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

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

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.

By: | New Delhi | Published: April 19, 2017 6:39 AM
Prime Minister Narendra Modi. (PTI)

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.

  1. P
    Prince Bhalla
    Apr 19, 2017 at 7:17 pm
    Last year 1st October on my father's birthday I had installed 1.5 kW solar system on my rooftop . I am very satisfied now as electricity bill reduced average ₹ 300 per month .
    Reply
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      Capt M Seethapathi
      Apr 19, 2017 at 7:16 pm
      These benifits r for high end users. What about domestic users upto 1 kw. Is there any hiden things behind this issue.
      Reply
      1. R
        Rajan kundra
        Apr 19, 2017 at 6:12 pm
        No banks given loan for Soler ins utions
        Reply
        1. R
          Rajendra Kumar Shukla
          Apr 19, 2017 at 5:14 pm
          It is right and good step for saving electricity . Government should take more focus on village areas.
          Reply
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            Anand S Patil
            Apr 19, 2017 at 5:06 pm
            It's a good initiative! However, SECI has reduced the Tender to only 500 MWp as against earlier 1000 MWp, as they now observe that there isn't adequate Rooftop Area available.
            Reply
            1. V
              Vinay Deodhar
              Apr 19, 2017 at 10:00 am
              Government should not keep a lower limit like 100 kW if it wants to encourage smaller houses. To make target of 40 GW existing buildings are crucial and smaller homes, residential multi story buildings should be encouraged to go for solar.
              Reply
              1. Varadarajan Seshamani
                Apr 19, 2017 at 8:05 am
                The right move would have been to increase subsidies on the materials purchases for Solar panels - that would directlky reduce the pricing of solar panels and would increase the purchases from suppliers within India. It would not matter even if the panels were imported, because the suppliers would get to handle the installations and carry out all the other activities that go to make up a solar PV installation. Reducing duties would achieve the same tmhing, but would not incentivise the Indian suppliers to indigenise the potential Indian part of the supply. The subsidy would also boost up Indian Industry, while the duty reduction would directly boost Chinese Industry
                Reply
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