Finance, Other, solar

Solar Purchase Obligation to help development of solar markets in Tamil Nadu

According to reports, by bringing in the ‘solar purchase obligation,’ the Tamil Nadu government has created the basis for the development of solar power in the State. In other words, it has created the demand. The SPO makes it mandatory for certain classes of electricity consumers to get a part of their consumption from solar plants.

While the SPO has been challenged in the Appellate Tribunal for Electricity by the Tamil Nadu Spinning Mills Association, the mandatory purchase rule has given that little nudge needed for developers to put up solar plants.

Those who put up the plants can be divided into four broad classes —Independent Power Producers (IPPs) who put up large-scale projects and sell the electricity; industries that wish to put up solar projects on premises either for energy security and/or for meeting the SPO; educational institutions which may want to put up rooftop solar plants either to meet their obligations or expose their students to this technology; and households.

For all but the ‘households,’ the solar purchase obligation is largely the raison d’etre for putting up solar plants. For the IPPs, the purchase stipulation creates demand, and hence gets customers.

The Tamil Nadu Solar Policy was introduced in October last. Till then, the State had solar power capacity of 7 megawatts (MW). Now, as a consequence of a tender floated by the Tamil Nadu Generation and Distribution Company (TANGEDCO), at least 226-MW worth of projects are very likely to be set up within a year.

This apart, there are many other private developers such as INDarya Green Power, which intends to put up a 300-MW solar park.

Given the level of interest among developers, it is not inconceivable that the State could end up with 1,000 MW in the next couple of years.

For large industries, such as automotive companies, it is cheaper to put up their own rooftop or ground-mounted plants than to buy solar power to meet their SPO. Many companies are planning such projects.

A good example is that of the Daimler plant near Chennai, which produces Daimler Benz trucks. The company has set up a 300-kilowatt (kW) rooftop plant and has said it will do more.

For colleges and schools, it makes sense to put up a solar plant on their own roofs, rather than buy power from elsewhere. Just as for industries, the availability of large roof space is an advantage for colleges.

Today, more and more colleges are looking at building solar curricula, and a campus solar plant provides students a touch-and-feel of the technology. A good example is the B.S. Abdur Rahman University, which is keen on introducing solar courses. The college is putting up, for starters, a 150-kW plant. A.M. Jain College in Chennai is working on installing a 1-MW rooftop project.

It is only in the case of small rooftop plants on individual houses that the movement is yet to take off. A rooftop solar plant is still not economically attractive.

However, the State government has announced a few sweeteners. One is a generation-based incentive of Rs. 2 a unit. The other is the Rs. 20,000 subsidy which the Chief Minister announced recently for capacities up to 1 kW. But the rules are still being formulated.



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