Tax Savings on Solar Panels

Since goods and services tax came into place in India, everything is under tax brackets, but there are various tax exemptions that can provide a relief for the people. Following the exemptions, the Government of India is encouraging the adoption of solar energy systems. 

The incentives and exemptions are making way for solar tax benefits which is making energy shifts accelerate, through this the country’s transition to renewable energy sources is pretty evident. This blog is about the tax benefits and the other benefits which can provide an overview on incorporation of solar power, let's check them out. 

Tax Benefits on Solar Energy Systems 

1. Accelerated Depreciation

By following the income tax act, businesses who consider including solar panels in their facility can avail accelerated depreciation benefits. Along with this, it can also allow them to depreciate a part of their asset value in the initial years of the solar power incorporation. 

Through this, the accelerated depreciation can play a major role in reducing the taxable income, further maintaining their tax liability. This can also enhance their business operations enjoying the renewable energy tax savings, it would also support global environmental conditions.

If the company falls under a 30% tax bracket, then they can further get benefits of saving taxes up to twelve lakhs in the first year of solar energy incorporation. This will significantly improve the overall expenses and also work towards maintaining environmental standards.

1. Tax Holiday under Section 80 1A

Including solar at home or in the business, full scale power generation can be benefitted from the tax holiday under section 80 1A. It can be an awe for you as this can provide you a hundred percent exemption on profits for ten consecutive years. 

If you are incorporating a large scale project, then you can enjoy solar subsidies in India, which can provide an incentive for large scale projects. This would also elevate the finance management process through the years since the solar energy systems are installed. 

Tax holidays can be majorly beneficial for the businesses who operate solar farms, through which they can get full exemption from taxes. It can ensure the financial viability of such scaled projects. They can also provide excess energy to the grids, creating an alternate energy source. 

1. Goods and Services Tax benefits

The solar panels bought and installed require fairly less amount of GST paid, as they are relatively low set at five percent. Goods and services tax can be applied to various components and the parts of solar panels, which is exempted in the case of solar panels.

The reduced maintained five percent GST rate is applied to every component overall included in the solar panels such as photovoltaic cells and solar modules. This can further make the initial investment in solar installations more affordable. 

1. Capital Subsidies

Along with the subsidies, there are solar subsidies India can get benefits through the initiative by the Ministry of New and Renewable Energy (MNRE). They play a significant role in providing capital subsidies to the energy consumers through solar power as an alternative.

Overall costs of your installation and management can be covered through these subsidies. It can also provide the financial support that depends on the project size and energy requirements. This would also attract others to incorporate solar panels at your home or in a business facility. 

Among the business getting benefits, why homeowners are left behind from subsidy benefits. If the homeowners are looking for rooftop solar installation, they can enjoy subsidies and can also cover  thirty precent of the installation cost.

1. Net Metering

There are several states who provide net metering policies, which can be helpful for selling excess electricity back to the grid. This also promotes the trend of earning an extra income, which is equivalent to the electricity price of the state. 

By solar energy installation and net metering, they can offset their electricity consumption and potentially potentially earn credits through meters. This can also reflect in electricity bills which would be helpful in tax management.

Additional benefits of Tax exemptions

Along with the incentives and subsidies, solar panel owners can provide various additional benefits which may improve your overall expenses. Some of the benefits are,

1. Reduced Electricity bills

Incorporating solar power at home or at a business facility, they can provide you with an alternative from conventional electricity sources. This can lead to reduction in electricity bills, which will eventually provide you savings on electricity bills in the long term since installation.

1. Environmental Benefits

With the depleting environmental standards, this can be a perfect time to include solar panel as a source of electricity. It will also reduce carbon emissions and contribute in building a greener environment, this could also reverse the environment damages over the years.

1. Energy Independence

Solar panel can help you as a homeowner and a business owner, you can feel the importance of energy independence. This would give you an edge by preventing sudden electricity cuts and let you enjoy a reliable source of energy. 

This can be extremely beneficial if you reside in villages, you can incorporate solar energy systems which would provide consistent electricity. This can also prevent sudden voltage change and minimize appliance burnout at your place.

Conclusion

By observing the industry trends, the Government of India has comprehensive approach to promoting solar energy through tax benefits and required exemptions. The subsidies can also create a favourable environment and promote solar power systems among the citizens. 

The advantages with the several incentives to the homeowners and businesses can let them save extra penny. Through which they can contribute to other expenses, along with this improve the environmental standards that everyone craves for. 

If you are the one juggling with energy and other expenses, this can be your time to include solar energy at your home or in a business facility. You may want to consult HFM Solar today and take a leap in energy consumption, also generate excess electricity enjoying enhanced reliability.