Recommendations for Energy Storage in India

India’s energy sector has grown rapidly over the last year driven by policies, reforms and investments. Various policy initiatives such as introduction of UDAY, amendments in National Electricity Act, new solar RPO target for states, biofuel policy, small hydro policy, offshore wind policy and new hydrocarbon policy have all contributed to growth of the industry. However, there is still a long way to go with some persisting issues requiring attention and resolution at the earliest, making the upcoming budget crucial to the energy sector.

- Pradeep Saini and Aradhana Gahlaut

The India Energy Storage Alliance (IESA) took into account the industry’s views and along with its research-backed opinion, compiled a list of recommendations for Union Budget 2017-18 to foster rapid growth of the energy storage industry in India. Renewable energy integration with storage has been on the radar for the last few years and MNRE allocated Rs 18 crore towards R&D and implementation of schemes related to energy storage in the RE sector in 2016. This allocation needs to be enhanced significantly under the 2017-18 Budget to foster innovation in energy storage research. In the existing structure, basic import duty is currently 10% on Lithium ion cells, leading to importing Li-ion batteries being expensive. This requires that import duty on the cell should be waived off completely or at least reduced to encourage the manufacturing of Lithium ion batteries in India. This should go hand in hand with the introduction of excise duty and local tax exemption on local assembly of Lithium ion packs. The government has successfully aided solar project in the past and similar to that, there should be an Accelerated Depreciation of up to 80% on energy storage projects to reduce the tax burden. The government should also provide a tax rebate on purchase of BMS, charge controllers, solar inverters, UPS and power electronic equipment along with incentives for setting-up of manufacturing clusters. Keeping up with environment-conscious trends, it is time carbon credits and any other incenti