India has scrapped excise duty for off-grid rooftop solar systems.
The Ministry for New and Renewable Energy (MNRE) has said that equipment for off-grid rooftop PV systems is now exempt from excise duty, effective 28 November.
The tax exemption was granted after developers notified the Ministry of Finance of the need to bring down the cost of off-grid solar installations, to also bring down the cost of generation and increase off-grid rooftop solar deployment.
MNRE said the exemption would encourage domestic solar manufacturers to supply the burgeoning off-grid solar market in India, and that it believed there was sufficient domestic manufacturing capacity to meet demand.
The tax exemption is one of many policies and mechanism being used by the government to boost solar generation. India is looking to transform its energy infrastructure as the government seeks to bring electricity to all of its 1.25 billion citizens, and solar is seen as a key element in realising this vision.
Also in support of rooftop solar, India’s Ministry of Environment and Forests has mandated rooftop solar to be installed at thermal power stations. New power stations will have solar rooftop installations included in construction. After feasibility studies, a three-year rooftop solar target will be implemented for thermal power stations.
According to the Press Information Bureau, MNRE, also proposed today to promote rooftop solar systems across the country by implementing the ‘Grid Connected Rooftop and Small Solar Power Plants Programme’ for all 1kW-500kW solar rooftops. The programme will be financed by Central Financial Assistance, with a tariff of INR24 per watt generated.
MNRE has also sought a €1 billion loan from German development bank, Kreditanstalt fur Wiederaufbau (KfW) to provide loans for off-grid rooftop installations. The proposal is currently under consideration by the Department of Economic Affairs.
