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Key Takeaways for Indian Solar Industry Under Budget 2017

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The Indian Budget 2017 and the Indian Solar Industry

India has set up a humongous target of installing 175 GW of solar power by 2022. Not only does this requires a huge commitment on the part of the Indian solar players but also demands a large financial obligation. It is estimated that solar, alone, would require $100 billion in debt to reach 100 GW.

Though the recent budget has announced financial aid to the solar sector but it is a marginal increase. Moreover, the budget has ignored solar rooftop and storage segments which should have been prioritized. In 2016-17 INR 20 crore was allocated for developing energy storage technologies. However, there is no allocation for energy storage in the most recent budget. There was no allowance for electric vehicles as well.

Some Positives for Solar Energy in Budget 2017

  • Creation of 20 GW of solar capacity
  • Rural electrification will be prioritized with 18,452 villages to be powered by March 2018
  • Lower import duty on items (LNG, solar tempered glass) used in making solar cells and panels.

Also read What You Need To Know About India’s First Solar Powered Village.

solar panels india

Negatives for Solar Industry in Budget 2017

  • Allocation to the Ministry of New and Renewable Energy is INR 5,473 crore, compared to INR 5,036 crore last year.
  • The government continues to favour solar energy as it has allocated INR 3,361 crore for solar as against only INR 408 crore for wind energy
  • About 7,000 railway stations in India will be powered through solar energy
  • Almost 74% of the total funds towards solar energy will be utilized for grid-interactive projects
  • To replace 15% of India’s irrigation pumps with solar pumps
  • No direct support was announced for rooftop solar.
  • Financial support to the Solar Energy Corporation of India (SECI) has been reduced by 50% to INR 50 crore.
  • Funding for research and technology development remains constrained with just INR 144 crore (nearly half of last year’s allocation). This could limit the scope of further learning and commercializing the usage of solar plus storage in India, which is set to explode at exponential rates elsewhere.

There have been ambiguities regarding the impact of GST on the solar market in India as well. Another uncertainty is the transfer of coal cess to the National Environment Fund, funds from will be utilized for the renewable energy projects.


Sneha Shah

I am Sneha, the Editor-in-chief for the Blog. We would be glad to receive suggestions, inputs & comments on GWI from you guys to keep it going! You can contact me for consultancy/trade inquires by writing an email to

2 Responses so far | Have Your Say!

  1. Rajat

    I feel budget allocation for solar energy is not negative as classified in your article.

  2. Sneha Shah

    Thanks for your comment Rajat! Everyone has his view point. I feel with so much going on in the country and so much more to achieve, we definitely need more encouragement on the financial front.