Renewable Energy Business in India
India has emerged as a global leader in renewable energy with ambitious targets of 500 GW renewable energy capacity by 2030. The government's strong policy push, declining technology costs, and growing corporate demand for clean energy have created a thriving ecosystem for renewable energy businesses. From solar and wind to green hydrogen and energy storage, opportunities span the entire value chain.
This comprehensive guide covers company registration, regulatory approvals, subsidies and incentives, open access regulations, and compliance requirements for renewable energy businesses in India. Whether you're setting up a solar EPC company, developing a wind farm, or entering the green hydrogen market, this guide provides the regulatory roadmap you need.
Renewable Energy Sector Overview
Key Growth Drivers
Policy Support
- • National commitments under Paris Agreement
- • Production Linked Incentive (PLI) schemes
- • Green Open Access Rules 2022
- • Renewable Purchase Obligations (RPO)
- • Waiver of transmission charges
Market Dynamics
- • Declining solar and wind tariffs
- • Corporate demand for RE100 commitments
- • Energy storage cost reductions
- • Green hydrogen emerging opportunities
- • Export potential for RE equipment
Renewable Energy Business Models
Solar Energy Businesses
Wind Energy Businesses
Emerging Segments
Company Registration Process
Business Structure
Private Limited Company recommended for manufacturing and large EPC businesses. LLP suitable for consulting and small-scale services. Consider project-specific SPVs for utility-scale projects.
Company Incorporation
File SPICe+ on MCA portal. Select appropriate NIC codes for renewable energy activities. Timeline: 10-15 days. Cost: ₹6,000-15,000.
Udyam Registration
Register as MSME for priority in government tenders, collateral-free loans, and subsidy benefits. Classification based on investment in plant and machinery.
MNRE Registration
Register with Ministry of New and Renewable Energy for manufacturers/EPC contractors. Required for government tenders and subsidies. Timeline: 30-60 days.
BIS Certification
Mandatory for solar panels, inverters, batteries, and other electrical equipment. Get ISI mark for products. Timeline: 3-6 months.
ALMM Inclusion
Apply for Approved List of Models and Manufacturers for solar modules. Mandatory for government and open access projects. Timeline: 3-6 months.
MNRE and Regulatory Approvals
MNRE Registration Benefits
- • Eligibility for government tenders and subsidies
- • Access to CFA (Central Financial Assistance)
- • Quality certification recognition
- • Listing on official vendor directories
- • Participation in government schemes
Approved List of Models and Manufacturers (ALMM)
ALMM is mandatory for solar PV modules used in:
- • Government projects and government-assisted projects
- • Projects under open access
- • Net metering projects
Requirements: BIS certification, application to MNRE, factory inspection. Separate lists for solar cells, modules, and solar pumps.
Subsidies and Incentives
Central Government Incentives
- PLI Scheme: ₹24,000 crore for solar PV manufacturing with 13-18% incentive
- CFA for Rooftop Solar: Up to 40% subsidy for residential installations
- PM-KUSUM: Subsidy for solar pumps and grid-connected solar plants
- Green Hydrogen Mission: ₹19,744 crore outlay for hydrogen ecosystem
- Tax Holidays: Section 80-IA benefits for power generation projects
- ISTS Waiver: Transmission charges waiver extended till 2025
State-Level Incentives
- Capital Subsidies: On plant and machinery for manufacturing
- Stamp Duty Exemption: On land purchase for RE projects
- Property Tax Waiver: For RE manufacturing units
- Subsidized Land: Industrial parks for RE manufacturing
- Electricity Duty Exemption: For captive consumption
- Additional State Subsidies: On top of central subsidies
Production Linked Incentive (PLI) Scheme
Key features of PLI for Solar PV Manufacturing:
- • Incentive rate: 13-18% on sales of manufactured goods
- • Tenure: 5 years from commencement of production
- • Minimum investment: ₹600 crore for polysilicon to ₹50 crore for modules
- • Domestic value addition requirements
- • Outlay: ₹24,000 crore over 5 years
Open Access Regulations
Green Energy Open Access Rules 2022
The Green Energy Open Access Rules simplify procedures for consumers to purchase renewable energy directly from generators:
Key Provisions
- • Threshold reduced to 100 kW (from 1 MW)
- • Uniform application process across states
- • Timeline for approval: 15-30 days
- • Banking facility for surplus power
- • Carry forward of surplus for 12 months
Charges Structure
- • Wheeling charges: As per SERC regulations
- • Cross-subsidy surcharge: As applicable
- • Transmission charges: Waived till 2025
- • State transmission charges: As per state
- • Scheduling and system operation charges
Captive Power Plants
Captive consumers must hold at least 26% of equity and consume at least 51% of generation to qualify for captive status and associated benefits.
National Green Hydrogen Mission
Mission Overview
Launched with ₹19,744 crore outlay to make India a global hub for green hydrogen production and export:
SIGHT Programme
₹17,490 crore for electrolyzer manufacturing and green hydrogen production incentives.
Pilot Projects
₹1,466 crore for pilot projects in steel, mobility, shipping, and green hydrogen hubs.
R&D
₹800 crore for research and development in hydrogen technologies.
Green Hydrogen Business Opportunities
- • Electrolyzer Manufacturing: Alkaline and PEM electrolyzers
- • Hydrogen Production: Green hydrogen from renewable energy
- • Storage Solutions: Compressed, liquid, and solid-state storage
- • Fuel Cells: Stationary and mobility applications
- • Industrial Applications: Steel, ammonia, refining, methanol
- • Transportation: Hydrogen fuel cell vehicles
Tax Benefits for Renewable Energy
| Benefit | Details | Eligibility |
|---|---|---|
| Section 80-IA | 100% deduction of profits for 10 consecutive years | Power generation projects |
| Accelerated Depreciation | 40% depreciation in first year for solar projects | Solar power assets |
| GST Rate | 5% GST on solar power generation | Renewable energy generation |
| Customs Duty Exemption | Exemption on specific equipment imports | RE project developers |
| MAT Provisions | MAT credit available | Power generation companies |
Key Compliance Requirements
CEA Regulations
Compliance with Central Electricity Authority regulations for grid connectivity, safety standards, and technical specifications.
State Regulations
State Electricity Regulatory Commission approvals, open access permissions, and wheeling agreements.
Environmental Clearance
Environmental Impact Assessment for projects above threshold capacity. Forest clearance if applicable.
Labor Compliance
Compliance with labor laws for EPC activities, O&M contracts, and manufacturing operations.
Renewable Energy: The Future is Bright
Opportunities
- ✓ 500 GW target by 2030
- ✓ Strong policy support
- ✓ Declining technology costs
- ✓ Corporate demand growth
- ✓ Green hydrogen emergence
Key Success Factors
- ✓ Strong project execution
- ✓ Quality and reliability
- ✓ Cost competitiveness
- ✓ Regulatory compliance
- ✓ Long-term customer relationships
India's renewable energy sector offers tremendous opportunities for entrepreneurs and investors. With the right approach to quality, compliance, and innovation, renewable energy businesses can achieve significant growth while contributing to India's clean energy transition.