Budget 2022: Domestic solar equipment manufacturers expected to benefit

Domestic solar equipment manufacturers are expected to benefit from the Union Budget FY23`s proposals.

In a report HDFC Securities pointed out that proposals such as additional financial allocation under Production Linked Incentive (PLI) scheme for solar module manufacturing in India will boost the sector.

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Accordingly, companies, Tata Power, L&T, Adani Enterprises, and Coal India, which plan to set up solar PV modules are expected to benefit out from this move, said the brokerage house.

Notably, to facilitate domestic manufacturing to reach the ambitious goal of 280 GW of installed solar capacity by 2030, an additional allocation of Rs 19,500 crore was made in the budget for the PLI scheme for manufacture of high efficiency modules, with priority to fully integrated manufacturing units from polysilicon to solar PV modules was made in the budget.

Another proposal to replace existing safeguard duty with Basic Custom Duty on solar cells being increased from 20 to 25 per cent and on solar modules from 20 to 40 per cent is expected to aid the industry.

"Significant boost to domestic solar cells and module manufacturing industry will as to compete with cheaper imported solar equipment provider."

"Positive for domestic solar cells and solar module manufacturers like Tata Power, Adani Enterprises, L&T, Coal India, etc."

Besides, proposal of issuing green bonds for mobilising resources for setting up green infrastructure projects in the public sector will further support the sector.

Further, the budget has provided for giving ainfrastructure` status to energy storage systems, including grid-scale battery systems.

"Access to cheaper long-term finances for funding infrastructure projects in renewable and clean energy projects."