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In a proactive move, the India Energy Storage Alliance (IESA) has presented a set of vital recommendations for the upcoming budget to the Finance Ministry. The industry body is pushing for tax holidays, GST reductions, duty exemptions, and other measures aimed at propelling the growth of India’s energy storage, electric vehicle (EV), and green hydrogen sectors.
Among the key proposals put forth by IESA are calls for tax holidays to stimulate investments in the energy storage sector, an extension of the Production-Linked Incentive (PLI) for ACC Battery Manufacturing, duties for cells and supply chain components, incentivization of the Micro, Small, and Medium Enterprises (MSME) sector and the startup ecosystem of energy storage. Additionally, the alliance suggests establishing a roadmap to increase India’s Gross Expenditure on Research and Development (GERD) to 2% of GDP by 2030.
Dr. Rahul Walawalkar, Founder and President of IESA, and President & MD of Customized Energy Solutions (CES), India, highlighted the potential for India to become a global hub for the advanced battery manufacturing ecosystem. He stressed the need for special incentive programs and tax incentives to attract investments to India’s burgeoning energy storage industry. The proposals aim to create immediate demand and reduce overall system costs, ultimately fostering domestic manufacturing.
Debi Prasad Dash, Secretary of the US-India Energy Storage Taskforce (ESTF) and Executive Director of IESA, emphasized the importance of focusing on startups in the energy storage and EV space. He suggested allocating dedicated funds for the sector, including manufacturing-focused startups, and establishing a National Institute for Energy Storage to advance India’s research and development roadmap in this domain. Dash also advocated for funding Public-Private Partnership (PPP) projects and industry-academic institutes to drive advanced technology developments.
Key recommendations from IESA include advocating for 10-year tax holidays for standalone battery energy storage projects using renewable energy, exemptions on customs and excise duties for energy storage systems, reduction of GST rates on lithium-ion batteries to 5%, and avoiding double taxation on Energy Storage Systems (ESS).
For the manufacturing sector, IESA proposes an extension of the PLI for ACC Battery Manufacturing capacity from 50 GWh to 100 GWh, duties for cells and supply chain components, support for intermediate material manufacturers, and incentives for the MSME sector and startup ecosystem.
In the realm of green hydrogen, IESA recommends a PLI scheme with a budget outlay of at least 50% of the budget for the Sustainable Hydrogen Production (SIGHT) program. Further, the alliance calls for the reduction of GST rates on electrolyzers and qualified green hydrogen, as well as on the oxygen by-product of green hydrogen production.
The recommendations underscore the industry’s collective call for a supportive policy framework to accelerate the growth of India’s energy storage, EV, and green hydrogen sectors. The proposals will now undergo scrutiny as part of the budgeting process, with industry stakeholders eagerly awaiting the outcomes in the upcoming Union Budget 2024 |
