Slowly, but surely, clarifications are coming in about the duties and taxes that are there to stay and those that would no longer be valid. In a recent notification on 21st August 2017, Ministry of New and Renewable Energy clarified that Concessional Custom Duty Certificates (CCDC) will continue to be issued. It will be issued on the Bill of Materials to be imported for setup of the Solar Plant (refer).
The process to be followed for acquiring CCDC may be viewed here. The application for CCDC may be submitted via this link. The move to keep CCDC has led to the industry taking a sigh of relief in the midst of projects that EPCs have acquired but have not yet started construction for. Although, most industry members would agree, the delay in these clarifications has led to considerable delay in project execution as well, meaning costs.
Yes, the industry has progressed. Solar Energy is booming, it’s the future! We just hit a record low tariff of INR 2.44 for Solar Energy- proving that grid electricity won’t be here for long. Yet, there is something extremely important that has lacked in the industry: Efficiency. It’s ironical that we speak of ‘energy efficiency’ when the industry is not able to deliver efficiency in work completion itself.
Sometimes, it’s about approvals and sometimes about lagging timelines for equipment delivery or high prices offered by equipment suppliers. Of course, we all get bothered by it, yet, we have not been able to address this issue since our hands had been tied. After a lot of thinking and brain-storming, we came up with an idea which we thought may address part of the problem. (more…)
The Ministry of New and Renewable Energy recently put out a public notification which highlights the complaints received by customers about EPC Companies and State Nodal Agencies (refer). This comes hugely in favor of end customers be it Commercial or Domestic.
It clearly highlights the complaint and who it has been raised against. Also, the action that would be taken if the accused party fails to resolve it. This was a much needed move that was needed in the market to build trust. So far, the market had witnessed many projects being executed with unmet promises and end customers were left merciless.
MNRE clearly makes it transparent the State Nodal Agencies who are not or have not released subsidies for projects (despite submission of applications) giving them a time frame of 15 days to do the same. MNRE also claims that should the SNA fail to do so, the complaint will not be removed from the website.
The Madhya Pradesh Net-Metering Policy was published on 14th October 2015 by Madhya Pradesh Electricity Regulatory Commission. In this article, we will analyze the regulation and define how it can be used.
- The maximum permissible limit for interconnection to the grid is 1 MW as per the latest amendment (refer).
- The project should be in the facility/ premises of the consumer
- Net-Metering provision would be offered to the consumer on a first-come-first serve basis
- The cumulative target for Net-Metered Solar projects was defined as 10 MW, however the clause has been omitted completely in the recent amendment
- Cumulative capacity allowed to be connected at a particular distribution transformer is 30% of its rated capacity
- Third Party Sale will not be allowed
Madhya Pradesh is a state which welcomes Renewable Energy by providing various benefits. One important one among those is Net Metering for rooftop solar plants. The policy is applicable for both LT(415V) and HT (Above 415V) consumers who may have their solar system interconnected at the LT side provided the metering arrangement is done at the HT end for HT consumers. On performing on-ground activities for getting net-metering approval we observed the following pain points during one of our Ezy Permits assignments.
1) HT Net-Metering :
As per the policy the bi-directional net-meter is supposed to have a current rating of 1 ampere and accuracy class of 0.5S whereas the real time scenario in MP is all existing HT meters are bi-directional but with current rating of 5 ampere and accuracy class of 0.1S. Now if you would want to get net-metering for your Solar Power System you will have to change your meters and also your CT/PT arrangement which again demands a separate approval.
Suggestion: Since 1 ampere and 0.5S accuracy meter are costly and the existing HT meters are also capable of dual-direction it would be a great step if the Regulatory Commission looks into this. We hope for MPERC to amend the policy to allow meters of rating 5 ampere and accuracy class 0.1S which are cheaper and fit with the current standards. A picture of the current standards for net meter is shown below (reference)
Now that we have discussed HSN Codes Classification and Input Tax Credits in our previous two blogs, here is the last blog of the series on ‘EPC Billing Mechanism’. If you think there are still unanswered questions, write to us on here and we will try to cover that in our next blog.
GST is a form of Value Added Tax. But the VAT had tax cascading which meant many layers of taxes. Input Tax Credit (ITC) is an amazing tool of GST to avoid tax cascading.
Manufacturer, Trader and End-User
Let us directly jump into an example to understand this better. Assume that a trader is going to buy a solar Module and sell it to an end user. Let’s view it from the trader’s point of view.
Though the GST (Goods and Services Tax) is praised by many traders, service providers and manufacturers due to the fact that it replaces all other taxes, no more Entry forms, Input Credit Recovery System etc, this new system of HSN & SAC numbers comes with confusions.
HSN (Harmonised System Nomenclature) Number and SAC (Services Accounting Code) Number got its place as a new column in invoices for Solar Equipment after the implementation of the GST. Yes, it is mandatory to give a column in invoices for HSN/ SAC. Confused? Here’s an attempt to make it simpler for you.
Now that we have the foundation laid on the Solar Policy in Goa, let’s look into details of a particular procedure which is extremely important for the success of a Rooftop Solar Power plant in India: Metering (Gross and Net).
Why the two are important is simple-
- it allows virtual banking of power
- it controls wastage of power by interacting with grid
- for areas that don’t have too many power cuts, it avoids the need to attach a battery to the system
- It reduces your dependence on the grid