What are the Pros and cons of solar energy?

'The energy from the Sun' that will be the simplest definition of solar energy for most of the people, while on the other hand solar energy encompasses rather a long process which involve the technical method of harvesting the energy of the sun which is usually in the form of heat waves and it is those waves which can be converted into Thermal or electrical energy.

There are numerous reasons why solar energy and not other energy, one of which will be owing to its abundance and availability almost every part of the globe. It is a simple deduction that solar energy does not work well in cold climates. However, the efficiency of solar energy is seen more in cold climates as compared to areas where there is maximum exposure to sunlight. It is due to the fact that high exposure to sunlight can reduce output voltage. Now, what is with the abundance of sunlight? As per the department of energy the earth surface receives 73,000 terawatts of solar energy on a daily basis which is 10,000 times the global energy use daily. Imagine converting at least 10% of that total energy.

One of the major concern the world today faces is that of the climate change which has stayed in the limelight for too long and has gained world wide attention and to curb such global problem one have to start at a point somewhere and that is where solar energy comes. Solar energy has a negligible impact on the emission of greenhouses gases which are the major source of global warming. The energy being renewable provides a beneficial alternative to many fossil fuels. Besides solar energy can be installed almost everywhere depending on the size and the intensity of the energy to be produced. Typical solar panel produces about 250-325 watts of electricity that will generate about 5 kilo watt of energy thereby saving a huge amount of money on electricity Bill.

GThe cost of installing solar products have also dropped significantly between 2017 to 2018 by 9%. Many countries have now seen the potential of solar system as tax rebates and state policies have been initiated for solar system. India as well has taken the initiative to set up $350 million fund for solar projects to achieve 175 gigawatts in renewable energy by 2022.India receives twice the amount of sunshine as compared to European states thereby have a great scope for a solar city. The solar panels manufactured are also highly durable to extreme weather conditions including the impact of hail stones. Solar energy is just not another form of renewable energy, it is 21st century form of energy with many countries resolving to settle with it.

However, there are some disadvantage as well in setting up solar system. Some of which is the back up power or the solar grid meant to be used at night or during shady days but the solar grid does not have enough storage to go on for a long time therefore, we cannot be 100% solar dependent moreover, larger solar system takes an expertise for its installation.

TThe cost and space is another making it hard for commoner to go all solar furthermore to set up the solar panel, the structure of the house should be kept in mind as well or else a different structure to install the solar panel should be constructed, which is another problem. Solar panel for commercials purpose requires a huge amount of land approximately 3.5 to 10 acres megawatt. The production of solar panel requires several exotic materials some of which are copper,indium,gallium,diselenide and cadmium etc which if not disposed properly can cause serious environmental or public health threats. Concentration solar panel plants (CSP) like any other plants takes a huge amount of water for its cooling thus creating another problem

Thus, solar energy provides an alternative to so many conventional form of energy and must be encouraged though, it comes with some flaws yet with proper care the threats could be minimize, thus, making solar energy the most sought and reliable form of energy.

-- Zujamo Ngullie

Problems with VAT

However the existing regime of VAT also has certain problems like:

When goods are transferred from one state to another, if it is for transportation purpose then it does not attract VAT, but if the goods are transported for sale, then it attracts VAT. Many big companies opened warehouses in several states to avoid VAT. Small and medium enterprises which are unable to open warehouses suffered due to more tax burden.

Another problem here lies in rate arbitrage. We know that different states have different VAT. In this case, if a person buys an Audi car, he would prefer to buy from the state where there is less VAT as compared to the state with more VAT, which in turn will lead to regional imbalance in development.

Besides, VAT had the problem of tax on tax, for example, if central excise on a product of Rs1000 product is 10%, then VAT was applicable on Rs1100, and not on Rs1000.

To remove above vulnerabilities GST was introduced in the form of macro-economic reform and is applicable now all over the country.

Positive impact of GST

It will benefit the consumers as the cost of products will decrease which in turn will increase the demand of that product.

Less corruption will be there as the GST network will be used in handling all the transactions with less human interventions.

It has broadened the tax base, as 27 lakh new registered entries were seen in the formal sector. It will increase the revenue in the long run and thus address the problem of fiscal deficit.

The number of returns filed with this new taxation regime is less as compared to earlier. Also, there are now just 6 rates which are less than earlier ones which included different VATs of different states. This regime will also benefit the SMEs, and also will help in balanced development of all the states.

GST will promote cooperative federalism between the centre and states.

Elimination of interstate check post which will increase the time and distance covered by the trucks, and the efficiency of transportation in our country.

Small traders with threshold of up to Rs 20lakh will not come under the GST while there is a composite scheme for small and medium enterprises with turnover up to Rs1.5crore to file return which can pay 1-5% GST.

Negative impact of GST

The GST rate of 28% is considered high when compared with other countries.

Lower GST on gold and jewellery which should be kept high.

Still, many items like electricity, real estate, alcohol, petrol are out of the GST ambit.

States are facing a revenue loss as VAT constituted the highest percentage of revenue for the states which is now subsumed under the GST. On the other hand corporate tax which constitutes higher revenue for the centre is not affected.

India being an IT hub, still has not created a robust GST network, there are problems seen in handling large amounts of data when filing returns.

Still there are many issues to be solved. For example, if chocolate is considered luxury item, it would attract higher rates, while if it is Patanjali chocolate, the product is considered as a healthy item, so there is classification dispute.

Another issue arises, if any item is sold without packaging then it will attract no tax while if that item is packed, then it attracts the tax.

Way forward

Although there are issues seen in the implementation of the GST, yet there is a hope that things will improve in the long run. Various states facing revenue loss are compensated for a period of five years. Teams are working for a robust GST network. Now, not more than 50 items attract 28% tax. Also, there is a provision of making anti profiteering authority which would look into whether the profits are reaching to the end consumers. The government has also brought a provision of e-way bill to track goods from place to another.

Since this is the first tax reform on a massive scale after independence, it will take at least one year to settle the issues.

- Akriti Singh