Severe demand-supply mismatch for solar modules. High customs duty has discouraged imports while adequate domestic capacity is not available. This has also raised prices, and impacted project viability, the industry says. The ease of doing business can be improved further.
India took significant steps to grow the renewable energy sector in 2022. The country has over 170GW of renewable energyinstalled capacity and projects of over 80GW under various stages of development. To achieve the 500 GW target by 2030, India must add 25-30GW in 2023, and subsequent years. To achieve this, the industry expects substantial support from the government.
Issues and concernsSevere demand-supply mismatch for solar modules. High customs duty has discouraged imports while adequate domestic capacity is not available. This has also raised prices, and impacted project viability, the industry says. The ease of doing business can be improved further.
Key demandsA. GeneralLower interest rate funds at 3-4% available to overseas competitors against 8-10% in IndiaProduction Linked Incentive (PLI) scheme for wind turbine generation and deviceIncrease PLI allocation for solar module manufacturing; currently at Rs 19,500 croreIncentives for Provisions for the development of battery storage systemIncentives to promote 2G ethanol, flex fuel hybrid vehiclesB. TaxFavourable tax on income derived from the sale of renewable energy certificates (RECs)Treating RECs similar to carbon creditsLower import duty on wind and electrolytesRemove levy on biofuels is also one of the key demands.Lower duty on solar panels till domestic capacity comes up”Restriction on imports through high tariff barriers on imports (BCD), has resulted in high prices of modules in India, thereby adversely affecting project viabilities and, thus, slowing down growth of the renewable sector. High-interest cost on project financing is also putting extreme pressure on project economies, further affecting the industry severely,” said Surendra Kumar Gupta, CFO, Amp Energy India.
