and its standards poised to create significant impact in trading standards globally.

TeamLease’s Subburathinam said that very few industries have the projected growth that renewable energy and EVs have, in the upper single digits or almost double-digit growth. But still, a steeper growth trajectory is required for the sector to achieve India’s 2030 target.

Executives have also talked about employability as a challenge and suggested a programme with an outlay of about Rs 2,000 crore that focuses on renewable workforce training to upskill labourers who have been traditionally working across coal mines and face the possibility of mass unemployment.

More financial incentives

Higher capital allocation is also required towards Green Energy Corridor projects and the PM Surya Ghar Muft Bijli Yojana for fiscal 2025-26 (FY26), along with streamlining of procedural hurdles, said CareEdge in a report.

On battery energy storage systems (BESS), the group recommended providing initial subsidy support through PLI or viability gap funding (VGF), near-term tax relaxations on importing raw materials, and establishing bodies for exploring and operating overseas critical mineral assets.

Other areas requiring higher fund allocation, said industry players, are offshore wind capacity and green hydrogen above the current outlay under the Strategic Interventions for Green Hydrogen Transition programme.

N Venu, MD and CEO, India and South Asia, Hitachi Energy, also pointed out the importance of adopting AI-driven solutions. He suggested policies for local manufacturing, rare earth mineral imports, lifecycle management, and incentivising decentralised energy systems.

He also highlighted the importance of addressing systemic limitations such as transmission and distribution losses and the financial sustainability of state-owned discoms.

Singhal urged stronger implementation on-ground, saying, “Even as deals are happening and tenders are coming, many of them are not getting converted into actual allocations. There is a need for a consistent supply of projects.”