India aimed to install 40GW of rooftop solar (RTS) power by 2022. However, the nation has installed just 6GW till the end of October 2021
In 2017, India’s Ministry of New and Renewable Energy (MNRE) decided to install 40GW of rooftop solar (RTS) power by 2022. However, India could install just 6GW by the end of October 2021. The 40GW goal is part of India’s ambitious target to achieve 175GW renewable energy (RE) capacity that includes 100GW of solar power by 2022.
Maharashtra had been given a target to install 3.3GW of RTS capacity by 2022. The state could install only 988MW, according to an official of the Maharashtra State Electricity Distribution Company Limited (MSEDCL), the nodal agency for RE in the state.
And it is unlikely that either the state or India will complete its target of RTS by 2022. Manufacturers and experts in RE blame regular policy flip-flops by state and central governments for this probable failure.
Hike in GST for solar system components
On 17 September 2021, India’s Goods and Service Tax (GST) Council decided to hike GST of many components of the solar system from 5 percent to 12 percent. The order, which came into effect from 1 October, will increase RTS’s capital cost by 4-5 percent.
“Government should intimate 5-6 months in advance about proposed changes in policies like in this case GST hike by 7 percent. At least, it should apply old rules for purchases and projects signed before 1 October. Now, I have to pay 4-5 percent more for the equipment I ordered earlier. And my consumers would not pay more according to increased taxes. Here we solar manufacturers lose either money or consumers. At least the GST council should have implemented the changes from the next financial year,” said Amit Devtale, a member of Maharashtra Solar Manufacturers Association (MASMA).
Manufacturers are already bearing the brunt of increased prices of solar components since the COVID-19 outbreak. Hike in diesel and petrol prices have also increased costs of all solar equipment.
“The RTS of 100KW that would cost Rs 35 lakh will now cost Rs 43-45 lakh due to all hikes. Why will consumers pay Rs 8-10 lakh more? They will postpone or cancel their installation. I have lost 3-4 customers since 1 October,” Devtale added.
Government departments are major customers of these manufacturers. Many approved funding for RTS according to earlier prices. If costs of RTS go up suddenly, they do not pay an increased amount, causing losses to manufacturers.
This is not the first time sudden policy decisions have been made without consultation with solar manufacturers and experts.
Inconsistent rules on net …….