Wed. May 22nd, 2024
Govt Reject Report of Fixed Tax on Solar UsersGovt Reject Report of Fixed Tax on Solar Users

Last Updated on: 27th April 2024, 10:56 pm

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The Power Division has recently announced that there is currently no fixed tax imposed on solar power within the country. Reports indicate that neither the Central Power Purchasing Agency (CPPA) nor the Power Division has submitted any proposal to the government regarding the implementation of taxes on solar energy.

Subsidy Burden and Consumer Impact

Impact of Net Metering Policy

According to an official notification, the Net Metering Policy, introduced in 2017, aims to promote investments in alternative energy sources, particularly solar power. This policy has spurred a notable surge in the installation of solar panels, especially among the well-to-do demographic, indicating a growing inclination towards solar energy adoption.

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Subsidy Burden and Consumer Impact

The government has been providing subsidies to both domestic and industrial consumers, resulting in a burden of Rs1.90 billion in subsidies on the national exchequer. The Power Division has highlighted that this subsidy burden is impacting around 25 to 30 million economically disadvantaged consumers.

Concerns and Monitoring of Solarization

Additionally, the Power Division has observed a significant increase in solarization, prompting concerns about the necessity to maintain a balance in this trend. It underscores the importance of closely monitoring the entire solarization process to ensure its sustainability and effectiveness.

Tariff Adjustments and Policy Reevaluation

Furthermore, there has been a suggestion that the current tariff structure for solarization might necessitate adjustments, including revisions to rates and regulations, to accommodate the rapid proliferation of solar energy adoption.

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Call for Policy Reevaluation

Given these developments, the Power Division underscores the critical need to reassess existing policies and regulations to bolster and sustain the growth of solar energy. It emphasizes that rigorous monitoring of the entire solarization framework is being conducted.

Proposal for Solar Panel Taxes

The recent notification from the Power Division follows media reports suggesting that the Central Power Purchasing Agency had proposed to the Ministry of Power the imposition of taxes on residential or commercial solar panel installations. Allegedly, the proposal included the collection of a tax amounting to Rs2,000 per kilowatt from solar panel installers.

Estimated Impact of Proposed Taxes

According to sources within the Energy Ministry, this one-time tax is likely to be levied on individuals or entities installing residential or commercial solar panels, with the estimated collection of Rs2,000 per kilowatt from a 12-kilowatt solar panel grid.

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