Duty, taxes to lift solar tariffs to Rs 2.6 per unit next fiscal year: CRISIL
Solar tariffs might rise to Rs 2.6 per unit to Rs 2.7 per unit from an all-time low of Rs 2 unit over next fiscal year in the wake of the recent increase in the goods and services tax (GST) on renewable energy equipment, and the proposed customs duty on imported solar modules, according to a press release by CRISIL Ratings.
“High module prices, taxes, and duties are likely to result in project cost inflation for solar developers. Compared with fiscal year 2021, we expect the project cost to increase by 15-20 per cent — Rs 60-70 lakh per MW — on average to Rs 4.2-Rs 4.3 crore per MW next fiscal from Rs 3.6-Rs 3.7 crore per MW seen during the last few fiscal years,” said Ankit Hakhu, director, CRISIL Ratings.
He added that this might make future solar bids expensive at Rs 2.6-Rs 2.7 per unit compared with the lows of Rs. 2.0-2.2 per unit seen during fiscal 2021, for developers to maintain returns of 11-12 per cent.
On the other hand, developers of already bid-out projects are expected to pass on the impact of taxes and duties under the change-in-law clause, said the release.Read More…