WWF India Stressed on the Need of a Stronger Policy Framework for Cleatech Startups & SMEs

Indian authorities are chasing the ambitious clean energy targets, and to achieve that a holistic approach is required. This approach must include new-age clean technology startups and small and medium-sized enterprises (SMEs) which can play an important role in helping the country achieve its goals.

The Covid-19 pandemic and its resultant lockdown has, however, impacted SMEs and startups the most, leaving the sector to seek support from the government through policy reforms in order to bounce back and drive clean energy innovations in the country.

'Clean energy policy landscape in the SME sector', a new report published by the World Wide Fund (WWF) India, maps the clean energy ecosystem, identifies individual constraints, and offers policy recommendations to propel the growth of cleantech SMEs in the country.

According to the report, while India's move towards clean energy transition has led to the emergence of various startups and SMEs, there are only a handful of policies that help accelerate the growth of these companies to meet India's clean energy demands.

While almost 140 government interventions focus directly or indirectly on clean energy and startups and SMEs, only 38 policies actually target SMEs in the clean energy ecosystem, making it difficult for SMEs to reap the benefits of the provisions.

The report also attributes the slow growth of India's mass transition to clean energy to limited policy support mechanisms for R&D and innovation for clean energy segments.

A few of the recommendations mentioned in the report include: Provision to procure at least 20 percent of capacity from SMEs under the DISCOM-led aggregation model in the solar-rooftop segment.

It also recommends ensuring passing on the benefits in implementation of solar rooftops to the residential consumers in terms of 80C benefits.

Besides that, the report suggests lowering the GST slab of energy-efficient appliances and setting targets to procure a percentage of energy efficient goods from SMEs for entities such as EESL.

It also recommends setting up of short-term targets for EV rollout over a time span that helps in achieving the long-term targets, and provisions to procure 10 per cent of compressed biogas from startups.

Speaking about the report, T.S. Panwar, Director, Climate Change and Energy Programme, WWF India, said, "Policy support can be an important catalyst in accelerating clean energy adoption and scale up. This report maps the clean energy policy landscape in the SME sector, and provides recommendations that not only benefit the innovators but also help the government in realizing its larger vision for the upliftment of the SME sector in the country."

The key recommendations laid down in this report, if implemented in the short, medium, and long term can galvanise the progress of the six segments of the clean energy sector.

The report suggests practical steps to be taken, like credit guarantee and risk-mitigation mechanisms under public financing and augmenting funding under the public sector, CSR, and other avenues that would enable incubators to provide early-stage risk capital to startups.

It also highlights the need to provide support to emerging business models, make provisions of long-term capital and provide clarity on continuity and consistency in policies.