The ministry of new and renewable energy has mooted a proposal to provide income tax benefits to households that install solar water heaters.
Govt proposal aimed at promoting renewable energy resources
NEW DELHI: The ministry of new and renewable energy has mooted a proposal to provide income tax benefits to households that install solar water heaters in a bid to promote the use of alternative energy sources and conserve traditional energy sources.
“The proposal is to provide tax benefits to the extent of the cost of installing one such water heater per household,” V Subramaniam, secretary, ministry of new and renewable energy, said Tuesday.
The proposal is under the consideration of the finance ministry, he said, declining to give further details.
Currently, the ministry of new and renewable energy provides incentives such as low-cost loans at the rate of 2% to domestic users, at 3% to institutions, and at 5% to community users. It also provides Rs 100 per square metre of the area covered by such heaters as incentives.
The ministry is upbeat about energy savings accruing to the state as a result of increased use of solar water heaters.
“One million solar water heaters installed in a city like Bangalore can save up to 1,000 megawatt of energy consumption,” said Subramaniam.
India has a capacity to generate about 1,41,000 megawatt of electricity, and has a target to add 78,577 megawatt of generation capacity in the 11th Five Year plan ending March 2012.
The finance ministry, which is under a lot of pressure due to the widening fiscal deficit as a result of several duty cuts, may also support the ministry of new and renewable energy in promoting the use of alternative energy sources, say experts. “The outgo on the basis of income tax exemption for using solar water heaters will not be huge, when compared to losses from other revenue streams like reduced duties on petroleum products, which may cost the exchequer about Rs 22,000 crore,” said Sujan Hajra, economist at Anand Rathi Financial Services Ltd. “In other countries as well, benefits are given for using alternative energy sources,” Hajra added.
a_shaleen@dnaindia.net
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