On Wednesday, September 17, the Ministry of New and Renewable Energy stated that the GST2.0 reforms with respect to the renewable energy value chain from 12% to 5% will make electricity cheaper due to which farmers save more after new rate cut
How will tweaks in GST2.0 affect the renewable energy value chain?
Furthermore, it mentioned that the tweaks of GST2.0 with respect to the renewable energy value chain will reduce the cost of clean energy projects, making electricity cheaper and benefiting many, including households, farmers, industries, and developers. In addition, it highlighted that the reduction through GST 2.0 reforms is predicted to decrease the levelised renewable tariffs. Consequently, it will lessen the financial burden of electricity procurement for distribution companies (DISCOMs). Now, this will turn into annual savings of Rs 2,000–3,000 crore in power procurement costs.
Rooftop Solar systems will become more affordable now
When it comes to rooftop solar systems, it said that a typical 3 KW rooftop system will now become more affordable by around Rs 9,000 to 10,500. Apparently, it would make it easier for lakhs of families to adopt solar energy and escalate large-scale uptake under the PM Surya Ghar: Muft Bijli Yojana. On 10 lakh solar pumps, farmers could save around Rs 1,750 crore, which will instantly make irrigation more affordable and sustainable.
GST 2.0 reforms strengthen Make in India and Aatmanirbhar Bharat initiatives
Lower GST2.0 reforms will improve the competitiveness of Indian-made renewable energy equipment by decreasing module and component costs by 3–4%, ultimately strengthening the Make in India and Aatmanirbhar Bharat initiatives. As India has set a target of 100 GW of solar manufacturing capacity by 2030, the GST 2.0 reform will boost new investments into domestic manufacturing hubs.