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Taxes slow India's solar power rollout but boost manufacture

Solar developers in India fear that a tax meant to encourage Indian manufacture of solar components will slow down the installation of solar power this year

By SIBI ARASU
Published - Jan 29, 2023, 11:06 PM ET
Last Updated - Jun 23, 2023, 12:22 AM EDT

BENGALURU, India (AP) — In May last year Fortum India, a subsidiary of a Finnish solar developer, won the bid for a solar power project in the state of Gujarat. The project was due to be completed three months ago and would have generated enough electricity for 200,000 homes.

But like many other solar power projects in the country, it's been delayed as Fortum India struggles to source and pay for necessary components.

“For the last six months, we have not been able to finish developing any new projects,” said Manoj Gupta, who oversees Fortum India's solar projects in India.

Gupta said solar panels and cells have become obstructively expensive because of protective taxes the Indian federal government implemented in April last year. The basic customs duty imposes a levy of 40% on imported solar modules and 25% on solar cells.

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