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The Government needs to come out with a comprehensive policy framework along with some tariff barriers to achieve the 450 GW renewable energy target, according to Saibaba Vutukuri, CEO of Vikram Solar.
“The Government should consider implementing tariff barriers such as BCD/Safeguard Duty/ADD for at least 4-5 years. Offering capital subsidy of 50 per cent for setting up R&D and quality testing infrastructure within the manufacturing units will help build scale,” he said.
“As we inch towards the Union Budget, we are hopeful of targeted initiatives and policies for scaling up domestic solar manufacturing aligned to the 450 GW renewables by 2030 target. There is an immediate need to build a robust ecosystem for indigenous solar manufacturing and making it cost-competitive to achieve the Government’s vision of Atmanirbhar Bharat,” he said.
“We need a comprehensive policy framework encompassing both tariff and non-tariff barriers, long-term financial support and direct incentives to make the domestic solar industry cost-competitive. The finance ministry should consider 5 per cent interest subvention on term loan and working capital, upfront Central financial assistance of 30 per cent on Capex, increase export incentive from 2 per cent to 8 per cent under Remission of Duties or Taxes on Export Product (RoDTEP), which will aid indigenous solar manufacturing,” he said in a statement.
“The industry is awaiting the implementation of basic custom duty (BCD) with exemption to Special Economic Zone (SEZ)-based solar manufacturers and the Production Linked Incentive (PLI) scheme.
“In our view, bringing down Minimum Alternate Tax (MAT) for units operating in SEZs, extending Section 10 AA of Income Tax Act till March 31, 2022, for SEZ-based solar manufacturing unit, preferred interest rate support and priority lending support for manufacturing units and availability of National Clean Energy Fund (NCEF) for expanding solar R&D are critical to augment domestic solar manufacturing,” he said.
Also, super-deductions of 200 per cent of the R&D expenditure for new and clean solar technology development should be allowed. India already offers super-deduction of 200 per cent of the R&D expenditure in emerging areas such as bio-technology, which has led to rapid growth of Indian biotech and pharma companies.
Given the importance of the Electric Vehicle (EV) battery ecosystem in a solar smart nation, he said the Government could consider special funds to be allocated for this development.
“New policy initiatives will encourage economic recovery amidst the pandemic, and provide an enabling ecosystem to make India the global manufacturing hub for solar,” he said.