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GST Rate Schedule for the Solar Industry

The past few months were marked by substantial speculation around how GST will affect the solar industry. Sunkalp Energy had run a few analyses which had indicated a 12-15% increase in the cost of solar. Further we had made some recommendations for including solar and components in ‘zero’ lists.

This Friday the Government released final Goods and Services Tax (GST) rates under the new indirect tax regime proposed to be rolled out from July 1. Below GST rates will be applicable on solar goods:

  • Solar Panel -5%
  • Solar Cells -18%
  • Solar Batteries-18/28%
  • Solar Inverter -5%
  • Solar PCU-5%
  • Solar Structure-18%
  • Solar wires-18%
  • Solar I&C-28%
  • Solar Power pack-5%
  • Solar water heater-5%
  • Solar street light-5%
  • Solar pump-5%

GST Schedule

Considering that many states including Rajasthan, Uttar Pradesh and Haryana had so far exempted solar equipment including solar panels from VAT, the new GST rates will have a direct cost impact on the consumers.

In fact, many EPC companies and distributors alike, had opened offices and warehouses in the states where VAT exemption could be claimed in a bid to reduce the cost per Wp for their customers.

More significantly, cost of solar panels, which contribute to up to 60% of a solar project’s cost is set to increase with a GST rate of 18% on solar cells, with little visibility so far on input tax benefit on the import of solar cells.

Generally, for grid synchronous solar plants, I see the cost increasing by up wards of 5 Rs/Wp. This will likely cause a commissioning rush before July 1st, akin to the one we see in March each year.

More worrisome is the impact that these GST rates will have on RESCO/ PPA projects. Will developers still be able to viably set up solar plants and sell electricity at the aggressive tariffs given that their installation costs are set to rise?

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Two Point Four Four- Bhadla Solar Park Results

We look on in disbelief as the results of aggressive bidding for the Bhadla Solar Park were announced today. ACME and SoftBank Energy won the tender to supply electricity at Rs. 2.44/ kWh and Rs. 2.45/ kWh respectively. The results came after open bidding that spanned two days and thirteen participants that included Hero Solar and Renew Solar Power.

Solar tariffs are in a state of free fall, these results come on the back of the widely celebrated results of Rs. 3.3/ kWh for REWA Solar Park in Madhya Pradesh, barely 4 months ago.

At Rs. 2.44 per unit, electricity from the Bhadla Solar Park will be 25% cheaper than that from coal power plants.

Only one question remains to be answered: Is this sustainable or a bubble waiting to burst?

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Mono PERC manufacturing

PERC: New Solar PV Technology Explained

Why are we talking about PERC Solar?

Several module manufacturers are introducing new lines of PERC solar modules which have 1% or more, higher efficiency than conventional modules. While conventional solar cells have now reached their physical efficiency limits, this new PERC architecture allows manufacturers to increase the module efficiency.

PERC Benefit

The above graphic shows how PERC solar has an edge over conventional mono modules. (more…)

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Piyush Goyal Dharmendra Pradhan

India’s Energy Diplomacy

In an enlightening discussion today at the Energy Conclave 2017, Piyush Goyal (MoS Power, Coal & RE) and Dharmendra Pradhan (MoS Petroleum & Natural Gas) talked about power being a significant part of India’s diplomatic efforts.

Bhutan and Nepal have tremendous potential for hydro power, but they do not have enough consumption or load”, said Mr. Pradhan. Thus these countries are unable to economically develop hydel power plants just to cater to their own consumption (more…)

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Crystal

Perovskite Solar: The Future Crystal?

Why are we talking about Perovskite Solar?

From France to Australia, breaking efficiency records in labs around the World, Perovskite Solar is the poster child for solar research today. Efficiency data from NREL tables, which represents global lab results, shows that this technology has grown most rapidly in demonstrated conversion efficiency amongst all emerging and thin-film technologies. Given that perovskite solar can be fabricated simply by spin coating, based on the principle of depositing liquids, the technology also promises to have low manufacturing costs. (more…)

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