India: New Solar Water Heater Property Tax Discussed in Mumbai

A new regulation in the Indian city of Mumbai may soon tax solar water heaters on roofs as part of the property tax. The Bruhanmumbai Municipal Corporation (BMC), the civic body which governs the city of Mumbai, has recently amended its Development Control Rules (DCRs). According to the new DCRs by India's richest municipal organisation, any space on a roof occupied by split air conditioners, antenna or cooling towers is going to be included in the Floor Space Index (FSI) calculation, meaning it will be charged with regular property tax. Most likely, this will soon include solar water heater space as well. FSI is the ratio between the built floor space and the available lot area. The FSI in Mumbai ranges from 1 to 4, depending on location, type of building constructed etc. The photo shows the densely populated city centre of Mumbai at the west coast of India.
Photo: MNRE

Clause 35 of the DCRs, “Floor Space Index Computation”, lists the following technologies as included in the FSI: “covered areas required on top terrace for antenna / dish antenna / communication tower used for Telecom (basic cellular or satellite telephone) or ITE purposes, V-Sat, Routes, Transponders or similar IT related structures or equipment” (see page 104 of the attached document). Prior to the new regulation, any temporary construction or utility installation on the terrace had not been included in FSI calculation.

The city‘s experts have recently been debating which consequences the new calculation method will have for solar water heaters. Jitendra Mukadam, an architect in Mumbai, is convinced that the amended FSI regulation may attract property tax on solar energy systems. The DCRs, however, are clearly encouraging the use of solar water heating systems on buildings (see page 117 of the attached PDF file).

Akson´s Solar, a solar thermal system provider from Pune, has already been experiencing some effects of the first regulation. The company negotiated with a major engineering firm about a 20 TR solar thermal air-conditioning project in Mumbai city. When the project was about to be finalised, the company was informed that the amended FSI taxation will make the project no longer economically viable. So, the engineering company dropped the idea of setting up a solar system altogether. “We checked with some other sources involved in BMC projects and they, too, think that the BMC could start taxing solar water heaters as part of the FSI any day now,” explains Akson´s Managing Director, Mangal Akole.

When this was brought to the attention of Tarun Kapoor, Joint Secretary (Solar) at the Ministry of New and Renewable Energy (MNRE), he assured stakeholders that the MNRE would write to the BMC in order to convince the municipal body to exclude solar thermal technology from any such regulations. Still, the Maharashtra Solar Manufacturers’ Association (MASMA) has already tried several times to get a hold of the responsible officials at BMC, in order to obtain first-hand information and understand the implementation of the amended DCRs.

More information:
http:// www.mcgm.gov.in/

This text was written by Jaideep Malaviya, an expert in solar thermal based in India (malaviya@solrico.com)

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