With this year’s Union Budget scheduled to be tabled on 1 February 2020, renewable energy industry’s expectations are high and all eyes are on Finance Minister Nirmala Sitharaman making big bang announcements for the sector.
While a majority of the industry stakeholders expect some sort of restructuring in the goods and services tax (GST) for solar and wind energy equipment, others are anticipating a single-window approval system and favourable net-metering regulations.
Industry heads are hoping for a range of announcements ranging from putting an end to central financial assistance (CFA) in solar rooftops, to enabling a regulatory framework for the sector.
“In an ideal world, a clean energy product like solar rooftop should be GST free. If not, at least the current product to service ratio (70:30) in GST calculation needs to be restructured (90:10),” said Pranesh Chaudhary, founder and chief executive officer (CEO) at ZunRoof, a residential solar rooftop company.
He added that a dedicated policy for single-window approval of solar rooftop projects is required for commissionings to be executed at a fast pace. The budgeted expenditure for 2019-20 included Rs 2,479 crore as CFA for capacity addition of 7,500 megawatt projects. The rest – Rs 525 crore – was provided for off-grid and decentralised solar sector.
“There should be an end to central financial assistance in solar rooftops as supplier prices have come down to a level where subsidies should now be eased out,” Chaudhary added.
Industry leaders hope that in this year’s Budget the government should give an impetus to renewables by exempting solar and wind energy equipment and installations from GST.
“The government should announce financing schemes for the renewable energy segment at concessional rates of interest. Concessional credit through green bonds can go a long way in boosting solar capacities and developing green transmission grids,” said Hartek Singh, chairman and managing director, Hartek Group.
He said that a higher budgetary allocation for the transmission and distribution segment and a slew of policy measures to expedite the upgrade of both inter-state and intra-state transmission network for the evacuation of renewables should be considered.