In a recent development in Rajasthan, all consumers of electricity have now being exempted from Electricity Duty on Solar and will be charged ED only for the units they draw from the grid (refer). This would be valid till March 2018. Ideally, that should have been the case, however, so far that has not been the case pan Rajasthan.
As per our conversation with Mr. Sunil Bansal, General Secretary, Rajasthan Solar Association, ED was being on all units consumed (whether solar or grid), whereas Energy charges were to be paid on ‘net consumption’ from the grid. This notification clarifies that no ED should be charged on units consumed by solar and hence, DISCOMs will now not charge this duty from customers on units consumed from the Solar Plant.
This move comes in advance of GST implementation protecting consumers from price hike expected after GST. There is also this small window for consumers to take as much advantage of solar as they can at least until GST is implemented, the release of which again has been postponed (read here).
This would have a considerable impact on both CAPEX and OPEX projects. On CAPEX, as described above, the move will reduce the overall amount a consumer has to pay ED. Let’s also have a look at the impact this move would have on OPEX projects. Since, developers will not have to pay Electricity Duty on Solar Power, they will not pass on this cost to the customer. Hence, there might be a temporary dip in tariffs- increasing demand and Investor interest too.