Solar tariff fixed at Rs 5.1/kWh in Tamil Nadu

Solar power projects for which MOUs had been signed with Tangedco but could not be commissioned by Thursday will be paid only Rs 5.10 instead of Rs 7.01 per unit as per

the power purchase agreement (PPA). The Tamil Nadu Electricity Regulatory Commission (TNERC) has fixed the final tariff with effect from April 1, 2016. In a unanimous order, the TNERC has increased the tariff mentioned in the consultative paper floated in February by 9 paise per unit. 

So far PPAs have been signed for 1,400MW but only 812MW capacity projects have been commissioned. The TNERC has not considered Tangedco's proposal of lowering the tariff to Rs 4.66 in the consultative meeting held earlier this month. The TNERC continues with power purchase mode while other states have switched to tender mode and are capitalising on falling solar equipment prices. 

The Commission has observed that each bidding by different state utilities for solar energy finds a new low in terms of cost of energy. Various stakeholders attribute various reasons for such low tariffs. Some of them have said these prices are unsustainable. However, the fact remains that the prices for solar energy continue to fall and has reached as low as Rs.4.34 per unit as on date.

The solar power companies which have commissioned the projects are of small capacity except Adani Power company's project. Out of the 648MW for which Adani company signed PPA with Tangedco, around 314MW alone have been commissioned.


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