Gyanesh Chaudhary, MD and CEO, Vikram Solar, in an interview.
Gyanesh Chaudhary, MD and CEO, Vikram Solar, in conversation with R Srinivasan.
Green, clean and renewable energy is a part of the government’s agenda this year. This is corroborated by the fact that it is geared up to accomplish 175 GW of clean energy by 2022 via the auction of 1,000 MW of rooftop solar power, Rs 13,000 crore investment in solar parks and a Rs 21,000-crore package to increase local manufacturing of solar panels.
Solar energy beholds tremendous potential in a country like India where there exists a huge demand and supply gap in terms of energy requirements. The other factors being rising levels of pollution and cost. Embracing renewable energy is no more a matter of choice, but rather an indispensability – thanks to the inadequate supply and high cost of coal and petroleum based fuels and the environmental hazard it promotes.
It is imperative for the Modi-led government to provide tax rebates to customers and end-users to make them plug in their energy needs unto solar power backup systems. The government should also reward individuals with concessions and benefits who are making conscious efforts in switching to solar, for their daily power needs. The industry needs innovative technologies and serious policy reforms in order flourish in the long run.
Here are our recommendations to the government for Union Budget 2017.
Service Tax: Keeping in mind the nature of the industry and to bestow more power generation capacity under the renewable energy sector, the government should remove service tax for the installation and commissioning of renewable energy projects.
Income Tax: The current 10 year tax holiday should be extended for another 10 years. This is crucial keeping in mind that the setting-up of any new industrial project inevitably takes a huge amount of time.
Excise Duty: We request the government to completely lift excise duties with regards to machinery, equipment, spare parts etc, deployed in a regular factory set-up, meant for solar energy production projects. Additionally, full exemption from excise for raw materials required for manufacturing solar modules such as tempered glass, back sheet, EVA sheet, solar cells, flat copper wire which are needed for making PV ribbons etc. The same should be applicable for GST.
Accelerated Depreciation: We would recommend that the 80% accelerated depreciation benefit should be reinstated again as it used to be, before.
GST: We would like to recommend to the government that all the benefits and exemptions currently applicable to SEZ units should continue to exist. Energy or electricity produced is currently outside the domain of GST and thus input GST would inevitably result in a higher cost of power. We would like to recommend to the government to levy 100% exempt or zero-rated projects to all input services that are provided to the power sector. All the inputs used for installation and operations of power plants should have zero GST rates.
The government should also look at exempting import duties on components and equipment that are required for establishing solar power plants, with the roll-out of GST.
To promote the indigenous solar industry, the government should introduce more and more incentive schemes and overall reforms. The “Technology up-gradation fund” like in the textiles industry should be introduced in the solar sector as well. The government should also provide interest subsidies for the solar industry.
Favourable policy reforms will not only catapult the government’s Make in India programme but also be a step towards realising the government’s target of electrifying the whole of India by 2020.