GST: Shadow over solar power

Sector could see issue around debt financing, refinancing, financial closure due to changes

The new Goods and Services Tax (GST) regime is likely to disturb the dream run the solar power sector has been seeing recently.

Solar power generating systems fall in the 5 per cent category but the modules and other basic equipment are in 18 per cent bracket. Cables, transformers, etc — components for power supply — would fall under the 28 per cent slab. All these would be passed through to the consumer and would impact the low tariffs that developers have been offering till about last week.

The ministry of new and renewable energy had said the sector would