The Goods and Services Tax, also known as GST, is hailed as one of the biggest tax reforms of India and is expected to have a major impact on our economy. The main objective of this reform is to bring uniformity and transparency in the taxation system. In the latest GST council meeting, the agenda was to discuss and fix tax rates for 1211 commodities. The council proposed that few basic items will have no tax while other items will fall under four slabs i.e., 5%, 12%, 18% and 28%. But, what will be the effect of GST on solar?

The GST Council proposed that 18% tax be levied on solar cells and modules while coal was put in the lower tax slab of 5% against its current tax incidence of 11.69%. People related to the solar industry were either expecting complete exemption or a place in the 5% tax slab. However, it appears that the sharp decrease in solar tariffs and equipment cost have convinced the government that this sector doesn’t require any financial incentives. This argument was further strengthened by the renewable energy minister Piyush Goyal, who said, “Solar and wind energy have hit record lows and the industry is now able to stand on its own feet without any support.”

According to Bridge to India, this tax rate of 18% will increase module costs by 18%, inverters by 12%, and service costs by 3% therefore, the overall project cost will go up by about 12%.

Some key points worth pondering upon are:

1. This move will increase the overall cost of the under development and under construction projects. According to industry estimates, the overall project cost may go up by 12~14% which would mean that the developers will have to do with much lesser returns than what they would have bid for. Also, the lenders will also start raising questions on the viability and Debt serviceability of these projects.
2. If the impact of GST is passed on to the consumers, then the DISCOMs will resist the increase of tariff rates in a time when solar tariffs for newer auctions are reaching all-time lows while on the other hand solar sector will have to reanalyze its power tariff to make-up for the increased cost of solar production.
3. The government provides up to 30% capital subsidy for rooftop solar projects  on one side and on the other hand, they have introduced this additional tax on solar panels. It remains to be seen how the Central Government looks at this irony.

It definitely is an unexpected hike which will have a domino effect on the industry and might result in delay of some ongoing projects. This will also have an impact on the rooftop industry which has started showing early signs of finally seeing some growth. This additional cost levied by GST on Solar will act as a deterrent for its quick growth and consumer acceptability.

We expect that the government will quickly take stock of the negative impact of the proposed GST structure on the solar industry and work out a mechanism whereby the growth of solar at this crucial juncture for the industry is not stymied. If the rooftop solar systems (which includes Solar Panels) come under 5% GST across India, as it seems from the paper published by the GST Council, then it is a big step forward and the residential, commercial and industrial consumers should take up this opportunity to Go Solar with a uniform tax rate. However is the effect of GST on Solar, as your personal solar advisors, we hope the move to GST will not be an obstacle to the positive traction that the industry is seeing and the Government will act in the best interest of the consumers, like you, who are interested in going solar.

Visit www.itsmysun.com or Dial 9818507770 for all your queries related to buying a solar system for your home, office or building. Post Update: It is mooted that on June 3, a revised figure could be announced. In the mean time, the Revenue Secretary has tweeted the following:

All solar equipments and its parts would attract 5% GST only https://t.co/Dqcq2IctOQ

— Dr Hasmukh Adhia (@adhia03) May 28, 2017

Gurgaon is the second largest district of Haryana. It has undergone rapid development and construction, especially in last five years and is home to various Multinational Companies (MNCs). It is also a well known IT hub & center of various BPO companies. Undoubtedly, Gurgaon is one of the most developed cities in Delhi-NCR region and has the third highest per-capita income in the country after Chandigarh and Mumbai. With rapid development, the daily energy demand in Gurgaon is rising proportionally every year. This rise in demand can’t be met alone via conventional energy resources and therefore residents, industry owners and commercial buildings are being encouraged to look at renewable means of energy. Among all the available renewable sources, Solar energy has gained widespread popularity in Gurgaon in a very short span of time. Currently, Gurgaon has over 20MW total installed capacity of solar power, a major chunk of which is of rooftop solar. As per Ministry of New and Renewable Energy (MNRE) and National Institute of Solar Energy (NISE), Haryana has an overall solar potential of 5GWp. To achieve its overall target Haryana has a long way to go and Gurgaon definitely has a major role to play. But certainly, with thousands of rooftops across Gurgaon and Haryana ready to be solarized, this potential can soon be transformed into reality. Solar energy has come to be accepted as a major source of energy for both present and future. Especially, in a country like India where it is believed that its coal reserve won’t last longer than 2040-50. Haryana, being in the Northern part of India receives around 300 days of bright sunlight, so the state has a huge potential to generate solar power through the installation of rooftop solar power plants in the State. The Government of Haryana in its Solar Power Policy 2016, has planned to increase its electricity generation via solar means to 3200 MWp by 2021-22 out of which 1600 MWp is supposed to be achieved via solar rooftop PV installations. If we talk about benefits of rooftop solar it saves money, is eco-friendly, assures great returns….this list will go on. But not just this, Gurgaon has many other reasons as to why they should go solar and install solar PV modules over their rooftops. There are numerous schemes, incentives, subsidies and policies which are being provided by the state and the central government in order to encourage the rooftop solar PV installations.

1. You can bring down your electricity bill by 20-30% and you’re assured of the same tariff for at least 25 years. For example, if you have a monthly bill of Rs.5000 by going solar you can save around Rs.1100  from the very first month and not just this in just 25 years you’ll save around 4.4 lac by investing just Rs.40,600. Don’t believe us? See it for yourself via our solar calculator...
2. Going solar is a one-time and risk-free investment with an assured return between 15-30% p.a.
3. If you have a residential property then you are eligible for a 30% subsidy with maximum amount being Rs. 17,070/kWp by Solar Energy Corporation of India (SECI), however, it should be noted that this subsidy is on the first-come-first-serve basis.
4. The state has an effective Net-Metering Policy in place which will be governed by Haryana Government Renewable Energy Department (HAREDA), where the power generated in excess can be fed back into the grid and this way a user can not only save but also potentially make money by going solar.
5. Not only this Value Added Tax (VAT), Electricity taxes, cess, electricity duty, wheeling charges, cross subsidy charges, transmission and distribution charges have been waived off completely for both Ground Mounted and Rooftop Solar Projects.
6. Exemption from External Development Charges, Scrutiny Fee and Infrastructure Development Charges for the time during which the solar power plant is operational. This brings some clarity to those involved in Civil and Construction of newer projects and will now help them incorporate Solar as a part of the project, easily.
7. No clearance is required from Haryana Pollution Control Board and would help in accelerating the pace at which projects are executed.
8. The large projects of MW scale will be provided 100% exemption from payment of fee and stamp duty charges for registration of rent/lease deed for the land required for setting up of these projects.
9. Clearances and approvals would be provided through single window clearance (HAREDA) to the developer (within 60 days after submission of complete application, enclosures, fees including LOI).
10. No processing fee is required for this procedure, however an earnest money deposit of   Rs. 2.00 lacs will need to be deposited (Rs. 200/ kW) which is refundable after signing of the PPA.
11. 25 paise per unit rebate on electricity bill will be given to the users feeding electricity back to the grid.

If all the above-mentioned reasons cannot help you to decide whether you should go solar or not then the reasons given below will definitely change your mind. In order to promote solar rooftop installations and achieve its goal of generating 3200 MWp electricity via solar means, the state government has made it mandatory for some buildings to install 3% to 5% of their present connected load on solar. Firstly, new residential buildings of plot size exceeding 500 sq. yards and housing complexes of plot size exceeding 0.5 acres will have to install 3-5% of their connected load on Solar rooftop systems. Secondly, Commercial establishments and Hospitals which have a connected load greater than 50 kW and lastly, Government and private institutions with a connected load exceeding 30 kW will have to install at least 5% of their connected load on Solar rooftop systems. And those who will fail to abide by the aforementioned laws will have to pay fine between 10,000 and 10 lac. So, what is keeping you waiting still? Go ahead and Go Solar. For any queries related to solar rooftops visit www.itsmysun.com or Dial 9818507770. Image Source

With over 300 sunny days in most locations throughout the year, India is an ideal country when it comes to solar energy. It is because of this tremendous solar potential that the Central Government has set a target of achieving at least 100GW of installed capacity from solar in a bid to move towards renewable sources of energy. While this 100GW is to be achieved in defined proportions from rooftop solar and ground mounted solar, solar as a fundamental technology works identically for both the cases.

How is solar energy produced?

Solar PV (Photovoltaic) modules, which contain cells which are connected in series, are typically placed on rooftops or ground. When the sun rays strike them, they convert sunlight into direct current (DC) electricity. Since our home appliances run on alternating current (AC), it is mandatory to convert this generated DC power into AC. This is achieved by installing an Inverter. The output of the inverter is generally connected to the building mains.

But for large consumers like commercial or industrial buildings, where the solar system size is bigger, say more than 100kW, we may need to step up the voltage to 11kv or 33kV by using a step-up transformer. In this case, the output of the inverter is connected to a step-up transformer and the output from the transformer is connected at the main HT panel (11/33kV). In India, there are generally three types of solar systems that are most common: Grid Connected, Off Grid and Hybrid.

Types of solar systems:

1. Grid connected systems also known as on-grid systems, are connected to the building mains and supply power to the connected load as long as the grid is energized. Priority is first given to the generated solar power and only if the consumption is more than the generation of the solar system, is the grid power sourced. Solar inverters come with a special security feature called Islanding protection that prevents backflow of solar power to the grid, in the event of a grid failure.  If you opt for a grid connected solar system, you are eligible to make an arrangement called Net-Metering. This is a special arrangement with the approval of your local Distribution Company (DISCOM) that allows you to optimize the utilization of generated solar power. With net metering, the extra solar power generated is fed back into the grid, and the customer is accordingly compensated by the DISCOM.
2. Off-grid solar systems are set up independently from the state grid. Here generated solar power can be supplied to the dedicated load with the help of a battery backup system. When generated solar power is more than the load requirement, extra power can be stored in the battery and the same power can be utilized in the event of low generation or during non-generation hours. Off-grid systems generally are less efficient than the on grid systems and are more expensive, requiring the battery to be replaced every 5 years. These are recommended only for areas where there is no power or a very erratic power supply.
3. A hybrid system, as the name suggests, is a combination of on-grid and off-grid solar system. A hybrid solar system has a battery bank with an inverter which can work as an on grid as well as an off-grid system. Generated solar power can be utilized to supply connected load or for charging the battery bank. Just like an on-grid system, any extra power generated by the hybrid system can be supplied back to grid, if the battery is fully charged. In the event of grid failure, just like an off-grid system, the energy stored in storage batteries can be utilized for supplying to the dedicated load connected to the system. Hybrid systems can also have other sources of power such as DG or wind alongside solar and grid.

Let's Talk about the Technology Involved in Solar:

Taking a little deeper dive into technology, we can broadly categorize Solar PV into crystalline silicon and thin film. Crystalline Silicon can be further categorized into mono and multi-crystalline silicon whereas thin film can be categorized as amorphous silicon, Cd-Te (Cadmium Telluride), CIGS (Copper Indium Gallium), CIG (Copper Indium Gallium) etc. The main difference between these is the material that they use as well as their manufacturing processes. Generally, multi-crystalline silicon is used in most solar systems and has a proven generation record of more than 30 years. Multi-crystalline comprises of 80-85% of the overall market share.

If you are considering going for solar at your home, office, industrial or commercial building, there are also a couple of ownership models that you can choose from. You can choose to install and own the solar system (CAPEX Model) or just purchase the solar power from a system owned by a third-party/ individual and you only have to pay for the energy consumed at the rate that has been contractually agreed. In case you wish to own the system, you will have to bear the cost of the system, there are however numerous bank financing options available (RESCO Model). In case you decide to only buy solar power, you will have to lease out your rooftop/ ground area to the third-party that you sign the contract with.

With options galore and cost for going solar coming down substantially in the last few years, there is absolutely no excuse for you to not go solar. The grid tariffs are set to continue to rise over the next several years, and solar gives you the luxury of a low fixed tariff, prompting major savings on your electricity bill, over the next 25 years. Going solar is like discovering a pot of gold, especially for industrial and commercial users. Since solar requires negligible maintenance too, it is as good as planting a tree and enjoying the benefits of it for several years to come. What’s more is that you make your contribution towards reducing the carbon footprint and set an example before everyone prompting the march towards solarization.

image source: energynext