GST may push up cost of solar power projects – Industry leaders
Some industry leaders said that the goods and services tax may increase solar energy project costs by 12%-18% and generation costs by 40-50 paise per unit, although the government said the new taxation regime won’t have much of an impact on them.
However, officials said even if costs increase, it won’t affect project economics because the additional charges can be passed on to customers.
Mr Ratul Puri, chairman, Hindustan Power Projects, said that “Following GST, solar projects will be about 18% costlier on an average, while cost of generation would go up by around 20%. We have estimated the incidence of GST to be around 23%-25% on various inputs for the segment.”
Mr Piyush Goyal, power, coal, renewable energy and mines minister, said earlier the GST rates would not have much impact on his sectors, that “It would require project developers to go back to banks for additional funding for projects under construction. It might require a minimum of three months to get additional funding, thus delaying projects.”
Mr Sunil Jain, CEO at Hero Future Energies, said solar modules, which weren’t taxed earlier, will have an 18% levy, while inverters – a major component in solar projects used to convert direct current into alternating current – would now be taxed at 28% instead of zero. Taxes on cement and other materials have been increased, he added.
Source : ET