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International Solar Alliance

Since 2015, The Council has been supporting the growth of the International Solar Alliance (ISA). As a Knowledge Partner, we have been providing inputs on ISA’s work programmes, communication, and structural growth. We also develop ISA’s quarterly newsletter - the ISA Journal, which was first published in October 2016.

Further, The Council has also developed solar roadmaps for 13 ISA member countries. This exercise took a stock of all existing activities in these countries in terms of research, international collaboration, investment, technology transfer, etc., and identified opportunities that ISA could create to help them meet and exceed their solar targets.

Comment

Common Risk Mitigation Mechanism (CRMM)

Financing of solar power generation assets in most developing countries suffers from a lack of risk mitigation tools, a high-risk perception among investors, high transaction costs, small project sizes, and lack of scale. To address this, CEEW, in collaboration with the Confederation of Indian Industry (CII), the Currency Exchange Fund (TCX), and the Terrawatt Intiative (TWI), designed the Common Risk Mitigation Mechanism (CRMM). CRMM is a multilateral platform that will pool multiple risks - political, off-taker, and foreign exchange risks - and have many participating countries, capitalised through multiple sources of international public money.

As part of CRMM’s pilot phase, a USD 1 billion guarantee could crowd in up to USD 15 billion of investments for 20 GW of solar PV capacity in more than 20 countries. The idea of CRMM received initial support from seventeen countries with high solar potential, including India, France, Australia, Mali, Nigeria, etc.

Comment

GST: A Good Solar Tax?Impact of the Proposed GST on India’s Solar Ambitions

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January 2017 |

Citation: Neeraj Kuldeep and Anjali Viswamohanan (2017) 'GST: A Good Solar Tax?', January

 

Overview

This policy brief analyses the effects of the implementation of the Goods and Services Tax (GST) in India, especially on solar tariffs, and makes recommendations to offset the negative impact of the new tax regime on the Indian solar sector.

Applicable taxes in the Solar Energy Sector

Applicable taxes in the Solar Energy Sector (CEEW compilation)

Key Findings

  • A ten per cent increase in tariffs is projected if current tax exemptions were to be curtailed in the roll out of GST.
  • An increase in tariffs would be observed due to an increase in operations and maintenance costs, panel costs, and financing costs.
  • The increase in solar tariffs would be higher for states (such as Rajasthan) where VAT and Entry Tax exemptions are currently provided for solar equipment, as opposed to states (such as Gujarat) where exemptions are not provided.
  • If tax exemptions are curtailed, GST could increase capital cost of a solar project by INR 4.5 million per megawatt and set the sector back by 18 months in terms of cost competitiveness.

Comparing existing solar tariff with solar tariff in GST regime

Comparing existing solar tariffs with tariffs in the GST regime (CEEW Analysis)

  • GST could impact the pace on the second phase of the solar park development to add an additional 20,000 MW capacity.
  • GST will boost the ‘Make in India’ initiative and improve the competitiveness of Indian manufacturers of solar cells, panels and modules.
  • The increased competitiveness will eliminate the cascading effect of the existing tax structure and introduce an input tax credit. It could also create an additional 37000 new jobs in the solar manufacturing sector by 2022.
Solar tariffs and the estimated acceleration in deployment required for the solar sector in 2017 will largely depend on the manner of implementation of the Goods and Services Tax regime.

Key Recommendations:

  • Clarify the revision of solar tariff bids under GST and provide clear guidelines regarding the applicable GST slab for solar power projects.
  • Provide government mechanisms to offset the negative impacts of GST (if any), as and when it is implemented.
  • Asses potential increase in capital investment and consider provisions to revise bid tariffs.
  • Ensure that the current exemptions applicable to the solar sector continue as a temporary measure.
  • Offset increase in solar tariffs by increased Accelerated Depreciation benefits.
  • Provide a revised Viability Gap Funding (VGF) to offset the increased capital costs due to the implementation of GST.

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Renewables

Renewables

The Renewables team supports India’s - and the world’s - clean energy transition. It does so through timely, research-based interventions based on extensive policy, regulatory, and market analyses. The team also assesses, through surveys, India’s renewable energy jobs potential and skills requirement, the risks facing renewable energy investments, and designing strategic financial mechanisms to address the identified risks.

  • 7 times

    more jobs to be created by the rooftop solar segment as compared to ground-mounted utility scale solar
  • 75%

    of the cost of solar power could be due to the cost of finance
  • 1.3 million

    Estimated jobs created by the solar and wind sector by 2022, if India realises its 175 GW target.
  • CEEW and NRDC’s report captures a new dimension in accurately assessing manpower requirements in the solar and wind domain. The report builds on earlier studies on the subject, considering national objectives to meet INDC commitments. It makes the path of Skill Council for Green Jobs more clear and visible in terms of capturing the opportunity of employability in solar and wind domain.

    Dr. Praveen Saxena

    CEO, Skill Council for Green Jobs

  • CEEW has been a trusted resource partner for the advances made by the International Solar Alliance. Their independent analysis on renewable energy jobs and skills, and the risks plaguing the flow of investment into renewable energy in India is extremely valuable for the sector and for ISA’s mission.

    Upendra Tripathy

    Interim Director General, International Solar Alliance

  • CEEW is working with us as a strategic knowledge partner as we work to unleash attractive finance to meet India’s ambitious renewable energy target.

    K S Popli

    Chairman, IREDA

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Our Renewables Team

Greening India's WorkforceGearing up for Expansion of Solar and Wind Power in India

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June 2017 | ,

Citation: Neeraj Kuldeep, Kanika Chawla, Arunabha Ghosh, Anjali Jaiswal, Nehmat Kaur, Sameer Kwatra, Karan Chouksey (2017) 'Greening India's Workforce: Gearing Up for Expansion of Solar and Wind Power in India', CEEW-NRDC Report, June

 

Overview

The Council, along with the Natural Resources Defence Council (NRDC) India, conducts annual surveys of India’s solar and wind markets in order to analyse both short and long-term renewable energy job creation.

Job creation and skill development are key priorities for the Indian government. Jobs created from renewable energy offer a significant opportunity to meet the government’s objectives on employment generation. However, credible information on the number of jobs that have been created so far, and those that can be created in future to achieve India’s renewable energy goal of 175 GW by 2022, has been lacking.

Results from the latest study find that India's ambitious renewable energy goals could generate thousands of new jobs while meeting India's climate and economic goals.

CEEW - NRDC analysis

Key Findings

  • Solar and wind energy employed over 21,000 people in 2016-17 and will employ 25,000 or more in the following year.
  • The labour-intensive rooftop solar segment will employ 70 per cent of the new workforce, creating seven times more jobs than large-scale projects such as solar farms.
In the next five years, 30,000 people will be employed in the solar and wind energy sectors.
  • Domestic solar manufacturing industry could provide full-time employment for an additional 45,000 people in India.
  • Solar jobs will be well distributed across India with Maharashtra and Uttar Pradesh leading in job creation. Wind jobs are likely to be concentrated in a few states that have high wind potential, as has been the case with wind capacity.
  • Eighty per cent of the new clean energy workforce will be employed during the construction phase. However, despite these being contractual jobs, the large pipeline of renewable energy projects creates enough opportunities for workers to stay employed.

Source: CEEW Analysis

Key Recommendations

  • Promote reporting of employment generation from renewable energy companies.
  • Provide a greater impetus and policy priority to rooftop solar to create renewable energy jobs and meet the government’s employment objectives.
  • Support development of training centres led by the private sector to source construction jobs locally since solar jobs are well distributed among states.
  • Develop wind power training centres based on state specific wind targets in 8 states.
  • Promote a strong domestic solar manufacturing industry to provide employment to an additional 45,000 people in India.

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