Electricity Bills to Get Cheaper from This Month
There’s good news for households — electricity bills are expected to come down starting this month. The recent GST reduction on renewable energy equipment has lowered production costs, which means energy companies can now supply power at more affordable rates.
GST Cut to Reduce Power Costs
The GST on renewable energy equipment has been slashed from 12% to 5%. Because of this, costs for plant construction, engineering, and procurement will drop from 13.8% to 8.9%.
This will directly reduce the cost of electricity generated from renewable sources by 4-5%, which could save consumers 10 to 14 paise per unit.
Boost for Green Energy
Cheaper renewable energy will increase demand for green electricity. Power distribution companies (Discoms) are expected to see more usage, while businesses will get easier and cheaper access to renewable energy through open access systems.
This will also encourage more investment in renewable energy projects and help strengthen India’s clean energy sector.
Benefits for Power Developers
According to experts, the overall cost of new projects will drop by 4-7%. As a result, the return on investment for developers could rise by 100 to 200 basis points.
However, there could be a small drawback — lower GST means reduced input tax credit for producers, which might affect their margins.
Cheaper Coal-Based Power Too
Even coal-based power generation will become less expensive. While the GST on coal has increased from 5% to 18%, the cess of ₹400 per ton has been removed.
This change will lower coal-based electricity costs by over 10 paise per unit, depending on coal quality. Since coal contributes around 73% of India’s power supply, this will significantly reduce overall electricity costs.
What Consumers Can Expect
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Lower electricity bills for households
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Reduced production costs for energy companies
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More affordable access to green energy
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Higher investments in the power sector
With these changes, consumers are likely to see noticeable savings on their electricity bills in the coming months.
