Tamil Nadu Meets Only 9% of Target for Rooftop Solar Panels; Experts Explain Why

Tamil Nadu has managed to install only nine percent of its own target for solar rooftop solar as of 31 March 2021.

For a sun-scorched Chennai, desperately looking for a hero, ‘Solar’ Suresh has been an ideal candidate for over a decade. He has not faced a single power cut, something that is a common phenomenon in the state, since he switched to renewable energy.

The Tamil Nadu Solar Energy Policy was announced in 2012 with an aim of generating 1,000 Mw of solar power every year from 2015. It had made rooftop solar panels mandatory for new buildings. Back then, Dwarkadas Suresh used to be bombarded with calls from consumers, especially because the state was offering subsidies for those who were willing to make the switch. However, in the past four years, the enquiries have dipped drastically owing to exorbitant delay in the disbursal of subsidies.

The state that was the first to come up with a renewable energy policy in the country has managed to install only nine percent of its own target for solar rooftop as of 31 March 2021, according to a report by Tamil Nadu Electricity Regulatory Commission. The solar energy target of the state is envisioned at 3,600 MW by 2023.

Tamil Nadu Energy Development Agency (TEDA), which is the nodal agency for implementing the project, stated that only 3,647 rooftop solar plants were installed by domestic consumers between 2014 and 2018.

The sales slid down drastically to 317 in 2017, with only 226 rooftop plants sold till October 2018.

The Quint looked at the factors that have led to consumers being discouraged from switching to solar energy while living in a state that enjoys sunlight all through the year.

Jayalalithaa’s Solar Energy Scheme Languishing

Former Chief Minister Jayalalithaa had announced the ‘Capital Incentive Scheme’ to promote solar energy among domestic consumers by giving a capital subsidy of Rs 20,000 per kilowatt (KW) for grid-connected photo voltaic systems in the state.

For example, if a consumer installs a 2KW solar project, they get Rs 20,000 subsidy for the first kilowatt from the state government. Further, an additional 30 percent subsidy is given by the Ministry of New and Renewable Energy (MNRE). So in total, the consumer gets Rs 48,000.

However, The Quint spoke to over 15 solar power plant installation companies in Chennai and experts who said that for the past five years, no consumers have received subsidies from the state.

"I completed grid-connected rooftop solar projects under the 5MW scheme seven years ago. The government launched Phase II of the same scheme, but I am yet to receive my dues of over Rs 55 lakh from Phase I."

Ramesh Jagannathan, Consumer

"First, you need to pay bribes to be able to move your application and then there is a long wait for the subsidy. There are consumers waiting for the past six years for their subsidies to be granted. Many officials, when they come for inspection, also intimidate the consumers saying that if they can afford to build a lavish house and make an initial investment for the panels they shouldn’t receive the subsidy," said an official in TEDA.

‘Wrong Perception That Rooftop Solar Will Result in Commercial Losses’

Policymakers told The Quint that the scheme of 100 units of free electricity, announced by former Chief Minister Jayalalithaa, is affecting the state's exchequer.

The loss suffered by the Tamil Nadu Generation and Distribution Corporation (TANGEDCO) for the financial year 2017-18 is to the extent of ₹7,760 crore.

A senior IAS officer who worked in the sector during the formulation of the policy told The Quint, "This sad progress is because of poorly implemented regulations, pile-up of financial losses and a series of policy concessions being doled out without addressing the financial potential. This has discouraged consumers."

Environment activist Nityanand Jayaraman, who installed solar panels on the rooftop of his home seven years ago said, “The problem with rooftop solar is that, only the customers in the high paying slab consuming over 300 units, can afford to install these panels. Why would the state be interested to give me concessions because they would not want to lose a consumer like me who is making the 100-units-subsidy scheme possible for many others?” he stated.

“There is a wrong perception that rooftop solar will result in commercial losses. Actually, this doesn’t affect the losses at all and in fact will only help the debt-ridden sector," said Martin Scherfler, co-founder of Auroville Consulting, who works closely in the renewable energy sector.

Shortage of Meters & Net Metering Methods Detrimental to Solar Energy User

Recently, the Tamil Nadu Solar Energy Policy 2019 introduced two metering mechanisms for rooftop or ground mounted solar energy systems – net feed-in and gross feed-in.

Martin Scherfler pointed out that introduction of network charges (₹0.83 per unit and ₹1.27 per unit for High Tariff and Low Tariff consumers respectively) is a dampener.

“Lack of subsidies isn't what is holding back consumers. People are willing to wait for years to reap the benefits. But it is the policy in terms of metering that is discouraging consumers. In the new system, the payback returns has gone up from 6 to 10 years.”

Dhanush N Kuttava, Solar Town

A solar plant installer told The Quint that another reason for the dwindling numbers of consumers is because several applications seeking connection to the grid were pending at various unit offices for months due to the shortage of net meters.

Another surprising issue flagged by Das was, "The officials who read the meters don't even know to do it well. There is a huge margin of error. Also, no electricity board cards are provided for those who’ve switched to solar energy. This makes the entire process not at all transparent."

Striking Down the Subsidy-for-All Can Aid the Solar Power Sector?

All experts and two senior officials in the sector were in consensus that the ‘100-free-units’’ subsidy needs to be waived and concession should be given to select households that fall under a certain economic bracket, so as to minimise financial losses.

‘Solar’ Suresh explained that the “state needs to focus on enabling large-scale renewable energy installations so as to measure the difference in energy consumption.”

"The discussion around rooftop solar and subsidies needs to be de-linked from the discussions on TANGEDCO’s financial performance," pointed out Scherfler.

Fair feed-in tariffs and an easier installation process for rooftop solar energy is required in order to make Tamil Nadu the renewable energy leader once again in the country.