Tamil Nadu to tax rooftop solar, cut support
CHENNAI: At a time when the popularity of solar power as a cheap source of energy is growing, the state-owned power utility has come out with a proposal that will reduce the return on investment for citizens installing rooftop solar plants. It has also proposed to add a tax on the power generated.
Currently, units of electricity generated by roof-top solar plants are subtracted from the consumer’s bi-monthly use of power from EB source before billing. Now, Tamil Nadu Generation and Distribution Corporation (Tangedco) proposes to fix the rate for solar power generated by roof-top plants at 50% of the lowest price paid to solar power firms. This translates into a saving of just Rs 2 per unit for domestic consumers with solar rooftop plants. In addition, Tangedco seeks to allow residents to install a solar plant of a capacity only 50 % of the contracted demand. Currently, there is no cap on the size of a solar plant that can be installed on your roof. Finally, the power discom has sought permission to levy an additional tax on the solar energy generated from rooftop plants. The proposal, submitted to the Tamil NaduEnergy Regulatory Commission (TNERC), has been dubbed retrograde by experts who say it will drive away domestic users from investing in solar rooftop plants as the rate of return will become unviable.
The reasons trotted out by Tangedco for making these proposals — that it is bleeding money and these moves would help it curtail losses — haven’t cut much ice with experts who say the total installed capacity for roof-top schemes is a mere 91 MW of a total solar installed capacity of 1,653 MW.
In addition, rooftop solar plants cut down on transmission and distribution losses as they are closer to the point of electricity consumption; currently, Tangedco’s transmission and distribution losses are anywhere between 19% and 25%, making the discom’s proposal illogical, say experts.