REAR request MNRE to revise the BENCHMARK COST for Rooftop Solar Projects under Solar Subsidy scheme

REAR requests MNRE to consider the Price hike trends of PV Modules & Cells for more than a year & the latest MNRE office memorandum No. 283/3/2018-GRID SOLAR for Imposition of Basic Customs Duty (BCD) on Solar PV Cells & Modules/ Panels and revise the benchmark cost for on-grid Rooftop Solar Projects under Solar Subsidy scheme so that EPC players could get the level playing field.

As per letter by REAR, solar module prices have increased by more than 25% since last one year or more than that. However, the last revision of benchmark cost for Grid-connected Rooftop Solar Photo-voltaic systems was done on 10.08.2021 and the same was released on 27.10.2021 after excluding the GST part from it due to revision in GST on Renewable Equipment by GST Council. In short despite the regular increase in price of PV modules (especially DCR Modules), there was no revision done by MNRE since last 7 months.

Secondly, MNRE once again clarified vide office memorandum No. 283/3/2018-GRID SOLAR that the imposition of Basic Customs Duty (BCD) of 25% on Solar PV Cells and 40% on PV Modules/ Panels from 1.04.2022 is inevitable, which will further increase the price of modules.

Although imposition of BCD is a positive step to scale up the domestic manufacturing in our country and we really appreciate it since this will be helpful for solar module & cell manufacturers but the EPC players will face issue if the benchmark price is not revised on time.

Its not just modules whose prices skyrocketed in the last 1 year but the other equipment and materials also became costlier like inverter , structure, wire, cable and others due to disruption in supply chain because of Covid.

Whether its metal, electricity, transportation everything became costlier which impacted the overall prices of all the equipment. Despite the price rise, the Govt. raises the GST on Module and inverter from 5% to 12% in oct 2021, which further impacted the margins of EPC players working under the subsidy scheme, where the prices they quoted were inclusive of GST. This extra burden is direct loss to the EPC players.

Hence, REAR requests to revise the Benchmark costs for Grid-connected Rooftop Solar Photo-voltaic systems based on market price trends & upcoming imposition of BCD on imports of Solar PV Modules & Cells and other logical parameters and market trends.