Solar power producers in Tamil Nadu will be paid Rs 5.78 per unit, among the lowest in the country, as per the draft tariffs set by Tamil Nadu Electricity Regulatory Commission ( TNERC).
In a draft consultative paper, the state's energy regulator has sought public comments before August 31, to aid in fixing final tariffs for solar power producers . These draft guidelines are separate from the state's plan to purchase 1,000MW of solar power at Rs 6.48 per unit under a separate tender process. The Rs 6.48 per unit offer had met with little success.
TN, which is reeling under a power crisis, is hoping to tap renewable sources to bridge the 2,000MW deficit. With abundant sunshine, it is well positioned to draw on solar power. But its offer may not enthuse investors.
TNERC's paper, released recently, said the draft tariffs were fixed based on the assumption that cost of setting up solar power plants were falling and therefore a 1-MW power plant could be set up at as low as 7 crore. Solar power producers dubbed the assumption as flawed.
"The price is disappointing and the calculation is awry," Rohit Rabindernath , Group MD and CEO, Zynergy. Some producers said the assumption of capital cost falling was not correct.
"A year back, solar thermal prices were lower than solar PV but now it is the other way around. With an influx of solar module manufacturers, there has been a notional drop in module prices which people have mistaken for a technological advancement . This price of 5.78 is viable only if the project cost is 6 crore but that is not the case now. This price is more a distress model than a viable model for solar companies," said K E Raghunath, managing director , Solkar Solar Industries .
The draft guidelines also suggested that power produced through solar thermal (or generated through steam from solar concentrators as in a thermal plant) is fixed at 8.34.
"The capital cost of solar PV is fixed at 7 crore and for thermal it is 11.5 crore. The capital cost of solar power projects is falling and it is currently much lower than the CERC rate fixed at 10 crore in 2012," said the paper. The tariff has been fixed after taking into considerations the cost of capital, maintenance , depreciation etc.
"The commission has carried out a detailed analysis of the existing procedures and policies before arriving at the unit cost," said the consultative paper .