New Delhi, 17 September (IANS). The tax rate on renewable energy in GST reforms has been reduced from 12 percent to 5 percent. Due to this, the price of rooftop solar system up to 3 kW can be reduced from Rs 9,000 to Rs 10,500. This information was given by the Ministry of New and Renewable Energy on Wednesday.
This step will make it easier for millions of families to adopt solar energy and the cost of rooftop solar system will also be reduced under the Prime Minister Surya Ghar Free Power Scheme.
This step of the government will make power generation more economical than clean energy projects and will directly benefit homes, farmers, industries and developers.
The ministry said that for example, the capital cost of a utility-level solar project, which is usually about Rs 3.5-4 crore per megawatt, will reduce the cost of Rs 20-25 lakh per MW due to GST improvement.
Similarly, GST reforms can reduce the cost of 500 MW solar parks below Rs 100 crore.
The reduction in GST is expected to reduce the level of renewable energy, which will reduce the financial burden of power procurement on the distribution companies (discoms).
This can save Rs 2,000-3,000 crore annually in power procurement costs across the country. The final consumers will get the benefit of better access to cheap clean electricity, which will strengthen the long -term stability of India’s power sector.
Under the PM-Kusum scheme, farmers will also benefit greatly. A 5 HP solar pump costing about 2.5 lakh rupees will now be about Rs 17,500 cheaper. On the scale of 1 million solar pumps, farmers will collectively save Rs 1,750 crore, which will make irrigation more economical and durable.
Reduced the cost of low GST modules and components by 3-4 percent will increase the competitiveness of renewable energy equipment manufactured in India, which will support ‘Make in India’ and ‘self-reliant India’ initiatives.
India aims at 100 GW Solar Energy Manufacturing Capacity by 2030, and this improvement will encourage new investment in domestic manufacturing centers.
The ministry said, “Given that each gigwat manufacturing capacity creates around 5,000 employment, this improvement can promote 5-7 lakh direct and indirect employment in the next decade, which will strengthen India’s clean energy industrial ecosystem.”
GST cuts will not only reduce the cost of energy, but will also increase the confidence of investors, allowing power purchase agreements to be rapidly signed and projects can be started quickly.
-IANS
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