Green Energy Report Calls For GST Cuts On Hydropower, Wind Projects

(MENAFN- KNN India) New Delhi, May 22 (KNN) A study by the Institute of energy Economics and financial Analysis (IEEFA) and JMK Research has recommended a series of measures to help India reach its target of 500 gigawatts (GW) of renewable energy capacity by 2030.

One of the top suggestions is to slash the Goods and Services Tax (GST) on hydropower and wind projects. The report suggests lowering the GST on hydropower project components from the current 18-28 percent to 12 percent, and reducing the GST on wind projects from 12 percent to 5 percent.

The study also calls for maintaining the tax rate on the energy storage sector below 5 percent for the next five years.

Specifically, it recommends applying a 5 percent lower GST rate to the sale of Battery Energy Storage Systems (BESS) integrated systems and BESS components for the next five years.

Other key recommendations include extending the 100 percent exemption in 'inter-state transmission system' (ISTS) charges until 2030, scrapping reverse auctions for wind tenders, and introducing financing structures like an InvIT to address challenges related to financing in open access.

The report highlights the need for accelerated efforts, as India added only around 18 GW of renewable energy capacity in the fiscal year 2023-24, while investments in the sector declined marginally from the previous year.

To tackle underutilised power exchange markets, the Ministry of Power has been advised to consider a pilot power exchange-based Contract for Difference (CfD) project for a small renewable energy capacity.

Additionally, the government has been urged to expedite the visa approval process for skilled Chinese technicians, as acquiring visas is currently challenging due to ongoing socio-political tensions between China and India, hampering the expansion plans of Indian manufacturers to set up solar manufacturing plants.

(KNN Bureau)

MENAFN22052024000155011030ID1108246022