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POLICY MEASURES IN VOGUE:

A host of fiscal incentives and facilities are available to both manufacturers and users of renewable energy systems, which include:
  • 100% accelerated depreciation for tax purposes in the first year of the installation of projects/systems.
  • No excise duty on manufacture of most of the finished products.
  • Low import tariffs for capital equipment and most of the materials and components.
  • Soft loans to manufacturers and users for commercial and near commercial technologies.
  • Five year tax holiday for power generation projects.
  • Remunerative price under alternate power purchase policy by State Government for the power generated through renewable energy systems, fed to the grid by private sector.
  • Facility for Banking and wheeling of power.
  • Facility for Third party sale of renewable energy power.
  • Financial Incentives/Subsidies for devices with high initial cost.
  • Involvement of women not only as beneficiaries but also for their active contribution in implementation of renewable energy programmes.
  • Encouragement to NGOs and small entrepreneurs.
  • Special thrust for renewable energy in North-Eastern region of the country.10% of Plan funds earmarked for North-East towards enhanced and special subsidies.

The importance of Government Policy in the rapid adoption and growth of renewable energy technologies cannot be overemphasized. The subsidies, fiscal support, information, and consultancy services provided by the MNES have and will likely continue to be the single most important factor in the growth of these technologies. This is because the MNES has to essentially make these technologies competitive with conventional technologies by helping overcome the two primary problems of slightly higher costs and high initial costs. Whether the MNES can continue to do so successfully will largely determine the future of these technologies in India. We should also note that the World Bank, IMF, and Asian Development Bank have provided a large portion of the financing for these projects. Since it is most likely that the MNES cannot provide near the same level of assistance to these projects the continuing help (and hopefully increased help) of these multilateral lending organizations is also vital to the development of these technologies.

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