Green Energy Report Calls for Wind and Hydropower Projects to Receive a GST Rebate

A joint study by the Institute of Energy Economics and Financial Analysis (IEEFA) and JMK Research has outlined a series of recommendations for India to achieve its target of 500 gigawatts (GW) of renewable energy capacity by 2030. One of the key proposals is to reduce the Goods and Services Tax (GST) on hydropower and wind projects to alleviate pressure on developers' finances and enhance affordability. \r

The study suggests lowering the GST on hydropower projects from 18-28% to 12% and on wind projects from 12% to 5%. Additionally, it advocates maintaining a tax rate of less than 5% on the energy storage sector for the next five years. The report also addresses various aspects of the green power sector, including solar photovoltaic (PV) supply chains, utility-scale renewable energy, and rooftop solar. \r

With India adding only 18 GW of renewable energy capacity in FY 2023-24 and sector investments dropping marginally, the study underscores the need for increased efforts to surpass installation targets and suggests measures like extending waivers on inter-state transmission charges and exploring innovative financing structures like InvITs. \r

Furthermore, the study recommends expediting visa approvals for Indian manufacturers planning to expand solar manufacturing plants to avoid disruptions due to socio-political tensions between India and China.