Union Budget 2025: Analyzing Key Expectations for the Renewable Energy Sector

Union Budget 2025: The Rough Edges around India's Green Energy Transition Must Be Smoothened
At the Union Budget 2025, the whole nation will be on tenterhooks to find out which set of priorities are coming up this time-round for policies supporting the renewable energy sector, initiatives regarding green hydrogen, and initiatives toward energy storage. All of these will assume their own relevance for reaching the 500 GW non-fossil energy capacity that India hopes to achieve by 2030.

India has moved quite a long way into renewable energy, and it boasts of 213 GW installed capacity in the major areas of wind and solar. The question of more incentives is being sought under the umbrella for an evolved phase to develop gaps and segments in green hydrogen, BESS, especially about the adoption of renewables by MSMEs.
S. Kumar Independent research consultant
Green Hydrogen: Huge Potential and High Cost
Much emphasis in the budget probably to be revealed tomorrow will be on missions, particularly green hydrogen, a mission in that area for a target output of 5 million metric tons annually by 2030. Promising to that extent the cost of its production is steep, and not yet at number so significant enough that its applicability on a very wide scale makes much sense.

The country's experts believe that for pilot projects of green hydrogen and its by-products, such as ammonia, there should be economic incentives. The SIGHT initiative program needs more investment as it is much in demand to reach the goal of that program.
Battery Energy Storage Systems: Stabilizing Energy
The other area requiring policy intervention is in the aspect of Battery Energy Storage Systems (BESS). This is a system that stores energy produced from renewable sources and releases it according to requirements. In this way, at all times, energy supply is stable.

This includes incentive-driven policies targeted at the alignment of investments to energy storage; the big challenge that government is likely going to face during the implementation of this program is a high capital cost and dependence on raw materials. To the analysts' budget, the provision for funding under the Viability Gap Funding Scheme and Project Import Scheme which shall be channelled towards scaling up BESS manufacturing.
Policy Support to MSMEs and Start-ups
The adoption of renewable energy among MSMEs is still low because of resource constraints and lesser awareness. The budget will likely announce some measures making green financing easier, offering tax benefits that make such investments eco-friendly, and creating a robust structure of green credit and carbon markets.

The government should provide better conditions towards sustainability, to which the start-ups can achieve international standards trading. They could be supported, if access green funds, as well incentives of cleaner technology are streamlined enough to help benefit start-ups along with SME's.

Green policy filling the gap to transition
India lacks an actionable policy framework as of now, which would push the private sector and businesses to transition into sustainable operations. There is also no climate finance taxonomy present there, meaning there isn't any such frame that can classify and define sustainable economic activities and hinders capital flow towards adaptation and mitigation under climate.

The earlier budget had promised to establish such a taxonomy, but the light did not emanate on the timeline of implementation. The budget would wait for its stakeholders to keep this agenda at the front to let the businesses adjust their business operations towards achieving sustainable goals.
Rural Climate Resilience of India
This is because experts believe that allocations on climate resilient agriculture and water management need to be increased. With this, the impacts of climatic changes affecting the poor societies will be relieved.

There should be improvements in access to renewable for rural, where microgrids installed by running on renewable sources among others, increasing the availability of energy with which such vulnerable areas can increase their resilience.

Awareness and Climate Education
Most of the clean energy awareness areas as well as efforts in terms of climate education will be led by that. The government will empower communities to contribute toward the green transition when such efforts are channeled toward the right avenues.

Conclusion
The Union Budget 2025 will give India a historic opportunity to fill in a few significant gaps in the green energy space and speed up towards a sustainable country of the future. With thrust in green hydrogen, energy storage, MSME, and climate resilience, this Budget could be a base builder in reaching energy targets by 2030.