Making solar power more expensive!

It comes as a shock that the government has proposed an import duty on solar panels in this year's budget. At a time when we are talking about placing greater emphasis on renewable energy to meet our energy demands in a sustainable way, it is strange that the government should want to impose duties on panels used to build solar energy networks that represent one of the cleanest forms of power. From a zero duty scenario, this sector will now have to face 10 percent customs duty, VAT and other taxes. 

Thus, instead of encouraging more entrepreneurs and businesses to develop solar power systems, measures are being thought of that will translate into being disincentives for this sector. The move will, as this paper reports, hike up the costs which in turn, may dissuade entrepreneurs from solar energy ventures that have already been planned and are being set up. This includes connecting solar power plants to the national grid, plants for irrigation needs and rooftop systems.

Bangladesh has the largest solar home systems benefitting around three crore people; many live in remote areas that have no other electricity connection. This has been possible mainly because of the zero import duty. Where we have made such huge progress in adopting a clean energy source, where is the logic in impeding it by taxing the basic component of the system?

While it is important to protect the interests of local producers, we must keep in mind the fact that the cost of existing and potential solar power systems would become very expensive to build, if such a tax was imposed. We hope that good sense will prevail and this proposal is not followed through.