In a bid to make grid connected solar power plants more competitive, the government has decided to exempt procurement of material and components required for setting up of ‘grid connected roof top’ solar PV power plants from Custom and Excise duty.
The exemption, however, would be applicable to a minimum capacity of 100 KW single solar project as well as for a ‘bundled solar project’ of 100 KW, the Ministry of New And Renewable Energy announced. “It has been decided to give Customs and Excise duty exemption certificates, with immediate effect to all roof-top solar power projects up to a minimum capacity of 100 MW,” a notification issued by the Ministry stated.
The exemption would not be applicable for off grid plants and only ‘on grid’ projects can avail the benefits. The consumer may opt for net metering or may enter into a ‘PPA (Power Purchase Agreement) with Utility/discom’, the Ministry said.
Solar power developers have been demanding customs and excise duty benefits to end users for installation of solar plants so as to bring down the cost of grid projects and cost of solar power generations.
“It was under consideration of the Ministry for some time. After examining various issues involved with the exemption with concerned ministry, it was finally decided on April 11 to grant exemption with immediate effect,” said a senior officer of the Ministry of New And Renewable Energy.