In a major announcement for the EV community, presenting the General Budget 2011-12, Shri Pranab Mukherjee, Finance Minister informed that to provide green and clean transportation for the masses, a National Mission for Hybrid and Electric Vehicles will be launched in collaboration with all stakeholders.
Some of the other highlights in the budget include:
- Full exemption from basic Customs Duty and a concessional rate of Central Excise Duty is proposed to be extended to batteries imported by manufacturers of electric vehicles.
- A concessional Excise Duty of 10% has also been proposed to vehicles based on fuel cell technology.
- The Excise Duty on kits used for conversion of fossil fuel vehicles into hybrid vehicles has also been reduced.
- The Excise Duty on LEDs is proposed to be reduced to 5% and special CVD being fully exempted.
- The basic Customs Duty on solar lantern is proposed to be reduced from 10 to 5%.
- A Proposal to allocate a sum of Rs. 200 crore from the National Clean Energy Fund as Centre’s contribution in 2011-12 for launching environmental pollution remediation programmes.
According to this report, Pashupathy Gopalan, Managing Director, SunEdison Energy India Private Limited has said:
SunEdison hails the Budget 2011-12 as a pragmatic budget. The complete exemption of custom duty on solar cell would help reduce the cost of solar energy for common people. We welcome the expansion of the scope of National Clean Energy Fund for other purposes such as afforestation, pollution control and cleaning of rivers and lakes. The resource mobilization for Clean Energy Fund should also be expanded proportionally to avoid any resource constraint for clean and renewable energy sources. The budget has rightfully increased the allocation of Bharat Nirman Yojana that covers Rajiv Gandhi Gramin Vidutikaran Yojana. However, the energy access requirements for un-electrified households based on clean sources needs additional resource allocation.
SunEdison is implementing solar projects in Gujarat (25 MW), Rajasthan (5 MW) and Uttar Pradesh (1 MW), and hopes to be active in many other States, as and when they come out with their solar policies. Apart from this SunEdison is providing various services including design and engineering services to companies like Azure Power in one of their projects apart from implementing atleast a part of is playing an important role with Mahindara Solar One in their 5MW along with Kiran Energy according to unconfirmed information available with Panchabuta. Further, a couple of months ago, Baltimore, US-based SunEdison announced its intention to invest $100 million in solar projects in India and the company’s President, Mr Carlos Domenech, had said that many private equity investors are interested in partnering SunEdison and a deal could be struck in about three months.
SunEdison has been taking a leadership role in this space and is aggressively involved in a number of the JNNSM projects that are now looking for assistance in design, execution and finance after having secured the big and now having to adhere to rather stringent time lines.
In an another view, according to this report, Khosla-Backed Sunborne Says India’s Budget Ignores the Solar Industry. According to the report, James Abraham, managing director and chief executive officer of SunBorne Energy Technologies, a solar power developer backed by billionaire Vinod Khosla said:
“The Finance Ministry has reduced the import duty on PV cells and modules to zero, but this ignores the needs of the solar industry more widely. In photovoltaic, there are other solar components such as inverters and cables, and the entire solar thermal components of mirrors, receivers, and solar turbines have been ignored. Also, as an industry, we will be relying on imported engineering services provided from experienced players. This too has been ignored.”
As Panchabuta understands, Sunborne had bid during the JNNSM and did not qualify for a project both under the CSP and the Solar PV. In Solar PV, JNNSM bidding, according to sources, the company offered no discount in the reverse bidding and hence probably not interested in the same. The company did bid with a marginal discount in CSP but was unable to make the cut. The company does have a 50Mw allotment in the Solar CSP under the Gujarat state policy.
It is very interesting times in the Solar space with Rajasthan’s 550MW coming out for reverse bidding very soon, Gujarat to make the third round of allotments and the part two of the first phase of the Solar Mission set to come out with a capacity allocation of about 296MW in Solar PV later this year.
Also what will be interesting to see is how serious the different nodal agencies and the governments are with delay in the time lines that have been stipulated. A common complaint among various players in the ecosystem including EPC players, vendors, inverter manufacturers etc. is that developers are waiting and watching and in discussions all the time without making the commitments as deadlines have been rather flexible so far.