Solar power tariffs may rise next fiscal on increased taxes, says report

Following the recent hike in taxes on critical components and the proposed customs duty on modules, solar power tariffs may rise to Rs 2.6-2.7 per unit from an all-time low of Rs 2 per unit, next fiscal, warns a report.

The government recently increased GST on critical components of a solar project such as photovoltaic cells and modules from 5 per cent to 12 per cent with effect from the beginning of this month.

This has increased the total taxation on a solar project from 8-9 per cent to 12-13 per cent and will more than double to 30 per cent when customs duty of 40 per cent on imported solar modules kicks in from April 2022, Crisil said in a report on Monday.