SOLAR TARIFFS

Solar tariffs in India may rise by nearly 10 per cent if current tax exemptions are curtailed under the proposed Goods and Services Tax (GST) regime, a local think-tank dealing with energy and environment issues has said. “India’s emerging solar sector could see tariffs rise by nearly 10 per cent if current tax exemptions were curtailed in the roll out of the GST,” the Delhi-based Council on Energy, Environment and Water (CEEW) said, citing its study. This comes in the backdrop of solar tariffs falling to record lows last week when major players, including foreign firms, won separate contracts for building a 750 MW solar plant in Rewa, Madhya Pradesh, with bids to supply power at less than Rs 3 per unit. “GST could also impact the pace of the second phase of solar park development for additional 20,000 MW capacity announced in the recent budget,” it said. “The increase in solar tariffs would also vary across states; higher for states such as Rajasthan where VAT and Entry Tax exemptions are currently provided for solar equipment, as opposed to Andhra Pradesh and Gujarat where VAT and Entry Tax exemptions are not provided,” it added.