In a ‘consultative paper’ put up for comments from the public, the Tamil Nadu Electricity Regulatory Commission has pegged solar power tariff at Rs 5.78 a kWhr.

Anybody can put up a solar PV project and sign a 25-year power purchase agreement with the State electricity distribution company, Tangedco, and get Rs 5.78 a unit.

For solar thermal and kilowatt-scale plants, the regulator has suggested tariffs of Rs 8.34 and Rs 8.15, respectively.

These tariffs have been calculated on the basis of various cost assumptions, such as of capital, operations and maintenance and interest charges.

The commission has invited people to give their comments by August 31.

Solar industry players that Business Line spoke to were unenthusiastic to the suggested tariffs. They could not help drawing a parallel with the recently-concluded bidding round for solar projects in Tamil Nadu — the tariff discovered through the process was Rs 6.48 with 5 per cent annual escalation for the first ten years.

Stressing that the suggested tariff of Rs 5.78 a unit is “not at all feasible”, P.V.R. Krishna Rao, founder of Earthcare, a solar industry consultancy, said that with the present level of the rupee-dollar equation, module prices firming up and the threat of anti-dumping duty being brought in, there is no way that a tariff of Rs 5.78 will work.

Pointing out that the Commission had assumed an interest rate of 12 per cent, Krishna Rao wondered which banker is prepared to lend at 12 per cent, especially for a project in Tamil Nadu.

N. Sundararajan, Managing Director of Sunlight Ventures, a solar start-up, hold a similar view. Sundararajan notes that on the one hand global module prices are firming up and on the other the rupee is depreciating. Therefore, it would be wrong to assume that solar prices were falling, he said.

ramesh.m@thehindu.co.in

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