Tamil Nadu Government has decided to procure 1500 MW of solar power from 16 companies that have invested around Rs 9,000 crore in the State. The price fixed is Rs 3.47 per unit, which is far below the price prevailed in February this year.
According to industry sources, the tariff of Rs 3.47 is well above the lowest solar bid in the country so far of Rs 2.44 per unit, made at an auction at the Bhadla Solar Park in Rajasthan in May. They also noted compared to February, it is a substantial drop from the winning bid of Rs 4.40 per in the state.
The Tamil Nadu Generation and Distribution Corporation Limited (TANGEDCO) signed MoU with four companies today and the balance 12 MoUs will be signed before September 30, 2017, said the state government.
The companies include NLC Ltd (709 MW), Bengaluru-based Raasi Green Earth Energy (100 MW), NVR Energy Pvt Ltd, Renew Solar Energy Rajasthan Pvt Ltd, Shapoorji Pallonji Infra are among the top producers who have signed MoU with the state.
Currently solar generation capacity in Tamil Nadu is 1747 MW.
By 2021, the state has set a target to generate 5000 MW, including the 1500 MW for which MoUs were signed.
Raj Prabhu, CEO and Co-founder of Mercom Capital Group, said, “Developers agreed to pay Rs. 3.47/kWh back in July as it was the lowest quoted tariff. There are various factors that determine a tariff and a low tariff in Rajasthan cannot be compared to the low tariff in Tamil Nadu. The solar insolation levels are much different, solar park infrastructure provided are not the same, project size, DISCOM creditworthiness and other factors all come to play when determining tariff. Simply put, no two tariffs are the same. It is healthy to set tariff based on realities on the ground rather than trying to match the previous lowest tariff which is unrealistic.”
