Fiscal and financial incentives

Various other fiscal incentives for renewable energy sector include – 80 per cent depreciation in the first year of the installation of the project. Exemption/reduction in excise duty. Exemption from Central Sales Tax, and customs duty concessions on the import of material, components and equipment used in renewable energy projects. Concessions under income rules. Up to 100% foreign equity participation in joint ventures qualifies for automatic approval. Foreign investors are encouraged to set up renewable energy power projects on Build, Own and Operate (BOO) basis. A 10 year tax holiday allowed for renewable energy power projects. Financial support for R&D in renewable energy projects. Customs duty concession available for renewable energy spares and equipment, including those machinery required for renovation and modernization of power plants. Excise duty on a number of capital goods and instruments in renewable energy sector has been reduced or exempted. Capital subsidy to renewable energy projects depending upon the type and size. Concessional loans to renewable energy projects.

• Accelerate the renewable energy market by offering various incentives to developers for making renewable energy power more affordable and competitive.

Basic design depends on the type of technology and barriers that need to be removed through such incentives.

Need to undertake proper due-diligence including consultation with industry players before designing effective incentive schemes. This would help increase the efficacy of various instruments from short to long-term.

Enabling incentive structures have been able to attract investment in renewable energy sector.