Make In India – Push for Renewable Energy
The Make in India week has indeed been a successful one proven by securing investment commitments worth Rs 15.2 lakh crore, with host state Maharashtra alone accounting for Rs 8 lakh crore. Apart from others, a positive push for renewable energy came with the promise made by the minister for power, coal, and new and renewable energy, Mr. Piyush Goyal, that solar manufacturing in India is likely to get significantly cheaper in the next 18 months. The current annual solar manufacturing capacity in India stands at a meagre 4GW. (Source: Livemint.com)
To understand what Make In India has for the Solar Energy sector in particular below are some highlights taken from the Make In India website (Source: Make In India Website)
- Total renewable capacity target of 175 GW by the end of 2022, out of which 100 GW from solar power
- India’s Annual Solar installations to grow over four times by 2017. 10.86 GW of utility-scale solar and grid connected rooftop solar capacity will be added by 2016-17.
- Various Incentives have been offered by the government to promote renewable energy, such as generation-based incentives (GBIs), capital and interest subsidies, viability gap funding, concessional finance, fiscal incentives etc.
- Prices for solar modules have declined by almost 80% since 2008
- The government has established a dedicated financial institution – the Indian Renewable Energy Development Agency, makes for renewed impetus on the promotion, development and extension of financial assistance for renewable energy
- Foreign Direct Investment (FDI) up to 100% is permitted under the automatic route for renewable energy generation and distribution projects subject to provisions of The Electricity Act, 2003.
- The package of incentives (except wind) includes fiscal concessions such as 80% accelerated depreciation, concessional custom duty for specific critical components, excise duty exemption, income tax exemption on profits for power generation etc. in wind power projects.
Financial support (Budget 2015-16)
- The excise duty on solar water heater and system is restructured from 12% to NIL without CENVAT credit or 12.5% with CENVAT credit.
- Full exemption on excise duty is being provided on round cooper wire and tin alloys
- Full exemption from basic customs duty (BCD) is being provided on evacuated tubes
- BCD is being reduced to 5% on Active Energy Controller (AEC) for use in the manufacture of Renewable Power System (RPS) Inverters to 5%.
- Exemption from excise duties and concession on import duties on components and equipment required to set up a solar plant.
- A 10-year tax holiday for solar power projects.
- Wheeling, banking and third party sales, buyback facility by states.
- GBI schemes for small solar projects connected to a grid below 33KV.
- Reduced wheeling charges
- Special incentives for exports from India in renewable energy technology under renewable sector-specific SEZ.
- A subsidy of 30% of the project cost for off-grid PV and solar thermal projects.
- Loans for off-grid applications.