New Delhi: Renewable energy developers and investors are set to save between ₹1 trillion and ₹1.5 trillion following recent cuts in indirect taxes, Union Minister for New and Renewable Energy Pralhad Joshi said on Monday, reports Mint.
The revised Goods and Services Tax (GST) rates, which took effect the same day, lower the levy on renewable energy equipment such as solar cells, biogas plants, and windmill components to 5% from 12%.
Speaking at a national conference on energy storage in New Delhi, Joshi said, “Approximately 248 GW of non-fossil capacity will be added in the next five years. With this GST cut, savings will be around ₹1–1.5 lakh crore. This will be the biggest ever advantage. This is an estimate.”
India has so far installed about 251–252 GW of non-fossil capacity, with nearly 96% of it coming from renewable sources such as solar, wind, and hydro. The government has set a target of reaching 500 GW of non-fossil capacity by 2030.
The tax relief comes as the Centre explores ways to mobilize green finance on a large scale. Mint had earlier reported that the government is in talks to raise about $1 trillion in green funding to accelerate clean energy investments.
Separately, Joshi said the Centre will soon convene a second round of consultations with states on energy storage, the energy transition, and power purchase agreements (PPAs). The talks are especially significant as around 30 GW of renewable projects remain stalled due to developers being unable to secure buyers.
According to earlier reports, the government may allow developers to surrender stalled projects without triggering bank guarantee clauses if PPAs have not been signed.
“Energy transition, energy storage and PPAs are very serious issues, and we are consistently holding talks with states. We have already completed one round, and very soon we will hold the second,” Joshi said at the 6th CII International Energy Conference and Exhibition.
