Useful Life Of Solar Panels As Per Companies Act

Depreciation is calculated by considering useful life of asset cost and residual value.

Useful life of solar panels as per companies act.

The national renewable energy laboratory nrel performed a meta analysis of studies that examined the long term degradation rates of various pv panels. The useful life of the asset is more than one year. Depreciation as per companies act 2013 for financial year 2014 15 and thereafter. The benefit of ad in solar power industry is used to incentivize the entrepreneurs to enter into the solar power generation.

The worst degradation rate is 80 a year but as a benchmark you can expect an average degradation rate of 50 a year for any panel. Solar as per co. We have also compiled changes to schedule ii useful lives to compute depreciation read with section 123 of companies act 2013 made vide notification no g s r. Depreciation rate solar power plant per companies act income tax goods and services tax gst service tax central excise custom wealth tax foreign exchange.

B after retaining the residual value 6 m ay be recognized in the opening balance of retained earnings where the remaining useful life of an asset is nil. 237 e dated 31 03 2014 and notification no g s r. Depreciation of 80 was allowed on plant and machinery of the solar power plant. 80 of rs 500 lacs is rs 400 lacs this value can be expensed in the very first year itself which entails the name accelerated depreciation since a large value of assets is shown to have depreciated in the very beginning solar rooftop system dealers in nagpur will help to solve this problem.

The plant life assumed by the companies act 2013 is different from the actual life given by manufacturer as given below. In this article we have compiled depreciation rates under companies act 2013 under written down value wdv method and as per straight lime method slm. They found that the 1 per year rule was somewhat pessimistic for panels made prior to the year 2000 and today s panels with better technology and improved manufacturing techniques have. According to a national renewable energy laboratory nrel study premium modern solar panel manufacturers such as panasonic and lg offer panels with degradation rates as low as 0 30 per year.

These provisions are applicable from 01 04 2014 vide notification dated 27 03 2014. If we consider the rate mentioned in point a i other than continuous process plant it is 6 33 and plant life assumed is 15 yrs whereas the actual life of solar power plant in 25 yrs.