As per the Union Budget 2021 government is focusing towards helping solar cell manufacturing units. Press release of Budget 2021 quoted “The Finance Minister said that a phased manufacturing plan for solar cells and solar panels will be notified to build up domestic capacity.  She announced raising duty on solar inverters from 5 per cent to 20 percent and on solar lanterns from 5 per cent to 15 per cent.”

Understanding the chronology of the government steps indicates that the first phase of the manufacturing plan may include Basic Custom Duty (BCD) on importing solar cells & modules. Increased tax on solar equipment will promote use of domestic equipment, after temper glass, solar inverters & lanterns, solar cells will be stressed.

“In no way can we come to the conclusion that BCD will not take place,” said Ministry of New and Renewable Energy Secretary Indu Shekhar Chaturvedi during a post-Budget media briefing on Tuesday.

The budget clearly stated the increased tax on import of solar inverters & solar lanterns to encourage the domestic manufacturers. BCD on import may impact the fast pace of solar power development in the country. It will directly affect the rooftop solar market, solar panel prices may hike. However, encouraging domestic solar cell manufacturing will provide a solution but things will take time.

Also Read: Budget 2021 Highlights for Renewable sector