The new Rajasthan Solar Energy Policy-2019, which will replace the 2014 policy, has introduced the Rajasthan Renewable Energy Development Fund for the promotion of solar energy. Rajasthan is imposing the tax on solar power projects for the funding.
December 10, 2019. By Hemant Arora
Rajasthan has decided to impose an additional tax on all existing and future solar power projects in the range of Rs 2.5-5 lakh per megawatt per year. Rajasthan has proposed a five-fold increase in registration fees in its latest draft Solar Energy Policy. This will increase project costs and renewable power tariffs.
The new Rajasthan Solar Energy Policy-2019, which will replace the 2014 policy, has introduced Rajasthan Renewable Energy Development Fund for promotion of solar energy. Rajasthan is imposing the tax on solar power projects for the funding.
For any solar power project set up in Rajasthan which sells power within the state, the tax would be Rs 2.5 lakh per Mw per year, according to the draft policy, suggested by the government. Same will be applied to captive solar power units. The tax will be Rs 5 lakh per Mw per year, for plants that will sell outside Rajasthan.
As per the draft, the solar power producer will deposit the contribution towards Rajasthan Renewable Energy Development Fund by April 30 in every financial year, without interest and up to June 30 with interest at 9 per cent per annum.
This would increase the project costs in Rajasthan exponentially, according to the experts. A senior sector executive whose company owns a project in Rajasthan says, “If one has to pay such a heavy duty every year, it should entail tariff hike also every year. But our PPAs are already signed and there is no provision for pass-through. This move is similar to that of Andhra Pradesh, and will demolish the investment in Rajasthan.”
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