Centre mulls grandfathering of solar projects bid out before imposition of customs duty

Our Bureau New Delhi | Updated on July 16, 2020 Published on July 16, 2020

The domestic demand for solar cells and modules is expected to grow to 15 GW in 2021   -  REUTERS

Examines possibility of bidding out whole towns for being driven by clean energy

The Ministry of New and Renewable Energy has proposed the grandfathering of all solar power generation projects that are bid out before the enforcement of 20 per cent customs duty on solar cells.

Speaking at a Renewable Energy Manufacturing Conference organised by the Confederation of Indian Industry (CII), Minister of State (Independent Charge) for Power and New and Renewable Energy, RK Singh said: “I am aware of the concerns of the project developers and will be meeting the Ministry of Finance regarding the same. We have proposed grandfathering of solar projects bid out before the imposition of basic customs duty.”

If the proposal is accepted, solar energy equipment imported for projects that have been bid out till August 1, 2020 —the date from which 20 per cent basic customs duty is to kick in — will be exempt from the duty.

The duty is going to be imposed on solar cells, modules and inverters to discourage imports from other countries and boost domestic manufacturing.

“The developers must try to create jobs here and not in other countries by imports. The people of India are ready to pay 2-3 paise more for power if it is generated from Indian equipment,” Singh said.

‘Clean’ towns

Speaking about other initiatives the Centre is planning, Singh said: “We are evaluating bidding out whole towns for being driven by clean energy. The bidder will be allowed to generate renewable power from all sources such as wind and solar. Buses in these towns will be run through clean energy, either hydrogen or through batteries. The only condition is that the cost of running needs to be equal to that of diesel buses.”

Speaking at the event earlier in the day, Sumant Sinha, Chairman and Managing Director, ReNew Power, said his company will invest ₹1,500-2,000 crore in setting up a solar cell and module manufacturing capacity. The unit is expected to initially have a 2GW manufacturing capacity, and ReNew is in discussion with various States to set it up, a company statement said.

“The domestic demand for solar cells and modules is expected to grow to 15 GW next year. Domestic manufacturing of modules and cells within the country will help renewable energy players reduce their dependence on imports from China, which currently accounts for almost 80 per cent of the world’s module production,” Sinha said.

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Published on July 16, 2020
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