Weekly Power Sector Round up: 23rd October 2021

Duties and taxes may lift solar tariffs to Rs 2.6/unit next fiscal: CRISIL

Solar tariffs may rise to more than Rs 2.6/unit from an all time low of Rs 2/unit over the next fiscal in the wake of the increase in the GST on renewable energy equipment and the proposed customs duty on imported solar modules, according to CRISIL Ratings.

“High module prices, taxes, and duties are likely to result in project cost inflation for solar developers. Compared with fiscal year 2021, we expect the project cost to increase by 15-20 per cent — Rs 60-70 lakh per MW — on average to Rs 4.2-Rs 4.3 crore per MW next fiscal from Rs 3.6-Rs 3.7 crore per MW seen during the last few fiscal years,” said Ankit Hakhu, director, CRISIL Ratings.

The government has increased the GST on critical components of a solar project such as photovoltaic cells and modules from 5 per cent to 12 per cent with effect from October 1, 2021.

India won’t commit to net-zero goal at the UN climate conference (COP26)

India is unwilling to commit to the 2050 net-zero goal and will tell western nations to go for carbon neutrality much before the mid-century, considering their own historical cumulative emissions.

India may, however, make some additional commitments or announcements, factoring in its overachievement of 2030 pledges and ambitious renewable energy goals of 450 GW, and align it with the 2047 timeline, coinciding it with 100 years of independence.