While we appreciate the Government’s focus on environmental reforms, it is imperative to focus on the solar segment as a key contributor for clean energy, which is missing from the Union Budget 2019-20. With the economic viability of the solar power coupled with the fact that conventional energy sources now have to match solar parity, it would have been heartening to see more focus on the solar segment to promote ecological stability. The infusion of INR 70,000 crores in the PSBs to stabilize the economy will in-turn benefit the NBFCs, which, in the absence of a recognized banking unit to support small – mid scale solar financing, will provide an impetus to the solar project financing. However, the invitation to foreign PV manufactures to set-shop in India, without prior stabilisation of the domestic manufacturing market, is premature and may prove to be counterproductive for the demand in the sector, which will render the NBFC financial support redundant.
The Govt. has been indicating some changes in the solar segment for a while; however we believe that there are critical gaps that need to be plugged. On one hand, while the safeguard duty provided the industry with interim relief, the short sighted implementation of a year, holds the proverbial sword of uncertainty in the industry. Moreover, lack of tangible movement on the anti-dumping policy has dampened the business projections in segment. The only silver lining in the budget is the progressive movement towards adoption of Electric Vehicles (EVs) and the incentives being offered to the end consumer. With the promotion of clean energy through the use of EVs is likely to boost the demand in the segment, thus providing impetus to achieve economies of scale and in-turn create a viable ecosystem.