Budget 2016 – India’s Report Card for Renewable Energy

Indian Prime Minister Narendra Modi has vouched for 175 Gigawatts of renewable energy by 2022. He has also promised 12 GW of Power by the end of 2016 - three times the current capacity! In case you forgot, this was at the India Pavilion at the Paris Climate Change Conference.

Awesome as it might sound, that’s a tall claim. Even by Narendra Modi’s standards. India’s renewable energy capacity addition between 2002 and 2014 has been around 20% YoY. However, the total capacity remains only a fraction of the target.

The big question now is, can India reach the ambitious target it has fixed for itself ahead of Budget 2016?

Let’s have a look at what the government has done in the sector so far!

· The US has allowed a grant of $4 billion to push India’s Renewable energy goals.
· 266 GW worth commitments were received at the RE-Invest Conference held in February 2015. As many as 27 Banks are ready to finance 72 GW renewable energy projects.
· India has signed a MoU with Germany to promote solar energy. As a part of this, Germany will allow low-interest loans in the range of 1 Billion Euro over the next 5 years.

Most analysts don’t see a huge leap in terms of budget allocation for the renewable energy sector. The government’s investments, however, could be in the form of subsidies and tax-free bonds. It’s been doing that with rooftop solar panels for a while.