Solar Tariff to rise as custom duty on gear to kick in Mumbai: The days of solar tariff bids at Rs 2 a unit may be over, as project cost is set to rise after the government announced the much-awaited customs duty on key equipment, aimed at boosting local manufacturing.India will levy customs duty of 40% on solar modules and 25% on solar cells beginning April 2022. The country has a safeguard duty on these equipment that expires in July. Indian solar equipment manufacturers have been demanding customs duty for a “level playing field” with foreign manufacturers. But solar project developers will now have to factor in the higher cost.“This will promote local manufacturing but building scale would take time. Local manufacturers may take 3-5 years to set up new capacities and in that period sourcing equipment would be expensive and tariff would increase,” Praveer Sinha, chief executive at Tata Power Company, told ET.The announcement to impose the duty on solar cells and modules does not have any grandfathering provision, which would have allowed projects already auctioned to import equipment under existing rules without paying the customs duty.