As India’s renewable energy sector continues to grow, the spotlight is on Finance Minister Nirmala Sitharaman as she prepares to present the Union Budget 2025. As India strives to achieve its ambitious target of 500 GW renewable energy capacity by 2030 and net-zero emissions by 2070, the upcoming budget is expected to play a pivotal role in shaping the country’s clean energy future.

Stakeholders across the renewable energy ecosystem, from solar manufacturers to energy storage solution providers, have a comprehensive wish list. They expect policy reforms, tax rationalization, financial incentives, and infrastructure development to ensure sustained growth, innovation, and global competitiveness in this critical sector.

Easier norms for debt-raising, emphasis on domestic solar manufacturing, incentives for battery energy storage systems, augmenting grid infrastructure, and making available subsidized land for setting up projects are among the areas the industry would like the budget to address.

Financial Incentives and Policy Support

Amit Jain, CEO and Country Manager of ENGIE India anticipates the introduction of long-term tax incentives. He also highlights the need for expedited land acquisition processes and streamlined approval mechanisms to support large-scale renewable energy projects.

Simarpreet Singh, Executive Director and CEO of Hartek Group noted the budget must prioritize financial incentives for large-scale renewable energy projects and strengthen the focus on domestic solar manufacturing including continued support for production-linked incentive (PLI) programs and infrastructure development.

Akshay Hiranandani, CEO of Serentica Renewables, urged the government to support the sector by absorbing part of the incremental costs associated with building transmission infrastructure for renewable energy expansion. Additionally, he requested the government to provide concessional financing for projects, particularly hybrid power solutions integrating wind, solar, and storage.

Shyam Sharma, Chief Financial Officer of O2 Power, noted that extending the concessional 15% tax rate under Section 115BAB for manufacturing by five years would be a significant boost. “Addressing long-term financing challenges is equally critical—reinstating lower withholding tax rates on external commercial borrowings and Indian rupee-denominated bonds could ease debt-raising for renewable projects. Goods and services tax (GST) exemptions for corporate guarantees to secure special purpose vehicle loans and classifying renewable energy certificates and carbon credits as GST-exempt securities would provide much-needed relief,” he added.

Sundeep Gupta, Vice Chairman and Managing Director of Jakson Group, said simplifying tax regulations and establishing a single-window clearance system for foreign investments will enhance the ease of doing business and attract global capital.

Chetan Shah, Chairman and Managing Director of Solex Energy, said captive solar power parks should be incentivized to address the growing demand. Central and state governments can support these projects with subsidies and interest benefits, creating a sustainable infrastructure that aligns with India’s green energy transition.

Strengthening Domestic Manufacturing

Alok Garodia, Managing Director at Jupiter International, said India’s renewable energy products, especially high-efficiency solar technology, offer significant export opportunities. To capitalize on these opportunities, the budget must prioritize strengthening the entire value chain, from manufacturing to research and development (R&D). He emphasized on domestic production of high-efficiency photovoltaic cells and modules.

Shah said a sector-specific PLI program should be introduced to aid domestic solar module manufacturers scale their operations. Establishing advanced R&D laboratories with government funding and active participation from private players will enhance innovation and accelerate technological advancements in the solar sector.

He also noted that developing a comprehensive domestic ecosystem for manufacturing machinery essential for solar modules and cells will reduce import dependency, enhance cost efficiency, and bolster local innovation.

“Governments should facilitate the subsidized availability of land for setting up modules and cell manufacturing units. This will lower manufacturers’ capital expenditures and attract investments in the sector,” Shah noted.

Amit Paithankar, Whole Time Director and Chief Executive Officer of Waaree Energies noted that expanding ALMM to include supply chain components such as ingots and wafers would enable comprehensive backward integration, bolstering domestic manufacturing. Additionally, targeted tax benefits and capital incentives can encourage innovation and self-reliance.

Infrastructure and Grid Modernization

Anmol Jaggi, Chairman and Managing Director of Gensol Engineering, noted that the Approved List of Models and Manufacturers framework designed for solar cells, is expected to take effect on June 1, 2026. However, with limited in-house cell manufacturing capacity and an ambitious annual target of approximately 35 GW, the demand-supply gap could lead to higher pricing for domestic cells and an increase in overall project costs.

Gupta noted that to achieve the 500 GW non-fossil fuel-based energy goal, significant investments in grid expansion, hybrid power projects, and financial mechanisms like green bonds are essential. Establishing dedicated green hydrogen corridors and fostering global partnerships is equally important.

Raman Bhatia, Founder and Managing Director of Servotech Renewable Power System, said that investments in robust transmission infrastructure and the integration of solar with green hydrogen production is vital. Special allocations for solar-powered agricultural pumps and rural microgrids will bring clean energy to underserved communities.

Hiranandani requested the government to consider providing concessional financing for projects, particularly hybrid power solutions integrating wind, solar, and storage.

Promoting Innovation and Sustainability

Paithankar noted that the renewable energy sector requires robust long-term innovation capabilities built on a strong R&D foundation to remain globally competitive. Increasing export subsidies for the renewable energy sector from 1% to 5% would significantly enhance India’s global standing while providing accelerated depreciation rates for core renewable assets, allowing the industry to adapt to the rapid pace of technological advancements.

Shah said building government-funded R&D laboratories in collaboration with private players can reduce testing costs, streamline certification processes, and support the development of high-efficiency solar modules.

Bhatia noted that enhanced incentives for battery energy storage systems will enhance grid stability and ensure reliable power supply, particularly for off-grid communities.