Govt move to hit green power tariff

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The Budget sought to cut accelerated depr­eci­a­tion benefit for green sector from 80% to 40%

The government may find it difficult to get low tariff for new renewable power projects auctioned after March 2017 as the Budget has proposed to cap accelerated depreciation benefit at 40 per cent along with withdrawal of the 10-year tax holiday for such projects.Sources said the proposals would raise the development cost of solar projects, particularly those on roof­tops, and thereby push up the power tariff by 10 paise per unit. This could make the low quote of Rs 4.34 per unit made in a recent solar power auction in Rajasthan difficult for future projects.Wind power projects would also be adversely impacted by the budget proposals as a large portion of these plants are set up on the basis of accelerated depreciation benefits.“We wish to reiterate that the accelerated depreciation limit of 80 per cent should continue till 2022, aligned to the government target of 175 gw renewable energy by 2022 and to boost manufacturing under the ‘make in India’ vision,” said Tulsi Tanti, CMD, Suzlon Group.


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