The maiden budget of the new BJP-led government in India has allotted Rs. 500 crore ( US$83.5 million approx) to set up large-scale solar projects in five states in the country.
The Budget has also proposed a number of tax benefits for solar industry, including lowering of excise duties on backsheets and materials used in their manufacturing, glass for modules, copper wire for cells, modules and machinery and equipment used for setting up a solar energy project.
In addition, copper wire and backsheets will be exempt from customs duty while project equipment and machinery will benefit from a concessionary customs rate of 5 percent.
“We need to maximize our utilization of solar power. The existing duty structure incentivizes imports rather than domestic manufacture of solar photovoltaic cells and modules,” Jaitley said in his budget speech.
In addition to this, the Minister announced the Budget has allocated approx US$66.8 million for solar water pump installations and US$16.7 million for installing sub-1MW plants along the banks of canals.
The northern state of Jammu & Kashmir will benefit from 5GW and 2.5GW solar parks under the guidance of the Ministry of New and Renewable Energy (MNRE). The Ministry will set up a committee to accelerate the projects.
Commenting on the renewable energy proposals in the budget, Kameswara Rao, leader, Energy, Utilities Mining, PwC India, said the proposal for power sector presage a positive direction, to enhance energy security through renewable energy sources with both, large scale projects and distributed projects, and transmission lines connecting green energy corridors to load centers.
Further Rao said the proposals for feeder segregation and distributed solar generation will improve availability and quality of power supply in rural areas. “The resources required for this, however, are far larger than budgeted, and this initial allocation should be used to attract domestic and multilateral funds.”
Commenting on the green initiatives in the budget, Syed Safawi, CEO, Viom Networks, said reducing carbon footprint through stable grid power supply and affordable renewable energy will be the biggest boost to the sector in further lowering emissions and costs.
editor@greentechled.com