A major issue that must be addressed and is unique to India currently, is the challenge of taxation –after the implementation of GST. Most industry players are still unsure of the precise rate to be applied for EPC services. Additionally, different states current levy varied tax rates that range from 5to 18 percent GST on these services that further complicates the situation
February 08, 2019. By News Bureau
Innovation in the contemporary world has helped in making rapid progress in digital transformation as industries move closer to Industry 4.0. Powering these innovations sustainably and affordably, hence, has become an important aspect to be considered in order to provide adequate support to burgeoning industries. In India, the power sector has made great progress in this endeavor, with sources of power generation ranging from conventional sources such as coal, lignite, natural gas, oil, hydro and nuclear power to viable non-conventional sources such as wind, solar, and biomass.These advances have helped meet the current demand for electricity in the country, which is only set to increase as the years go by. Thus, there is a pressing need for massive additions to the installed energy generation capacityurgently.
Fossils today, solar tomorrow
A large part of the energy generated today comes from fossil fuels, which are non-renewable in nature. The constant extraction of natural resources over and above their capacity has made the search for alternative sources of energy crucial. Some of the factors to keep in mind over this search are the requirement of clean energy resources, a focus on commercial and industrial customers and connected energy ecosystem for a sustainable and reliable energy infrastructure.
Among the multiple options available, solar power has emerged as a viable option that is beingtapped as an alternative energy source. One of its distinct advantages is the immense power generation capacity that it possesses. An example of this is the estimation that 2880 trillion light bulbs can be powered for one hour through solar energy. Additionally, the continuous supply of energy it provides can be channeled to meet all captive electricity needsand move closer to a sustainable energy ecosystem. India has shown the results of effective solar power utilization in the recent past to attest to these advantages and in fact is leading on this front globally.
The Indian scenario
India’s tropical location affordsthe required sunlight for solar power generation. Until sometime back, one of the major challenges to solar power generation used to be the high input cost. This scenario has transformed drastically over the last 10 years with affordable equipment and systems now readily available across the globe. However, as solar power is ramping up rapidly, extensive research and development is required to ensure reliable and quality systems that meet the 24- hour power requirement of the largest consumers. The government has been actively supporting the industry with its ambitious renewable energy target of 175 GW by 2022, with over100 GW through solar energy, following the historic Paris Agreement in 2015. Between 2014 and 2018, India increased its solar-generation capacity eight times from 2,650 MW to over 22GW, a feat that many sceptics had deemed impossible. Today, the Indian solar power sectorhas become a Rs 30,000 crore industry and has shown incredible progress. With the government’s support and a thriving industry ecosystem, the country became the world’s third-biggest solar market overthrowing Japan in 2017.
Despite these successes, the solar power industry still faces several challenges that must be overcome to ensure its continued survival and efficiency. Primarily, the core concern for the industry relates to site related conditions such as energy generation during non-sunshine hours. Despite the growing popularity of battery-basedenergy storage systems across the world, the technology has not really taken off in the Indian market – a challenge that must be addressed for the sector to progress. With integration of such storage systems, solar power plants can serve as a stable and comprehensive source of power for the needs of the fastest growing economy. Another concern that must be addressed,and urgently,is the quality of equipment that goes into a solar power plant and the workmanship involved in the construction of the plant. The attractive cost-per-unit for commercial and industrial customers only works out if the solar plant survives and performs throughout its useful life. Therefore, it is critical that the industry ecosystem ensures the best possible quality standards when supplying to and executing solar power plants and that customers take cognizance of this when selecting a service provider. The government’s initiative in mandating BIS certification for solar panels is an encouraging first step in this direction.
A final issue that must be addressed and is unique to India currently, is the challenge of taxation –after the implementation of GST. According to a Mercom India report, most industry players are still unsure of the precise rate to be applied for EPC services. Additionally, different states current levy varied tax rates that range from 5to 18 percent GST on these services that further complicates the situation. In such a scenario, the government must intervene in order to have a uniform tax code for solar industry to enable growth of solar power and prevent the deprivation of much required capital for all relevant investors.
Energy generation is a key component to move towards economic growth and hence, organization and governments alike must look to focus on supporting the industry across all endeavors. Renewable energy sources such as solar energy must be at the core of these efforts and the focus for 2019-20 for all organizations must be on strengthening their clean energy portfolio. Solar power and its ilk hold the potential to create a much more conducive environment in the future.The growth of this industry can be further amplified with the help of clear and unambiguous policies with a strong focus on quality and innovative technologies to enhance the resilience of clean sources of energy.
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