Solar Components exempted from Duty in India

Indian solar producers who have been decimated by the severe global oversupply and price fall, have finally something to cheer about. The finance minister in his budget has granted excise duty exemption to imports of parts used in manufacture of solar panels. Copper wire, glass and EVA sheet will not have duties imposed on them, which will lead to solar panel makers becoming more competitive as their cost base is lowered. Prices of solar equipment which is used to make the solar panels is also going to fall, as excise duty exemption is also extended to them.

India’s solar manufacturing industry is highly dependent on imports of parts and equipment. Most of the technology is still found outside the country. Without a big base of manufacturing, many of the ancillaries that go into making a panel such as copper wire and glass has not developed fully. Though these exemptions will help, they will not make the solar producers competitive, till these parts are made in India. This will reduce the logistics cost and also help leverage low cost Indian labor. The lowering of the duties is a good step in encouraging Indian manufacturing, but a lot more needs to be done. To lower costs to a global standard, the manufacture of these components has to be done in India. Having the complete supply chain in one place is the only way to become competitive for an industry, which has become more or less commoditized.

TOI

Components of solar-powered products will become cheaper by at least 5-7%, thanks to finance minister Arun Jaitley’s announcement to boost the solar sector.

Jaideep Malaviya, CEO, Malaviya Solar Consultancy, said a company setting up a 100 MW solar plant would now be able to save around Rs 50 lakh because of the several duty and tax reduction and exemptions relaxations. “The excise duty exemption on machinery and equipment required to set up solar power plants will be a huge boost to solar power component manufacturers,” Malaviya said.

The finance minister has announced excise duty exemption for solar tempered glass used in the manufacture of solar photovoltaic cells and modules, flat copper wire used to manufacture photovoltaic ribbons, EVA sheets and solar back sheets and other specified inputs used in the manufacture of solar cells. He also announced exemption for machinery and equipment required for setting up solar power plants. It is expected that solar thermal heaters will also become cheaper.

“Today, mostly all solar equipment is imported. Continued import will be a drain on India’s foreign exchange if solar energy is to be leveraged on a largescale. If we promote and incentivise local manufacturing, it will generate employment and reduce emphasis on imports. Thus this is a step in the right direction,” said Sulajja Firodia Motwani, vice chairperson of Kinetic Engineering.