The reduced GST (Goods and Services Tax) rates, introduced by the government earlier this week, can “materially change” the landscape for India’s solar industry by significantly boosting demand and reducing project costs, according to Amit Paithankar, CEO and Whole-time Director of Waaree Energies.
“GST 2.0 will definitely change life materially for all of us. There are three things that one would need to look at. The project cost is slated to go down by about 5%. The input cost for projects will go down. The end consumers will benefit. For instance, consumers in the PM Surya Ghar Yojana have a direct benefit of GST,” he told NDTV Profit on Friday.
The top executive noted that the reduced input costs would lead to more favourable power purchase agreements (PPAs) and tariffs.
As per the GST Council’s decision, renewable energy components, such as solar modules, will now attract a 5% GST, compared to the existing 12% slab. The new tax rates will come into effect from Sept. 22.
“It’s all about demand creation. Overall, it’s very good news for the solar sector and the renewable sector,” he added.
Paithankar also shed light on the recent acquisition of a 64% stake in Kotsons. It will help in broadening Waaree Energies’ scope for becoming a comprehensive energy solutions provider.
“Our focus is to transition towards a broader energy play. You can say it’s a pearl of strings, but it’s all towards a necklace, which essentially is an energy transition. Acquisition of a transformer asset essentially complements that,” the top executive noted.
Kotsons specialises in medium-voltage transformers (11 kV/33 kV), which are critical components in renewable energy projects and grid infrastructure.
When asked about the potential impact of the revival of ties between India and China, Paithankar acknowledged the benefits of international cooperation.
“Any collaboration in this highly globalised world, or changing geopolitics, is always positive. In the past two decades, China has made a lot of progress in renewables, solar and battery energy storage, so from a technology perspective, a thought process on wider collaboration always helps,” he emphasised.
The CEO is cautiously optimistic about the second half of the current financial year.
“Let us stick to the promise, let us deliver and when we deliver, we say the hurrah. Let’s not try to foretell the future, but definitely H2 is a strong half that we are looking at.”
Shares of Waaree Energies closed 0.59% higher at Rs 3,219.90 apiece on the NSE, while the benchmark Nifty50 closed flat at 24,741, up 0.03%.
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