India developers seek tax relief, supply support in new state budget

Share

From pv magazine India

India aims to reach 500 GW of installed electricity capacity from non-fossil fuel sources by 2030, with 293 GW from solar and 100 GW from wind, according to the government's Central Electricity Authority.

As of June 30, 2024, India has installed 85,474.31 MW of solar capacity, including 12.92 GW from rooftop projects.

To reach the nation's 2030 renewable energy goal, the government plans to accept bids for 50 GW of renewable energy capacity per year, including 10 GW of wind capacity, from fiscal 2023-24 to the fiscal 2027-28 period.

JMK Research said that developers installed 14.7 GW of solar capacity in fiscal 2023-24, with 11.7 GW from utility-scale projects and 3 GW from rooftop installations. Supply chain disruptions and high GST and import duties on renewable energy components have driven up project costs.

To reduce import dependency, the government introduced the production-linked incentive (PLI) scheme for high-efficiency PV modules, encouraging the domestic industry to scale up manufacturing.

“The green energy sector is witnessing a paradigm shift, driven by strategic government initiatives and innovative financial instruments,” said Amit Jain, Global CEO of Sterling and Wilson Renewable Energy. “Higher capital expenditure, evidenced by the government’s plan to invest over $360 billion in renewable energy infrastructure by 2030, highlights the [government’s] commitment to expanding the country’s renewable energy mix and enhancing grid capabilities.”

Jain called for lower GST rates for renewable energy components to 5% from the current rates, significantly lowering the cost structure for green energy projects. He said this would also increase the affordability and attractiveness of renewable energy investments, promoting faster adoption across the country.

“Key areas of focus include the development of large-scale solar parks and ultra-mega solar power projects, necessitating streamlined approval processes and a single-window clearance system to simplify land acquisition,” said Chandra Kishore Thakur, CEO for Asia, Africa, LatAm and Europe at Sterling and Wilson Renewable Energy.

Thakur said he expects the government to enhance low-interest loans and financing schemes to aid solar power developers and engineering contractors. He has also called for tax rationalization, such as reducing GST on solar components, lowering basic customs duty (BCD) on PV modules and cells, and extending the ALMM deadline until domestic supplies are sufficient.

Thakur called for accelerated grid integration, focusing on enhancing substations and transmission line capacities, increasing manufacturing capacity for critical equipment like transformers, inverters, and HT panels, and providing capital subsidies and tax breaks to reduce the cost of setting up manufacturing facilities in India.

Neerav Nanavaty, CEO of BluPine Energy, expects greater support in the solar sector. “Despite challenges such as high initial costs and regulatory complexities, robust incentives and streamlined processes are imperative to make solar power more accessible and affordable,” said Nanavaty.

To continue reading, please visit our pv magazine India website.

This content is protected by copyright and may not be reused. If you want to cooperate with us and would like to reuse some of our content, please contact: editors@pv-magazine.com.

Popular content

Solid-state batteries enter pilot production, costs expected to drastically drop
01 November 2024 The latest findings from Taipei-based intelligence provider TrendForce show that all-solid-state battery production volumes could have GWh levels by 2...