Exemption of VAT on imported raw material for producing solar panels in the next fiscal budget is a must to cut on prices of local products, said the chief executive officer of Rahimafrooz Renewable Energy Ltd Engr Md Mohin Habib, during an interview with The Business Post’s Mohammad Shazzad Hossen. Here are the excerpts:
Q: What policy support do you expect in the upcoming budget for promotion of solar energy?
We expect the government to enforce mandatory participation of local solar panel producers in government-funded power projects. To encourage local entrepreneurs in investing in solar energy, we propose reservation of 8 to 10 per cent quota for local producers while allocating power load of solar panels for residential, non-residential and commercial buildings.
We want tax and VAT exemption on imported raw materials, capital machinery import, local procurement and sale of solar panels to keep the price of solar panels within the reach of consumers. We expect the government to earmark Tk 500 crore in the next budget for solar module producers.
Q: What problem are you currently facing in promoting solar energy in the country?
We are doing quite well in the domestic market, but when it comes to megaprojects scarcity of lands and bureaucratic entanglement are creating barriers. On top of that, advance income tax on import of raw materials is another barrier in promoting solar energy.
Q: What's Rahimafrooz’s plan in promoting solar energy?
We wish to invest in our own photovoltaic (PV) plant modernisation with new technology capital machineries for producing 12 BBs solar panel’s up to 600 watt peak size of panel etc. Once we do this our importers will not require importing solar panels. They can directly purchase from us. We are currently producing solar panels with bigger capacity in our factories alongside the smaller ones. This will promote the usage of solar energy in the country further.
Q: How many units of solar panels have you sold in the country till date?
We have so far sold around 10 lakh units of solar panels in the countr
Q: In which areas of the country are you selling panels in large quantity?
Solar panels are widely used in remote and load shedding prone areas. We sell panels in bulk numbers in Bhola, Hatia, Noakhali, Moheshkhali and Monpura alongside certain areas of Cox’s Bazar where grid-connected electricity is not available yet. Another important market lies in the north in Rangpur Dinajpur, Kurigram and Bogura due to load shedding in the region. People use solar panels as a backup for grid connection.
Q: How do you address the allegation of solar panels not being sustainable?
These allegations are false. We provide 20-year service warranty for panels and five-year replacement warranty for solar battery. In recent years, we have experienced less than one per cent warranty claim for batteries and none for solar panel. The average lifetime of our solar battery is about six to seven and a half years. Rahimafrooz Solar hopes that it would capture about 50 per cent of the total market share in the coming days.
Q: Why are local solar panels still pricey?
Prices of panels in the country are still within people’s reach despite high VAT on imported raw materials. We heavily depend on imported raw material to produce solar panels. Therefore, high VAT on imported materials is the main cause for pricey panels. There are other costs involved like freight forwarding, C & F agent, Delivery cost etc.
Q: Does Rahimafrooz have any plan to invest in solar fired power plant?
Yes, we are ambitious of course. This can be done in the future depending on our solar business policy and strategy of the government.
Q: How much have you so far invested in solar power?
We have till date invested Tk 225,92,68,668 in producing solar power and it includes the price of land.
