The electric vehicles (EV) market in India has gained momentum. The total EV sales in 2019 hit around 4.98 lakh units and expected to grow at a CAGR of 36 percent by 2026. The EV battery market is estimated to be $676 million in 2018 and forecasted to grow at a CAGR of 30 percent by 2026. The total MWh addition in 2018 touched 4.75 GWh with an expectation to grow to 28 GWh by 2026. To ensure the battery segment grows to its full potential, India Energy Storage Alliance (IESA) has called for Budget boost and tax deduction on lithium-ion batteries. This will not only help EV segment but also renewable energy projects.
IESA is an alliance focused on the advancement of energy storage and e-mobility technologies in the country. The body believes policies such as banning the sales of the internal combustion engine (ICE) two and three-wheelers in highly polluted cities, scrapping of old vehicles, stringent emission norms, will further drive the EV sales.
On what is expected by the energy storage industry from the Budget, Dr. Rahul Walawalkar, president, India Energy Storage Alliance (IESA), told Telangana Today, “In 2020, the GST council reduced the GST rates on electric vehicles from 12 percent to 5 percent. Battery with solar is at 5 percent. GST for stationary storage batteries (for Li-ion only) is now at 18 percent. Thus, a level-playing field for GST on batteries for all energy storage technologies and applications is the need of the hour. We request the Finance Ministry to consider allowing stationary energy storage systems used in the hybrid projects to avail the 5 percent GST allowed for renewable energy devices and related systems.”
To boost ‘Make in India’ and energy storage, the allocation of appropriate funds for the proposed subsidy for NITI Aayog’s Giga Factory manufacturing plan is vital. Also, national labs and research institutes have shown interest in developing Li-ion and other advanced technologies such as flow batteries, sodium-based batteries, zinc-air and metal-air batteries, etc. To encourage scientific research and innovation in energy storage technologies, the Central government should allocate appropriate funds for research through various government programs, he suggested.
An income tax deduction up to Rs 2.5 lakh on the interest of the loan to purchase EV was provided to the buyers in 2019, thus boosting the sector. “Government might take initiatives to provide similar tax benefits for the consumers for rooftop solar plus storage. Rooftop solar plus energy storage can fast-track the meter adoption of advanced energy storage technologies,” Walawalkar noted.