Due to the pandemic of the previous year, every industry had high expectations from the Union Budget of 2021-22. The renewable energy industry, especially the solar energy industry, was demanding more support to overcome the aftereffects of the lockdown caused by the epidemic.

The effect of this lockdown was also that people started adopting solar to avoid rising electricity bills. Which had not happened before. And because of this, the solar sector got a big boost in the form of research and development.

The budget year 2021-22 has not failed the expectations of the solar energy sector. You must be thinking how, then, to understand how budget 2021 will benefit the solar industry.

As per Budget 2021, Solar Energy Corporation of India (SECI), and Indian Renewable Energy Development Agency Limited (IREDA) has been earmarked additional funds of about Rs 3.5 lakh crore with assured funds, Which will be used to support distribution companies (Discoms), which is a good step to take the solar industry forward.

Besides, the Finance Minister, Nirmala Sitharaman, also expressed the need for a framework for setting up more public and private DISOMS, with a clear intention of providing consumers with more options for power distribution. At the same time, furthering the initiative of self-reliant India, she announced an increase in the import duty of solar inverters and solar lanterns from the current 5 percent to 20 percent and 15 percent respectively. They believe that this will give a boost to local manufacturing.

• The funds given to SECI and IREDA will prove to be important in removing the difficulties faced in setting up solar power plants. However, it is important to formulate clear guidelines to direct the use of these funds. Which will determine the success of the schemes. For example, the Ministry of New and Renewable Energy (MNRE) decided last year to implement rooftop solar subsidies through state DISCOMS, which was not promoted at all by the solar manufacturers association, due to the solar manufacturers association. There was a confrontation with Discom. By this, you must have understood how clear guidelines make plans successful.
• The industry has also taken steps towards the research and development of solar modules and solar inverters. It has been decided to fund SECI and IREDA for such initiatives. With which the import option can be converted into local and better quality hardware.
• The funds being given to support the Discoms and the rigid rules made will directly benefit the end-user and at the same time, the initiative will provide full support from the end-user, which will change the existing infrastructure of the solar industry.
• Privatization is also a very good step, which will arouse the spirit of competition among service providers and improve the infrastructure of power generation and distribution. This will increase the need for low-cost electricity, thus boosting the demand for solar parks.
• Other announcements such as lowering compliance norms will help small companies in solar space startups. The increase in the need for green energy to adopt electric vehicles (EVS) will also be appreciated.
• As far as the Make in India mission is concerned, the increase in Import Duty on solar inverters and solar lanterns is positive.

However, separating customers by simply purchasing imported hardware is not enough to create a self-sufficient India, it is equally important to build domestic production capacity and systematically promote Indian solar inverters and solar lanterns. India has so far achieved only 37% of its target installed capacity of 100 GW. The solar capacity of the rooftop, especially the residential rooftop, is negligible. To overcome the challenges in the rooftop segment, it should be more focused on the budget.

To summarize, while the budget has announced funds in the solar and electricity sectors, some targets would have been better served. If it is implemented effectively, the Indian solar market will remain in profit for a longer period than the measures announced this year.

This was important information about the budget for 2021. If you liked this information or you want to give any kind of suggestion, then you can comment below in the comment box. Stay connected for important information with Ornate Solar.

Ornate Solar is the official partner of Canadian Solar panels, Renewsys Made in India Panels, Enphase Micro-Inverters, SolarEdge Solar inverters with Optimisers, Fronius OnGrid Solar Inverters.