CleanTech/ Renewable Energy, Other, solar, Wind

‘Solar power becoming a more viable option than wind’

According to reports, can solar power address the issue of power deficit in Tamil Nadu? It appears so at his juncture considering that the State, despite having the highest installed wind power capacity faces some inherent challenges. These include poor evacuation infrastructure and age-old windmills.

The above observation led speakers at the Solar Energy Investment and Technology Forum 2013 to conclude that solar looked to be a more viable option than wind, and probably ‘the’ option to mitigate the power deficit scenario in the State.

There are inherent challenges though in integrating renewable energy, such as poor evacuation infrastructure, power system stability and operation, banking issues and costs and impacts of balancing generation, said M. Sudharshan, Manager, Consulting (Energy and Resources), Deloitte Touche Tohmatsu India Private Ltd.

Speaking at the forum organised by UBM India at The Residency here, Sudharshan said, “according to World Institute of Sustainable Energy, the total renewable energy potential is over 720000 MW. The State has the highest wind power installed capacity (which is 41 per cent of the country’s total wind capacity); close to 15 per cent of Tamil Nadu’s generation is met by renewables. More is possible through untapped potential” he added.

Tamil Nadu Solar Policy 2012 focuses on decentralised production, incentives and supports small systems. “While this looks positive, effective implementation is imperative for realising the benefits,” he added.

The lukewarm response to Tangedco’s (Tamil Nadu Generation and Distribution Company) 1000 MW bid (only 92 applications were submitted for 104 projects amounting to 499 MW) points to the possibility of continuance of the existing current deficit scenario.

Most of the project bids were for small project setups of 1 to 5 MW. “This shows the apprehension of bidders to go for larger projects due to Tangedco’s financial position, grid availability and stiff project deadline of eight months.”

The rate per unit of power offered by the Tamil Nadu Government to solar developers, though comparable to Andhra Pradesh, is the lowest compared to states such as Odisha and Gujarat.

Tangedco has offered Rs 6.48 per kilo watt as a final ‘workable’ tariff. This is comparable to the Rs 6.49/kWh offered by Andhra Pradesh, but far lower than Rs 8/kWh offered by Orissa and Rs 8/kWh by Gujarat.

Jayamurugan Knitting at Kullaigoundenputhur near Tirupur has taken the lead in operating the entire unit using solar power.

The unit, which belongs to the Velmurugan Dyeing Group of companies, is probably the first in the apparel cluster to venture into such production methodology to meet its entire power consumption.

Three knitting machines and a compressor in the unit are run from the power generated from the 40 photovoltaic cell panels and a small production-cum-conversion unit.

Company sources said that the system helped not only to overcome load shedding but also operate it during normal power supply hours. Almost 60 per cent of its daily consumption needs is met by this system, reducing the off-take of power from the state grid and in cutting down its expenses significantly.

The entire system was priced at Rs 17 lakh (excluding Rs 5.7 lakh received through the subsidy assistance of MNRE).



2 thoughts on “‘Solar power becoming a more viable option than wind’

  1. Finance Minister of India very rightly stated: ” A Rich Promoter and Sick Company is not acceptable”, similarly,

    “Very wise and Learned Policy Makers + Crorepati Legislators and Indian Administration and a huge tax loss making Policy is not Acceptable”

    Request you to read My Article in the March Edition of the Magazine “ENERGETICA” which discusses the good advantages of Interest subsidy over 12 years to offer solar PV power at around Rs. 5 to 7/kwh.

    The Lending agency (20%) + 3 New and First Generation Entrepreneurs (2 men + 1 Women) can form a team an sign PPA with State Government for each district.

    Such Team shall own a maximum of 100 MW in next 25 years with a first plant of 25 to 50 MW as an Illustration and then scale up to a maximum cap of 100 MW. This is to avoid Cartels and to control of Energy Prices in Future, if any. This is in the interest of COUNTRY FIRST / INDIA FIRST policy.

    No Capital Subsidy and a Big NO TO ACCELERATED DEPRECIATION (no tax avoiding policies please). Instead INTEREST SUBSIDY only against assured Generation is proposed.

    INTEREST SUBSIDY proposed can easily met with Taxes collected, National Clean Tech Fund, low debt kfw funds etc and paid in 12 years which gives Discount factor benefit to the Government and AAM AADMI (Common Man) too.

    This is also very good for Wind energy promotion (which produces approx 1.8 MU/year) without GBI, without 35% Accelerated Depreciation, without Capital Subsidy or Viable Gap funding, but, the Interest Subsidy.

    This is an input for the much anticipated policy on “Entrepreneur ship Funding” which will be best suited to collect the taxes from Corporate companies, instead of allowing them to get Accelerated Depreciation, Viability Gap Funding and fail.

    The taxes collected, National Clean Tech Fund shall act as equity and Interest subsidy (for low cost power generation, instead of Viable Gap Funding).

    Let us promote small, new generation entrepreneurs with learned business plan with finance numbers clearly defined in the policies related to Renewable Energy with Control Stake holding from Government till the equity and debt payment by these entrepreneurs to create good quality assets with mentoring and to provide the low cost energy to the common man.

    Request your advise and I volunteer to create such sustainable project development with a learned policy creation mechanism for the infrastructure Industry to make “Government as Partner” with land lease only and not to own like what many corporate companies got balance sheet funding based on land value, but, have miserably failed to deliver PPA with (mis) adventures of going to Other countries to acquire coal and then again seeking poor Indian money through “Indian Government” to alter the FIRM Contracts like PPA.

    For argument sake, if we assume that 1 MW solar will generate 1.6 Mkwh and rs. 1.2/kwh is rebate for AD taken by the investor = 16 x 1.2 = Rs. 19.2 lakhs/year

    [Now, Adani is negotiating the firm Contract PPA to get more, like wise biomass people who based their PPA on LCOE, but, are asking more money from Government, hence,
    Solar PV developers may also follow the same route after few years, wherein this rebate of AD given will not have any meaning!!]

    Total rebate given = 19.2/year x 25 years = Rs. 480 lakhs = Rs. 4.8 Crore (that too year wise depreciated / devaluated rupee value, which has no meaning !)

    But, the tax saved is = 80% of investment = 0.8 x 10 cr = 8 Crore, upfront, right in the first year, which is great value, which government would have used as Equity to develop many more MWs [refer trailing mails]

    Is this POLICY of providing 80% Accelerated Depreciation correct by any standards and why Finance Secretaries or policy makers can’t take note and issue corrective measure for INDIA FIRST Culture??

    MNRE, in its Draft policy has proposed 20 to 40% Viability Gap Funding, which will further worsen the LOSS to the government !!

    If Mahagenco (with 50% subsidy) goes ahead with the proposed business model, then, how and why State and hence Central government has to take the burden due to such errant policies??

    Constructive and studied policies to promote large number of entrepreneurs with learned business plan with financial numbers are very necessary for the progress of any Nation.

    Policies and the enabling tax advantages have made a big dent on Indian Economy without any good results esp in Renewable energy sector. Government transferred the Public Property to the Private Companies in the Form of Renewable Energy Generation through Capital Subsidy (or Viability Gap Funding) coupled with Accelerated Depreciation along with Low cost Debt fund to these Corporate companies / Project Developers – entrepreneurs, which are not paid back as few of these projects are not functioning and still no action taken to recover the Capital Subsidy paid or Tax recovery which was availed through Accelerated Depreciation (AD).

    If Government would have established all these projects from the Tax collections (which are doled out as free through AD), it would have needed only a fraction i.e only Rs. 51,504 Crores, which could have been managed from the taxes of Rs.137,344 Crores while retaining the land and property in Government’s name and could have generated lot of employment.

    But, by giving an opportunity to Private sector, many have failed to deliver and no Action.

    On the contrary, through ADANI power price revision Contract negotiation, the government (CERC) might be opening the chapter to renegotiate the Firm Contracts (PPA etc) in the name of Unviability (due to Indonesia Coal related rules, many NTPC projects are owned by Government, are they asking!!) etc… if this continues, then, all the failed PRIVATE projects will approach the Government for relief with some pretext including Airlines due to taxation or International Oil price escalations…. Does this imply that Private sector has poor governance and is coming back to Government for support at the cost of Poor Farmers or AAM AADMI, who are dying without water and electricity??

    Can you please ask the New Nation Leaders as to what is the meaning of Such Policy Making and for whose benefit and where is INDIA FIRST OR COUNTRY FIRST or why Common Man’s Interest is not at the first place while designing the Policy:

    MY VIEW POINT (Numbers shall be verified from the Concerned department for the final accurate values, which CAG will do for sure) :
    1). Through this policy, it is a Systemic transfer of Public Property to Private Companies, despite failure of many Biomass power projects and Wind mills with a great loss of Tax collection
    2). Lot of Debt is not recovered from Defunct projects
    3). Why not solar PV projects be developed in every taluka with local entrepreneurs by collecting the Taxes from Corporate cos and arrange Equity to these Entrepreneurs!!
    4). Let Govt have stake holding in these small, new generation entrepreneurs till they pay debt and equity by abolishing Capital Subsidy (Viable Gap Funding) and Accelerated Depreciaiton.
    5). International good quality investors can not avail AD, hence, there are playes from Potato Chips, Jewellary, Brewery or such industry to save taxes on profit earned through Accelerated Dep
    hence, a great loss to the national exchequre through this policy and hence the budget deficit…… CAG needs to take note…


    Is it not the time to take back / demand these Promoters of these non functioning projects to pay back the Capital Subsidy and the Tax saved through AD mechanism??

    Posted by praveen Kulkarni | April 10, 2013, 11:50 am
  2. MY VIEW POINT (Numbers shall be verified from the Concerned department for the final accurate values, which CAG will do for sure) :

    Total estimated Renewable energy project capacity = 12% of total installed 220GW = 26000 MW
    Renewable Energy Investment through Private Participation !! If Government wanted to put up this capacity
    Source Project Cost/MW Total estimated MW Installed Total Investment Made these years Equity Debt Capital Subsidy (or Viable Gap Funding): Loss to Govt Accelerated Depreciation (AD) possibly claimed): Loss to Govt Equity Tax collected instead of AD Job creation
    Rs. In Cr Crore In Cr In crore In crore
    30% 70% 30% or 1.5cr/MW 80% 30% =AD

    Biomass 6 4,500 27,000 8,100 18,900 6,750 21,600 8,100 21,600

    Wind 7 20,160 131,040 39,312 91,728 104,832 39,312 104,832

    Solar PV (Ground Mounted) 10 1,300 13,000 3,900 9,100 (MNRE is mooting VGF on top of AD??!!) 10,400 3,900 10,400
    Solar PV (Roof top) 16 40 640 192 448 60 512 192 512
    (rs 160 to 240/wp)

    Sub Total: 26,000 171,680 51,504 120,176 6,810 137,344 51,504 137,344

    Posted by praveen Kulkarni | April 10, 2013, 11:54 am

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