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Solar power tariff in Tamil Nadu set to fall below Rs 4 per unit

Solar power tariff in Tamil Nadu set to fall below Rs 4 per unit


Solar power tariff in Tamil Nadu is set to fall below Rs 4 per unit. Tangedco will float tenders for 1500MW in the coming days and fix the the base tariff at Rs 4 per unit with the approval of the Tamil Nadu Electricity Regulatory Commissioner (TNERC). The power utility will present a proposal to TNERC for floating tenders.Based on previous tenders, when the final tariff has always been lower than the base tariff, this time too the rate is expected to fall below Rs 4. “We are seeking permission from the regulatory body to float the tender for solar power projects. This financial year, we need to set up 1500MW of solar power and the entire capacity will be established through tenders,” said a senior Tangedco official, seeking anonymity.

Since 2015, the solar tariff in Tamil Nadu has been coming down, except when it was fixed at Rs 7.01 per unit in 2015 for about a year. Since Tangedco floated tenders, the tariff has been falling consistently. From Rs 7.01, the tariff fell to Rs 5.10 per unit and then to Rs 4.40.”We are expecting the final tariff this year to be Rs 3.95 per unit. This will the lowest power available for Tangedco and we are seeking TNERC’s nod to permit this tariff for at least six months or till we meet the total capacity of 1500MW,” said the official. Like other states, the solar tariff in Tamil Nadu is also falling rapidly. But, unlike other states, land cost in TN remains high. “Here, the tariff which is fixed includes the land price. Unlike other states where the government allots land at a lower cost or even free, in Tamil Nadu, solar power companies will have to purchase land as per the market price,” said the official.

Tangedco has been fighting to meet the target. “It is true we fall below the target while floating the tender. But, each time the tender is floated, the tariff falls and we are able to get power at a lower cost,” he said. Tamil Nadu has so far commissioned 1600MW of solar power projects. “At present there are three tariff slabs for solar power and of the 1600MW commissioned, approximately 800MW is being evacuated during prime time every day,” he said.

Anand Gupta Editor - EQ Int'l Media Network


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