Govt to give customs, excise duty benefits to boost solar rooftop sector

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In a boost to India’s lagging solar rooftop sector, the Union ministry of new and renewable energy (MNRE) has decided to give custom and excise duty benefits to it for ensuring high growth.

The move will not only bring down the costs of setting up projects but also that of generation.

Solar power developers setting up grid-connected solar PV (photovoltaic) projects have been seeking “grant of duty benefits” (custom and excise duty) from the MNRE for installation of rooftop systems.

“The matter of extending the duty benefits to the rooftop grid connected solar PV power plants has been under consideration in this ministry for past some time. After examination of various issues involved, it has been decided to give customs and excise duty exemption certificates, with immediate effect, to all rooftop solar PV power projects upto a minimum capacity of 100 KW (Kilowatt) as a single project or bundled project,” said an MNRE order dated 11 April.

India has set up an ambitious 100 GW solar power target by 2022. Of the 100 GW, 60 GW is planned through large- and medium-scale grid-connected solar power projects while 40 GW is planned from the solar PV (photovoltaic) rooftop system. But the sector has not seen great growth and the target of 40 GW by 2022 remains a mammoth task. As per reports, India’s rooftop solar capacity till 2016-end was about 1GW only.

Experts welcomed the custom and excise duty benefits for the solar sector.

“It’s a good decision. We have ambitious targets and we need to take various steps to encourage the solar rooftop sector. We need to bring the cost down and make it more lucrative,” said Rakesh Kamal, a consultant with The Climate Reality Project, an independent organisation working on climate change-related issues.

Kamal, however, cautioned that MNRE should also focus on maintaining the quality of solar panels being used.

India has given a huge thrust to the solar rooftop sector as it does not require pooling of land or separate transmission facilities and has minimal technical losses, unlike ground-mounted solar projects.

The solar rooftop sector also benefits power distribution companies in various ways. For instance, rooftop projects enable these companies to meet their renewable purchase obligations, help them in managing daytime peak loads which are projected to become more widespread as India’s economy grows and in localised generation of power that ultimately helps them in avoiding costly power.

States leading in providing solar rooftop power are Tamil Nadu, Gujarat and Punjab.

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