Solar firms seen receiving Rs 4,000 crore as regulatory payments: Crisil

Solar power developers are seen to be receiving Rs 4,000 crore as reimbursements against various taxes and duties levied by the central government after the projects were bid out, rating agency Crisil said. The payments would be made to compensate solar power producers for the additional expense they had to bear due to the imposition of the goods and services tax (GST) and a safeguard duty on imports of equipment from China and Malaysia.

The Central Electricity Regulatory Commission has allowed the incremental expenditure due to these taxes to be passed through to consumers under the ‘change in law’ provision. “Counterparties, including the Solar Energy Corporation of India (SECI) and power distribution companies (discoms) such as Maharashtra State Electricity Distribution Company, have started making payments towards GST reimbursements for their respective projects,” Crisil noted.