The introduction of Goods & Services Tax (GST) has thrown a spanner in India’s clean energy transition, implicitly favouring coal-fired power over solar photo voltaic (PV) generation and incentivising greater take up of coal based sources, a study shows.
The study commissioned by Canada based International Institute for Sustainable Development (IISD) and Council on Energy, Environment & Water (CEEW) says post the roll out of GST, the levelized cost of energy (LCOE) for existing coal-based thermal power stations has fallen by one or two per cent, depending on the share of imported coal used. On the contrary, LCOE for solar PV has risen six per cent. This does not take into account the cost of uncertainty for solar PV developers, who have not known how their projects would be treated under the new taxation system until the recent clarification in December 2018 by the GST Council.
