Accelerated Depreciation scheme for wind energy restored

22nd July 2014  To: 22nd July 2014

Acceding to demands from wind power generators, the government Friday announced it was reinstating the accelerated depreciation (AD) scheme which was withdrawn two years ago.

Under the scheme, companies which put up windmills can write off 80% of the project costs as depreciation in the first year of putting up the windmill, and thus save taxes.

The scheme launched in the 1990s was withdrawn in 2012, leading to a major fall in capacity additions of wind power in India. Across India, and in Tamil Nadu particularly, which is the state with the highest capacity of windmills, the AD scheme is what drove the wind power movement as several companies like textile mills had put up windmills to save taxes and also generate wind power for their own use.


Budget 2014-15 proposals to boost wind energy include doubling of the annual Clean Energy Fund from Rs.4,000 crore, exempting special additional duty of 4 percent on parts and materials required for manufacturing wind operated generators and increase of the clean energy cess from Rs.50 to Rs.100 per tonne for financing and promoting.



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