Punjab is the latest state to demand a review of its solar energy tax and Chief Minister Amarinder Singh’s government demanded ₹ 4.50 per unit, said two people familiar with the development, requesting anonymity.
The government has noted the decline in solar panels as well as lower borrowing costs and corporate tax cuts following the proposed move. Punjab’s decision is expected to cover the problems of the clean energy sector between logjam regarding contracts with Gujarat and Andhra Pradesh, as well as further delays paid by provinces such as Telangana.
Communication released Tuesday by Punjab State Power Corp. Ltd (PSPCL) reviewed by Mint said: “Electricity levels (renewable energy) need to be reduced to the combined cost of energy @ 4.50 per unit created by PSERC (Punjab Government Electricity Commission 2020-21). at least 15%.” The PSPCL is tasked with providing and producing energy in Punjab.
Questions sent by email to PSPCL officials on Tuesday were not answered until press time.
Reviewing power purchase agreements (PPAs) could undermine the view of the sanctity of legal contracts in India that run the world’s most powerful global system. Also, the payment of electricity tariffs threatens to tarnish the image of the country as a clean energy champion.
“Changing the scoring positions after the PPAs are inked will affect the credibility of the investors,” said the head of India’s largest clean energy company and one of the two people mentioned above.
About ₹4.7 trillion have been invested in India’s renewable energy sector over the past six years, with a target of ₹1 trillion in annual investment by 2030.
“As you know, due to the Government’s restrictions on the movement of people and the operation of commercial centers to control the spread of Covid-19, economic activity has been severely affected throughout India. These limits directly affect all business activities including but not limited to the reduction of electricity demand and the ability of consumers to pay their electricity bills. This has led to significant PSPCL deficits,” according to a PSPCL link.
Source: Live Mint