‘Sizeable’ drop in solar tariffs; Finally, 7.5% import duty scrapped
Solar tariffs fell to Rs 2.72 per unit at state-owned NTPC’s 750MW auction in Andhra Pradesh, sizeable drop from the last high of Rs 3 per unit in Gujarat. Though it’s still well above the record-low (Rs 2.44 per unit) of May 2017.
The winners included Sprng Energy, UK-private equity firm Actis; Ayana, backed by the UK government’s development finance institution CDC; and SB Energy, the joint venture of Japan’s SoftBank, Taiwan’s Foxconn and Bharti Airtel.
In a relief to solar sector Centre has scrapped 7.5% customs duty on solar equipment. Solar modules, worth over $150 million, were held up at ports. The finance ministry reversed the policy last month (Reuters). Domestic manufacturers have sought “anti-dumping” safeguards against cheap Chinese modules (by Trina and Yingli).
Solar developers face 18% GST; New RBI guidelines “adverse” for foreign investments
In a huge impact on future solar tariffs, Maharashtra Authority for Advance Ruling, has ruled that solar developers will be taxed 18% GST on solar equipment (not the concessional 5% tax) because they hire contractors not merely to “supply goods” but “perform service” to put together an entire solar power generating system (SPGS). The 2-member bench verdict of tax commissioners will be a cue to other states, which is likely to increase tariffs at future auctions.
The Reserve Bank of India (RBI) has capped foreign investments in renewable sector, amid an existing fund crunch. FPIs (Foreign Portfolio Investors) can’t exceed 50% investment in a corporate bond; and 20% in a corporate entity. Experts say this will adversely impact foreign investments in renewable projects, as now they will be brought in as equity, forcing companies to pay dividends, and related tax.
Solar spiked 103% in 2018 Q1; Cheap renewables “killing coal”; India to “surpass 2030 target”
Solar is well on course to become India’s “primary source of energy”. Solar power generation in Q1 of 2018 spiked by 103% compared to the Q1 of 2017, according to Central Electricity Authority (CEA).
Solar Accounted for 20% of India’s Total Power Generation in 2017-18
In 2017-18, India produced 25.90 billion units (BUs) of solar power, an increase of nearly 92%compared with 2016-17. India installed record 10GW of solar in 2017-18, the US-based IEEFA said, adding that domestic manufacturing rules will get global manufacturers to set shop in India. In April, Japan’s SoftBank and China’s GCL announced $930m 60-40 joint venture solar module manufacturing plant, the report said.
Crashing renewables prices are leaving coal-based power plants unviable CARE Ratings director told Quartz. Renewables tariffs are lower than the average Rs3.7 per unit coal-based power, as a result, distribution companies (discoms) are not offering long-term PPAs to coal plants. India added more renewables energy than coal last year.
New study says India will achieve its Nationally Determined Contribution (NDC) targets before 2030, thanks to rapidly growing renewables, mainly solar energy. The Council on Energy, Environment and Water (CEEW) study says non-fossil fuels will comprise 48% of India’s power capacity by 2030. However, India will need to bear the cost of renewable integration (mainly grid infrastructure), the study said.
Developers warn of transmission crisis; India falls to “4th most attractive” market; WTO panel to resolve India-US dispute
Renewable power developers said completed projects are facing huge shortage of transmission facilities. There’s “no coordination” between the ministry (MNRE), Power Grid Corporation of India (PGCIL) and Central Electricity Authority (CEA), developers informed the stakeholders meeting. Solar Corporation of India (SECI) is “merrily” holding auctions without realizing there aren’t enough evacuation facilities, they said.
India fell from second to fourth rank in the most attractive countries in renewable investment list “over concerns of threat of import tariffs.” The report by UK accountancy firm Ernst & Young, moved the US up to second place, after China. Germany was ranked third most attractive country in the ranking.
Meanwhile, WTO has set up a panel to resolve India-US renewables dispute over US norms of sourcing products from local markets. India says the norms imposed by 8 US states contradict WTO rules.