Renewable Energy – Why Budget 2016 is mega important

"We have a target for renewable energy generation of 175 Gigawatts by 2022. We have got off to a good start with nearly 12 GW likely to be installed by 2016, more than three times the current capacity,” Prime Minister Narendra Modi said at the Paris Climate Change Conference. The Indian Prime Minister’s statements were met by awe and applause.

Of this target capacity, 100 GW is planned to be Solar power, 60 GW Wind power, 10 GW from Bio-mass and 5 GW from Hydro-electric power. However, the Central government's budget allocation for solar energy for the current financial year is merely 0.45% of the required investment.

That’s exactly why Budget 2016 is going to be a game-changer for the renewable energy sector.

Power Minister Piyush Goyal has said that to achieve the 100 GW target by 2022, India would require an estimated investment of over $89.88 billion at the rate of Rs. 6 Crores per MW. That’s not cheap.

The International Energy Agency has predicted that India’s renewable energy capacity can reach 147 GW by 2020 only if the government invests $120 billion in capital and $40 billion in equity.

It has to be noted that the government’s investments may not necessarily be capital in nature. It can push the sector with subsidies and tax-free bonds too. It has been pushing rooftop solar panels via that method anyway.

Budget 2016 is going to be a game-changer for the Renewable Energy sector.

Image credit: Indiatimes