The central government is considering the possibility of making the depreciation claims available for investments made in wind turbines tradeable. This, according to the official thinking, is among the ways to attract more investments in the wind energy sector.V. Subramanian, secretary, ministry of non-conventional energy sources(MNES), said the idea is being discussed by the ministries of finance and revenues, and a decision will hopefully be made around the time the preparations for Union Budget 2007 get under way."At present, individuals are forming companies only to invest in wind turbines, and they have no other major heads of income against which to offset the sizeable depreciation they can claim," Subramanian said. If the depreciation entitlement is made tradeable, more investors will come into the sector, he added. Subramanian hinted that the present system of allowing flat 80% depreciation for wind energy investmenrts will then be withrawn, and the investor will instead get tax credit for units of power generated and supplied. These tax credits will then be recorded in the form of some certificates so that they can be sold and bought on the lines of equity shares or other financial instruments, he said."A mechanism will have to be set up to keep the records of all entitlements and deals in them," Subramanian said, adding the initial work of acting as custodian may be assigned to Indian Renewable Energy Development Authority (IREDA) or a few select public sector banks.
