In 2018, Elon Musk commented, “Betting that science is wrong and oil companies are right is the dumbest experiment in history by far.” He was referring to the oil lobby, and how a move to renewables, that will aid a greener planet, has been witnessing resistance. Indeed, renewable energy sources like solar, wind, and hydropower produce fewer pollutants and greenhouse gases than fossil fuels, with concomitant social, sustainability, and cost benefits.
Developed economies have already been witnessing good progress in this space. Ex-US President Biden signed the Inflation Reduction Act (IRA) in 2022, reducing GHG emissions and lowering energy costs. EU, to phase out Russian fossil fuel imports implemented REPower1 EU in May 2022, which will promote clean energy.
State of Renewable Energy in India
India has been committed in this space too, with its enhanced Nationally Determined Contributions (NDCs) under the Paris Agreement, aligning with principles of equity and Common but Differentiated Responsibilities and Respective Capabilities (CBDR-RC). Aided by the LIFE (Lifestyle for Environment) movement, India has pledged to achieve 50%2 of cumulative electric power capacity from non-fossil fuels by 2030.
As of October 2024, out of a total of 452.69 GW3 electric generation capacity, renewable energy stands at 201.45 GW, which is around 46.3% of total installed capacity. Solar leads the segment, with 90.76 GW, followed by wind (47.36 GW).
Renewable energy capacity in India: Buildup from previous budgets around renewable energy
The green energy commitment of the present-day government has been evident in the last few budgets.
Union Budget 2022: INR 3365 CR4 for solar power, comprising both grid-interactive and off-grid projects, was allocated. An outlay of INR 19,500 CR was made for PLIs in solar photovoltaic cell manufacture. The focus on solar power bore fruit – By Dec 2024, an installed solar module manufacturing capacity of ~63 GW5 and solar cell manufacturing capacity of ~ 5.8 GW had been achieved. The PM had made a telling statement back in July 2020, while inaugurating the 750 MW Rewa Solar Project in MP6 – “Solar energy is Sure, Pure, and Secure.” That spirit saw its reflection in the budget. Sovereign green bonds for green infrastructure were also proposed.
Union Budget 2023: Focus was laid on the Battery Energy Storage System (BESS), with Viability Gap Funding. Research shows that in the least Cost Optimized (LCO) pathway for India’s power sector, solar will dominate the growth of electricity generation, however, cost-effective storage solutions are crucial to sustain this post-solar crosses 25%7 of energy mix.
The cost decline for BESS was crucial as a consequence.
An outlay of INR 19,744 CR was also earmarked for the National Green Hydrogen Mission.
Union Budget 2024: Focus was shifted to diversify non-fossil fuel capacity beyond grid-scale solar and on-shore wind. A tender announcement for a 500 MW8 offshore wind project on the coastlines of Gujarat was also made. Thrust on PM Surya Ghar Muft Bijli Yojana for 10 MN households was also given, which led to the growth of rooftop solar to 15.7 GW as of Dec 2024. 100% exemption of Basic Customs Duty (BCD) for 25 critical minerals9 was also announced.
Union Budget 2025: FM Sitharaman, building on the momentum from previous budgets, has focused on long-term energy security this time. A major focus has also been on expanding Nuclear capacity to 100 GW by 2047. Key features around Renewables in this budget can be thought through across a few areas:
Clean-tech manufacturing: Recognizing that MSMEs are key growth drivers, a budgetary allocation of INR 100 CR has been made to boost the manufacturing of solar PV cells, wind turbines, batteries, and electrolysers.
Focus on Solar power: INR 241 BN has been allocated to Solar, including INR 1.5 BN for the solar power grid, and INR 2.6 BN for PM KUSUM (Pradhan Mantri Kisan Urja Suraksha evam Utthan Mahabhiyan), a scheme10 supporting farmers by subsidizing standalone solar pumps and solarizing existing grid-connected pumps to reduce diesel dependence. PM Surya Ghar Muft Bijli Yojana has witnessed an 81% increase in allocation, from INR 110 BN last year to INR 200 BN this year.
Green Energy Corridors (GECs): Modernization of grid infrastructure is pivotal for RE integration. To support the integration of RE into this grid, INR 60 BN has been allocated from GECs. States have been allowed to borrow an additional 0.5% of their GSDP to strengthen the financial health of distribution companies.
Green Hydrogen: The National Green Hydrogen Mission has received a budgetary outlay of INR 6 BN, up from 3 BN last year.
Strengthening EV value chain: To further fortify the EV value chain, Basic Customs Duty on key materials like Cobalt, Lithium-ion battery scrap, lead, etc has been removed. National Critical Minerals Mission11 has been allocated INR 41 BN, to build a resilient value chain for Green Technologies. Budgetary allocation for the PLI scheme for the National Program on Advanced Chemistry Cell Battery Storage has been substantially increased from INR 1.54 BN to INR 15.58 BN.
Focus on Nuclear Power: The Nuclear Energy Mission for Viksit Bharat12 has been introduced, which aims to promote domestic nuclear capabilities and promote private participation. Allocation of INR 20,000 CR has been made to develop at least 5 indigenously designed Small Modular Reactors (SMRs) by 2033. Amendments to the Atomic Energy Act and Civil Liability for Nuclear Damage Act will be taken up by Parliament. While as of Jan 30, 2025, India’s installed nuclear capacity is 8180 MW, plan is to grow that to 100 GW by 2047. The Focus of GoI will be to partner with private firms to set up Bharat Small Reactors and enhance R&D across Bharat Small Modular Reactors, and newer technologies.
Renewable energy is the path forward
The Matsya Purana13, one of Hinduism’s 18 major Puranas (Mahapuranas), mentions in Chapter 68:
ārogyaṃ bhāskarādiccheddhanamiccheddhutāśanāt /
īśvarājjñānam anvicchenmokṣam icchejjanārdanāt // (41)
It translates to:
Health ought to be sought from the Sun, wealth from Agni,
knowledge from Isvara, and emancipation from Janardana.
The Sun has been bestowed a special place of reverence in Puranas and ancient scriptures, and Bharat’s special focus on Solar power and other renewable energy sources is a continuance of that, both from a philosophical and scientific paradigm. Budget 2025 has further reinforced that spirit and laid out a clear path for ushering in renewables within the buzzing energy sector in India – that will be one of many levers to hand-hold India in its path towards Viksit Bharat 2047.
