The Su-Kam founder tells Business Today what Budget 2014 must do for Indian solar — from priority-sector lending to zero VAT on inverters and a hard push on rooftop generation.
In the run-up to Budget 2014, Business Today’s Anilesh S. Mahajan sat down with Kunwer Sachdev, Managing Director of Su-Kam Power Systems, to hear what the country’s best-known inverter entrepreneur wanted from the Finance Minister. His answer was blunt: give Indian solar the same seriousness the government gives agriculture and small industry — starting with priority-sector lending — or watch a hard-won industry stall again.
A market that had already lost its momentum
Sachdev opened by putting the sector’s recent trajectory on the table. Solar, he argued, has “huge potential in a country like India,” but the numbers were sobering: after growing 420 per cent in 2012, the Indian solar market slumped to just 7 per cent growth in 2013. That collapse, he said, was not a sign that demand had disappeared. It was a sign that policy, financing and taxation had not kept up with an industry the government itself claimed to want.
Fix the tax stack first
His first ask to the Budget was on tax. Solar power equipment — inverters, UPS units, charge controllers — should be brought under a “zero” VAT and CST regime across the country, in line with solar panels themselves. Raw materials used to manufacture these products should sit under a zero-duty import regime. And on finished, imported solar equipment, he wanted the opposite treatment: a real import duty, so that the domestic manufacturing base could actually grow rather than be undercut by cheap shipments.
“Priority sector lending status for the solar energy sector.”— Kunwer Sachdev to Business Today, on what Budget 2014 must deliver
Put a rooftop within reach of an ordinary household
The second block of asks was about the demand side, and it read like a manifesto for rooftop solar long before rooftop solar was fashionable. Sachdev wanted the 80 per cent accelerated depreciation benefit — then available largely to businesses — extended to individual taxpayers installing rooftop systems. He wanted retail lending for household solar equipment to be as easy as picking up a consumer loan, and he wanted the interest on those loans to be deductible from personal income. In short: treat a family buying a rooftop system the way the tax code treats a family buying a home.
Priority-sector lending — and make the rules stick
The headline demand, though, was priority-sector lending status for solar — the same classification that unlocks cheaper, guaranteed credit for agriculture and small industry. To that he added a call for strict enforcement of Renewable Purchase Obligations, with real penalties for states and utilities that miss their targets, and for a five-year waiver of CST, VAT and service tax on grid-connected and off-grid solar projects built with Indian-made systems. It was, he argued, the cheapest possible way for the government to shrink the cost of solar power across the whole value chain.
Build solar in, don’t bolt it on
Two smaller but pointed ideas rounded off the list. Building bye-laws for new construction, Sachdev said, should make solar mandatory — so that every new home, office or apartment came with generation designed in, not retrofitted years later. And the anti-dumping duty then being weighed on imported solar panels should be postponed: with domestic manufacturing capacity still far below the country’s demand, penalising imports at that moment would only slow deployment further.
A founder speaking for an industry
What the Business Today interview captured, more than any single line item, was the voice of a founder used to arguing the industry’s case in policy rooms. Sachdev was not just describing what Su-Kam wanted; he was laying out the plumbing India would need — taxes, credit, procurement, building rules — if solar was ever going to move from pilot projects to national infrastructure. More than a decade on, several of the ideas he put on the Finance Minister’s desk that week — rooftop finance, RPO enforcement, indigenous manufacturing support — sit at the centre of India’s energy transition today.
‘Accord priority sector lending status to solar energy sector’ — Business Today →