Thiruvananthapuram, September 7 – The reduction in the Goods and Services Tax (GST) on renewable energy equipment from 12% to 5% is expected to lower the cost of installing rooftop solar plants across Kerala. This decision by the Central Government aims to encourage wider adoption of renewable energy sources, particularly rooftop solar systems.
The GST reduction is estimated to bring down the cost of equipment by around 7%, or approximately ₹3,000 to ₹4,000 per kilowatt installed. This change could significantly reduce the overall cost of installing rooftop solar plants and make them more accessible for a larger number of households and businesses in Kerala.
However, stakeholders in Kerala have expressed concerns that despite this anticipated increase in solar plant installations, the benefits may not be fully realized due to various factors. These include limited awareness about renewable energy solutions, lack of technical expertise for installation and maintenance, and challenges related to land acquisition and grid connection.
The Supreme Court has emphasized the need for a comprehensive approach to address these concerns and ensure that the benefits of the reduced GST on renewable energy equipment are maximized in Kerala. The High Court and the Regulatory Commission have also urged the Centre to consider these challenges and develop policies to address them effectively.
The reduction in GST on renewable energy equipment is a significant step towards achieving India’s target of increasing the share of renewable energy in the total installed capacity to 40% by 2030, as per the National Electricity Plan. It remains to be seen how this change will impact the renewable energy landscape in Kerala and whether it will lead to a surge in rooftop solar installations.
