Pre-signed PPA-backed solar projects to be exempt from new India customs duties

Image: Lightsource BP.

Solar projects in India with power purchase agreements signed prior to 1 August 2020 will be exempt from steeper customs duties on Chinese component imports, the country’s power minister has confirmed.

India’s Economic Times reports power minister RK Singh as having addressed renewable developers in the country yesterday to inform them that as long as PPAs are signed before the date the new Basic Custom Duty (BCD) comes into force, those projects will be grandfathered into the existing arrangement and therefore exempt from paying it.

Last week India’s government confirmed plans to replace the expiring safeguard duty of 15% with a new, BCD set at between 15 and 20% for solar cells, modules and inverters. It later confirmed that these duties would rise to between 30 – 40% next year, an escalation of attempts to stimulate India’s domestic solar manufacturing sector.

While the potential for such measures to achieve that aim has been questioned – India’s domestic solar manufacturing capacity is limited in comparison to the country’s lofty solar deployment targets – news of an exemption for already-backed projects will be welcome news to developers active in the region.

The exemption would need approval from India’s Department of Revenue, however RK Singh is said to have confirmed that if this was not forthcoming, India’s Ministry of New and Renewable Energy, which Singh also heads, would allow developers to claim reimbursements for duties paid.

The announcement came on the same day that Solar Energy Corporation of India (SECI) confirmed record-low bids within its latest tender, which awarded project rights to seven developers in total. Spain’s Solarpack came in the cheapest at INR2.36/kWh, equivalent to around €28/MWh.

RK Singh welcomed the news on Twitter, arguing that it showcased the country as an attractive investment destination.

11 October 2022
PV CellTech Extra will be held as a series of live webinars and on-demand sessions on 11-13 October 2022. We'll be taking a slightly further forward-looking view at the technologies and roadmaps for new cell architectures set to dominate mass production during 2023-2025 with special emphasis on the potential timelines for technologies beyond the single-junction cell design, including perovskite and hybrid concepts.

Read Next

September 23, 2022
India’s government has approved the second round of the production-linked incentive (PLI) scheme to incentivise domestic solar PV module manufacturing.
September 23, 2022
Solar accounted for half of all global power generating capacity added last year, with 182GW deployed, a 25% increase on 2020, according to a report from BloombergNEF (BNEF).
September 22, 2022
The RE+ tradeshow has been full of hope, excitement but also short-term questions as the industry considers the significance of the IRA.
September 22, 2022
Tech major Amazon has expanded its renewables portfolio globally with 71 new projects with a total capacity of 2.7GW.
September 22, 2022
Wood Mackenzie has repeated warnings that module supply shortages are set to persist until the end of 2023.
September 20, 2022
Private equity firm KKR and Hero Group have invested US$450 million in Indian independent power producer (IPP) Hero Future Energies (HFE) to support its renewables expansion.

Subscribe to Newsletter

Upcoming Events

Upcoming Webinars
September 27, 2022
15:30 AEST (UTC +10)
Solar Media Events
October 4, 2022
New York, USA
On-Demand Webinars, Solar Media Events
October 11, 2022
Virtual event
Upcoming Webinars
October 18, 2022
10am (EDT) / 4pm (CEST)