India's energy transition: the impact of the goods and services tax on solar photovoltaic and coal power costs

The Goods and Services Tax (GST) has increased the cost of solar photovoltaic (PV) power generation by almost 6 per cent and reduced the cost of coal thermal power generation by 1.6 per cent. The absolute size of the subsidy to coal power generation remains INR 7,685 crore (USD 1.1 billion) higher than for solar PV in 2018. It is important for policy-makers to evaluate the impacts of such tax reforms to make sure they do not send the wrong price signals on energy choices.