Power News We love to talk!

APR 19 2017

To give rooftop solar power a boost, Narendra Modi government axes duties

  • Economic Times, ET Bureau / Hyderabad
  • Created: Wed 19th APR 2017

In a bid to encourage the use of rooftop solar power, the ministry of new and renewable energy (MNRE) has exempted customs and excise duties on materials used in solar rooftop projects of more than 100-KW capacity.

The move is expected to cut down the overall cost of power generation through solar rooftop projects. Currently, grid tariff for rooftop solar hovers around Rs 6 per unit. Solar tariff touched a new low last week as the final levelised tariff for a 250 MW solar project in Andhra Pradesh was discovered to be Rs 3.15 per unit.

The development also coincides with the Solar Energy Corporation of India (SECI) extending the bid-submission deadline for 1,000-MW grid-connected rooftop solar scheme for government buildings. SECI has received no bids for tenders for the scheme. An official with knowledge about the SECI bids told FE that all the relevant players in the market were waiting for this step by the government. SECI expects the decision to elicit good response for the tenders.

However, Kameswara Rao, partner at PwC, believes that net benefit from the exemptions would be relatively small as such installations often use government subsidy or viability gap funding (VGF). In the VGF model, a one-time grant is provided to projects that are economically justified but fall short of financial viability.

An MNRE official told FE that the move is aimed towards promoting rooftop solar installations across the country. The development will also aide the domestic solar module manufacturing industry. Developers mostly use imported modules for solar installations as they are 8-10% cheaper than their domestic counterparts. The exemption in duties is expected to bridge the gap between the prices of imported and domestically manufactures solar modules.

Though the country is progressing decently in adding renewable capacity, rooftop installation targets have remained elusive. By 2022, India aims to achieve 40 GW of grid connected solar rooftops. So far, only about 500 MW have been installed and about 3,000 MW has been sanctioned.

Apart from the private sector, the railways, airports, hospitals, educational institutions and government buildings have been spotted as potential solar rooftop sites. The MNRE had said that at least 5,900 MW power and annual financial savings of `830 crore can be achieved through rooftop solar projects in government properties.

 

 

Tags

RAILWAYS Andhra Pradesh Grid Renewable Energy Solar Energy Power Generation Tariff Ministry of New and Renewable Energy Energy Price waterhouseCoopers Pvt. Ltd Power India solar power Solar Solar Energy Corporation Of India

Related News

  • MNRE, World Bank review solar parks progress  Read more
  • Prime Minister Dedicates 1732 MW to nation in Himachal  Read more
  • No shortage of coal in the country - Piyush Goyal  Read more
  • No plans to scale down CIL production target: Swarup  Read more
  • TMEIC Completes the Integration of the Power Electronics Manufacturing Facility and Inaugurates New Corporate Office in Bangalore  Read more
  • Govt halts subsidy on CFL to encourage LED-based solar lights  Read more
  • SBI, Power Finance Corp file plea in NCLT against East Coast Energy  Read more
  • Narendra Modi meets top global, Indian oil chiefs to revive investment  Read more
  • Policy key to unlock Indian Energy Exchanges full potential  Read more
  • Coal imports hit record high on slow domestic output  Read more