Kerala’s Budget Pushes for Widespread EV Adoption, Rooftop Solar Systems

Government announces various incentives and tax rebates to encourage the purchase of EVs


Kerala’s budget for the financial year 2019-2020 puts impetus on setting up rooftop solar projects in the state while also pushing for the development of the Electric Vehicle sector in the state.

In his speech, Kerala’s Minister of Finance, Thomas Isaac mentioned that in Kerala households have already registered for 200 MW of rooftop solar PV capacity. According to Isaac’s budget speech, “The entire power requirement of ‘New Kerala’ will be ensured. Around 130-150 crore unit electricity will be made available from 500 MW rooftop solar PV projects and 500 MW floating solar PV projects and terrestrial (utility-scale) solar projects.”

Funds will be provided from Kerala Infrastructure Investment Fund Board (KIIFB) to install solar panels on the rooftop of government institutions like schools and hospitals. The government understands that in the future, Kerala’s energy dependency on other states is going to increase. Keeping this is mind, the government plans to provide ₹63,750 million (~$895.99 million) through the fund board to set up the required transmission system.

The budget also focuses on reducing the loss of power by encouraging the use of LED bulbs. The budget promises that funding will be ensured to the state’s electricity board for the bulk purchase of LED bulbs.

In accordance with the State Electric Vehicle Policy, steps will be taken to increase the number of electric vehicles to 1,000,000 by 2022. To promote widespread adoption, private EVs will be given rebate on the road tax. The government has also fixed a grant amount of ₹120 million (~$1.69 million) for starting an e-mobility promotion fund. This year, 10,000 electric autos will be given subsidy from this.

The expenses of owners can be reduced if the centers for replacing charged electric batteries are set up in cities. Keeping this in mind, the government has provided for setting up of charging stations with the assistance of private investors based on the specifications of vehicles. Gradually, only electric autos will be newly permitted in major towns.

According to Isaac, “To create a model, KSRTC will switch over to electric buses. The electric buses tried at Pampa – Nilakkal have proved that this change will bring only profit to KSRTC. ln the first phase, all the services in Thiruvananthapuram Corporation will be changed to electric buses. With this, Thiruvananthapuram will be the first city in India having all buses e-vehicle.”

Factories for the manufacturing of electric vehicles and research facilities will also be created in the state, according to the tabled budget.

Atmospheric pollution is increasing in urban areas of Kerala. The pollution from diesel and petrol vehicles contributes to this. In order to resolve the issue, the government will encourage the registration of electric vehicles. A 50 percent concession on tax for five years will be granted to newly registered e-rickshaws. For other electric vehicles, 25 percent concession on tax for five years will be granted.

The state’s budget shows the shift towards a more sustainable way of life for the state, with an increased focus on renewables and intelligent communication. It also represents the positive outlook the state has towards changing its energy dynamics even though there are land availability issues for large-scale deployment of renewables.

The funding for better transmission capability is evidence that this budget is forward looking as it envisages a future where the state will not produce enough, but the right steps are being taken to ensure constant supply via routing power from other regions.

The year 2018 was a tumultuous one for the solar industry. The interim budget to be presented today (February 1, 2019), can be an opportunity to help restore the confidence in stakeholders, announce further reforms, and steer the solar industry in the right direction to meet the target of 175 GW of renewable energy by 2022 — a goal which was set by the NDA government in the beginning of its five-year term.

Kerala has shown its commitment towards clean energy in its budget and other states would be expected to do the same.


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