The Power Division has announced that there is currently no fixed tax on solar power in the country. According to reports, neither the Central Power Purchasing Agency (CPPA) nor the Power Division has forwarded any summary to the government regarding imposing taxes on solar energy.
According to a notification, the Net Metering Policy, introduced in 2017, is aimed at encouraging investment in alternative energy sources such as solar power. This policy has led to a significant increase in the installation of solar panels, especially among the affluent community, indicating a growing trend towards solar energy adoption.
The government is also having to give subsidies to domestic and industrial consumers, the division said, causing a burden of Rs1.90 in the form of subsidies on the national treasury. The Power Division said 25 to 30 million poor consumers are suffering because of this.
The Power Division has also noted a surge in solarization, raising concerns about the need to balance this trend. It has emphasized the importance of closely monitoring the entire solarization process to ensure its sustainability and effectiveness.
Moreover, it was highlighted that the current solarization tariff may require adjustments, including amendments to rates and regulations, to accommodate the rapid growth in solar energy adoption.
In light of these developments, the Power Division emphasized the importance of reevaluating the existing policies and regulations to support and sustain the growth of solar energy. It has stressed that the entire solarization system is being closely monitored.
The Power Division's notification comes in the wake of media reports that the Central Power Purchasing Agency had proposed to the Ministry of Power imposition of tax on domestic or commercial solar panel installers. It allegedly proposed collection of a tax of Rs2,000 per kilowatt from solar panel installers.
According to the report, Rs2,000 per kilowatt is likely to be collected from a 12 kilowatt solar panel grid. Sources in the Energy Ministry say that this one-time tax will be levied on those installing domestic or commercial solar panels.
