Bring down interest rates for renewable power: Assocham

New Delhi: Assocham president Sumant Sinha has called for bringing down interest rates for the industry, especially for the domestic renewables sector, which is seeing high rates of 8-10 per cent compared to 3-4 per cent in the western markets.

"Bring down the interest rates because ours is a very interest rate-centric sector. ...it is high compared to what you pay in other parts of the world. In India, the rate is in the range of 8 per cent to 9.5 per cent for the industry and (specifically) in power and renewables (sectors) it is 8-10 per cent," Sinha, who is also the Chairman of ReNew Power said.

"In the western world, rates are 3 to 4 per cent."

Sinha said every 1 percentage point increase in the interest rate has an impact of about 15 paise on the tariff of power. So, if borrowing is cheaper, the industry could provide cheaper power to the buyers, which will have a multiplier effect down the chain.

Singh also suggested that the allocation for PLI for solar module manufacturing can be increased from Rs 19,500 crore in the Budget for FY2022-23.

"In our sector what we would like to see happening is (announcement of) the green hydrogen policy, with some degree of subsidization for manufacturing of hydrogen if we have to compete at the global level. In the US, the generation cost of hydrogen is $3-4 and their government gives subsidies up to the same level so its is almost free," he said.

In his Independence Day speech last year, Prime Minister Narendra Modi announced the launch of the National Hydrogen Mission with a view to aiding the government in meeting its climate targets and making India a green hydrogen hub.

The government can also come up with a PLI Scheme for electrolysers in the Budget, he suggested. Electrolysers are required for the production of hydrogen and the domestic availability of this equipment will boost India's plan to become a global hub of hydrogen manufacturing.

Sinha also called for a PLI scheme for setting up of wind energy capacities.

"Why don't we have a PLI for wind as well? It will bring down the cost of wind also. Wind and solar are both renewable energy. I have suggested this to the government," he said, adding that this will help bring down the cost of wind capacities which is around Rs 6 -7 crore per megawatt at present.

Moreover, Assocham has sought reduction in basic customs duty and correction of inverted duty structure on critical raw materials for the aluminium industry as high import duties is a huge disadvantage for the sector heavily dependent on imported raw materials.

In its pre-Budget memorandum 2023-34, Assocham said high import duty on raw materials results in Indian finished goods getting costlier and uncompetitive in international markets, rendering negative protection against cheaper imports of finished products, and discourages domestic value addition within the

country.