Solar energy costs can increase between 25-45 paise per unit (kWh) due to Basic Customs Duty (BCD) in solar cells and imported modules, according to the rating agency.
The Ministry of New and Renewable Energy (MNRE) announcement of BCD implementation in imported solar cells (25 percent) and modules (40 percent) starting April 1 could raise solar energy taxes, it said.
CARE Rating said on Monday that solar prices could increase between 25-30 paise per unit if cells were imported only while costs would increase to 40-45 paise if modules were imported.
The cheapest solar taxes obtained at auctions in 2020 were Rs 1.99 per unit, which could be due to imports and cheaper overseas currencies, analysts said. India has set a target of 175 GW of renewable energy installed, including 100 GW of solar energy by 2022. The long-term renewable energy efficiency target stands at 450 GW by 2030, when solar energy will have a lion’s share.
The BCD will provide impetus to build a self-supporting solar-powered solar-powered production system in India. However, solar manufacturers located in special economic zones (SEZs) had called on the government to release the BCD that works for them.
“If you consider, that 43 percent of solar production units and 63 percent of solar cell production units are found in SEZs, making BCD in SEZ units will affect domestic solar production, ” said Vikram Solar MD Gyanesh Chaudhary.