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The government boosted a scheme to encourage people to install solar panels on their rooftops, showed details of the interim budget announced by Union finance minister Nirmala Sitharaman, who also said the Centre will offer viability gap funding for certain wind energy projects, introduce mandatory blending of compressed biogas in natural gas products and strengthen the electric vehicle ecosystem in steps to towards India’s commitments to reach net zero carbon emissions by 2070.
Sitharaman was presenting the interim budget for 2024-25, as is the practice in a general election year when the full Union budget is presented later in July by an administration that has secured the electoral mandate. During the presentation, the finance minister outlined the government’s broader theme of “Viksit Bharat”, or that of a “prosperous Bharat in harmony with nature, with modern infrastructure, and providing opportunities for all citizens and all regions to reach their potential”.
The minister mentioned the upgrade of the solar rooftops scheme announced by Prime Minister Narendra Modi in January, which will help an estimated 10 million households save up to 300 units of electricity every month. The rooftop solar initiative, which offers incentives for people to buy solar installations and feed energy back to the grid, can also lead to savings of ₹15,000 annually, the minister said.
These measures, including interventions that the minister did not specify for the EV industry, will also help companies, provide entrepreneurship opportunities for a large number of vendors for supply and installation, and create employment opportunities for the youth with technical skills in manufacturing, installation and maintenance.
The allocation for solar (grid) for 2024-25 is a whopping ₹10,000 crore for the next financial year, against ₹4,970 crore in 2023-24. The revised estimate for how much was will be spent on the scheme for the current 2023-24 financial year was ₹4,757 crore.
For wind power (grid), ₹930 crore has been allocated compared to ₹1,214 crore outlay in 2023-24. The revised estimate for wind power (grid) was ₹916 crore. For bio energy programme, ₹300 crore has been allocated under ministry of new and renewable energy. There was no allocation for the sector during past two budgets.
Over 250 million households across India together have the potential to deploy 637 GW of solar energy capacity on rooftops, according to a report by the Council on Energy, Environment and Water (CEEW) released last year.
Deploying just one-third of this total solar potential could support the entire electricity demand of India’s residential sector (~310 TWh), the analysis found. Most residential consumers fall into low-consumption slabs and solar may not be economically feasible for them without financial support even though it is technically possible, the analysis had found.
India currently has installed 11 GW of rooftop solar capacity, of which only 2.7 GW is in the residential sector.
“Today’s Budget announcement on rooftop solar further emphasises the active role Indian citizens will play in the country’s energy transition and supporting India’s climate commitments. Analysis by CEEW suggests that 20-25 GW of rooftop solar capacity would be supported through solarisation of 1 crore households,” said Neeraj Kuldeep, senior programme lead, Council on Energy, Environment and Water (CEEW).
“Further, given that residential consumers receive subsidised electricity from discoms, solarisation of the demand from these households will save about ₹2 lakh crore for discoms over the next 25 years (the solar plant’s life). All states can leverage this opportunity as rooftop solar potential exists everywhere, unlike utility-scale solar, which is primarily restricted to seven RE-rich states,” added Kuldeep.
To help companies set up wind energy projects, the government will offer viability gap funding for harnessing offshore wind energy potential for initial capacity of 1 GW, the minister said. Viability gap funding is the additional money required for a project to become financially viable.
Coal gasification and liquefaction capacity of 100 MT will be set up by 2030, the minister said, adding that this will help in reducing imports of natural gas, methanol, and ammonia, and the government will in phases make it mandatory to blend compressed biogas (CBG) in compressed natural gas (CNG) for transport and piped natural gas (PNG) for domestic purposes.
The government will also offer financial assistance for procurement of biomass aggregation machinery to support collection, and a new scheme of bio-manufacturing and bio-foundry will be launched. This will provide environment friendly alternatives such as biodegradable polymers, bio-plastics, bio-pharmaceuticals and bio-agri-inputs.
The government will expand and strengthen the e-vehicle ecosystem by supporting manufacturing and charging infrastructure, Sitharaman said.
“The budget announcements reveal that the finance minister is pursuing a well-thought-out strategy that is consistent across years with an overarching aim to accelerate India’s decarbonisation efforts. The latest additions to the strategy are a push on offshore wind and rooftop solar. The effort is not just to push low carbon technologies, but to also align decarbonisation with an economic growth strategy through interventions like strengthening the e-vehicle manufacturing ecosystem and creating entrepreneurship opportunities across the value chain. This consistency and focus on the net-zero pathway is bound to be immensely valuable for the country and the world,” said Vaibhav Chaturvedi, fellow, Council on Energy, Environment and Water (CEEW).
India has formally updated its nationally determined contribution (NDC) to fight climate change, confirming to the United Nations apex body in 2022 that it will reduce the emissions intensity of its Gross Domestic Product (GDP) by 45% from 2005 levels by the year 2030, and to have installed capacity for non-fossil fuel-based power sources equivalent to the country’s 50% requirement by 2030.
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