Budget 2018: After record growth, India's renewables progress is slipping

BUDGET 2018 - In line with its climate-change commitments and domestic pollution concerns, India has one of the world’s largest programmes to expand renewables–a tripling of capacity over the next five years.

But after two years of record expansion, the diversion of a national clean-energy cess to subsidise GST (goods and services tax)-induced losses and a new import duty to protect domestic manufacturers of solar equipment threaten to derail India’s ambitious 2022 target.

This is why February 1, 2018–the day the ruling Bharatiya Janata Party (BJP) will present its last full budget before the 2019 general elections–is of particular significance to the renewables sector, which comprises electricity from solar, wind, hydro and bio power.

These are the issues the budget must contend with: India has missed yearly renewable expansion targets since 2016; no more than 29% of the clean energy cess–a major source for funding renewables in the country–has been spent over six years, with Rs 56,700 crore diverted in 2017 to subsidise GST losses; a new import duty on solar modules from China, Taiwan and Malaysia threatens to increase production costs and record low solar tariffs; and the rural poor may miss a renewables job boom, if a workforce cannot be trained.
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