According to CRISIL report,India’s target of adding 100 GW of solar project capacity by 2022 is facing problems due to (a)lack of clarity on policy (b)frequent bid cancellation and (c)safeguard measures.
Last year,the Finance Ministry imposed up to 25% safeguard duty on imported solar panels and modules.The safeguard duty imposition has affected project costs by 10-15% and consequently led to a rise in bid tariffs.
Safeguard Duty is tariff barrier imposed by government on the commodities to ensure that imports in excessive quantities do not harm the domestic industry.
Further, clarification on the Goods and Services Tax(GST) procedures and its implementation for solar sector has been delayed for over a year. It has impacted commissioning schedules and project costs across developers.
The Indian government has set a growth target of installation of 1750 GW aggregate capacity of renewable energy by 2022.Out of total 175 GW, target of 100 GW has been set for Solar Power.