BUDGET: Solar Industry Wants Funds For RTS, Lower GST On Equipment

BUDGET: Solar Industry Wants Funds For RTS, Lower GST On Equipment Solar Industry Wants Funds For RTS, Lower GST On Equipment

As Union Finance Minister Nirmala Sitharaman is all set to announce the Union Budget today in Lok Sabha, the solar industry is anticipating several announcements for the sector. Several industry experts anticipate announcements that could support the industry. However, most of the solar industry experts who spoke on the issue talked about reduced taxes for solar equipment like solar modules and the announcement of funds under the recently announced Pradhan Mantri (PM) Suryodaya Scheme.

Srivatsan Iyer, the Global CEO of Hero Future Energies, said he anticipates a reduction in the GST rates on crucial components used in the renewable sector.

“We advocate for a more conducive fiscal environment, beginning with reducing GST rates on crucial components such as solar modules and electrolyzers, accelerating India’s transition to clean energy. Additionally, as domestic manufacturing scales up and seeks to become more cost-competitive, temporary relief from import duties could help maintain the momentum of solar capacity expansion across the country,” Iyer said.

“The Indian government has played a significant role in accelerating the widespread installation of solar power and cultivating awareness regarding the advantages of renewable energy. A recent stride in this direction is the announcement of the Pradhan Mantri Suryodaya Yojana, which is geared towards making solar power accessible to the masses at an affordable rate. With this in mind, the industry awaits the Finance Minister’s announcement in the upcoming interim budget, particularly regarding dedicated funds for the said residential rooftop scheme,” Capt. Ishver Dholakiya, Founder & Managing Director, Goldi Solar said.

He also added, “Furthermore, the existing Production-Linked Incentive (PLI) scheme holds promise, anticipated to significantly enhance the manufacturing infrastructure, and catalyse the broader adoption of solar energy.” 

Vineet Mittal, Chairman of Avaada Group, said that the government should also consider easing out income tax rules for those who want to set up solar manufacturing units. “Besides, the government should also consider extending Section 115BAB of Income Tax up to 2030 for setting up new manufacturing units for solar modules, electrolyzer and green hydrogen production. To boost the sectors and achieve desired targets, GST should be kept nil, initially, on Green Hydrogen and its derivatives, whereas 5% GST should be reinstated on Solar Power Generating System and its related parts,” Mittal said.

Raman Bhatia, Founder and MD of Servotech Power Systems, said the Budget should consider reducing GST rates on solar equipment and increasing budgetary allocations for the battery sector. “Addressing concerns about solar panel imports, the budget should prioritize measures for indigenous development, technology transfer, and incentives for local manufacturing to curb foreign exchange outflow. The PLI scheme for renewable manufacturing and viability gap funding for battery storage is crucial for advancing India’s energy goals. A revision of GST rates for the renewable energy sector and increased budgetary allocation for batteries under PLI are pressing needs,” he said.

“Collaborations to include solar panels in new houses and green FDI initiatives are anticipated. Recommendations for reduced customs duties on solar imports, enhanced concessional finance availability, and a dedicated nodal agency for sector investments underscore the call for a conducive environment. Addressing state restrictions on installed transformer capacity, advocating for unrestricted net metering, and extending the ISTS waiver are critical steps. Reduction in customs duty on solar cells, an extension of ALMM, and shortening project implementation time are needed to support indigenous solar manufacturing, shaping the nation’s energy landscape and influence its global standing in sustainable practices,” he added.

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