GST reduction on renewable energy to save up to Rs 1.5 lakh crore for investors: Union Minister

GST reduction on renewable energy will save up to Rs 1.5 lakh crore for investors till 2030, Union Minister Pralhad Joshi said on Monday, September 22.

The comments from the Union New and Renewable Energy Minister assume significance as Monday is the first day of implementation of the Goods and Services Tax reduction. In a bonanza to consumers, the GST Council, comprising the Centre and states, decided to reduce tax rates on goods and services, from September 22, the first day of Navratri.

The GST cut will give a significant boost to India's ambitious target of having 500 GW of renewable energy by 2030. Talking to reporters on the sidelines of the CII 6th International Energy Conference, Joshi said, "I thank Prime Minister Narendra Modi for cutting GST on renewable equipment from 18% to 5%, especially on the occasion of the Navratri festival."

He further said this will save Rs 1 lakh crore to Rs 1.5 lakh crore for investors till 2030.

According to the Ministry of New and Renewable Energy, given that India plans to add around 300 GW of renewable energy capacity by 2030, even a modest 2-3% cost reduction can free up Rs 1–1.5 lakh crore in investment capacity.

Rooftop Solar under PM Surya Ghar: Muft Bijli Yojana will become cheaper by Rs 9,000–10,500 per 3 kW System. Farmers under PM-KUSUM are expected to save Rs 1,750 crore on 10 lakh solar pumps with the GST cut, the ministry estimates show.

Earlier, addressing the conference, Joshi said at the COP26 in 2021, when Prime Minister Narendra Modi first laid down the roadmap for the country's clean energy journey, he set a target that many thought was impossible: 500 GW of non-fossil fuel capacity by 2030.

"Today, I am proud to say that we have already achieved over 50% of our installed power capacity from non-fossil fuel sources, and we have done it five years ahead of the timeline. We have also crossed 50% of the 500 GW target (252 GW)," he said.

He informed that nearly 20 lakh homes have benefited from solar power under the PM Surya Ghar: Muft Bijli Yojana. He further said in a recent clean energy auction, Madhya Pradesh secured India's lowest-ever price for solar power with battery storage at just Rs 2.70 per unit. He said the transmission system has been planned for about 537 GW of renewable energy capacity by 2030.