Tangedco Fights Solar!

The U.S. utilities have been waging war against rooftop solar energy systems in numerous U.S. states. In some states they have won by lowering the compensation for excess solar power fed into the grid, putting a fixed tax on solar systems and in general making life very difficult for rooftop solar energy developers and owners. Distributed energy source (DES) has been cited as an existential threat by utilities as it cut the demand for their main product – electricity.  Now India will also see the same fight between the utilities and rooftop solar energy.

TANGEDCO which is the state-owned distribution utility for the southern state of Tamil Nadu has fired the first shot in this battle. The company has proposed a number of retrograde steps to slow down the growth of rooftop solar energy in that state. It proposes three measures against rooftop solar:

a) Reduce the FIT rate given to solar energy

b) Propose a tax on all rooftop solar energy systems

c) Cap the size of the rooftop solar energy system to 50% of the contracted demand

Also, read Why is power surplus Tamil Nadu going for another Solar Tender

These proposals are quite funny as rooftop solar energy has been a failure in India’s overall booming renewable energy sector. Despite numerous government incentives the sector has failed to take off as there is a lot of ‘on the ground’ issues mainly due to utility bottlenecks. As it is, rooftop solar has not even touched the 100 MW mark in Tamil Nadu where more than 90% of the installations are utility-scale solar energy projects.

Rooftop solar has massive potential in India and lots of benefits for all stakeholders except the utility. The government has been trying to incentivize the utilities to support rooftop solar energy but not with too much success.

I think this sets a precedent to how other utilities in the 30 odd Indian states will act going forward as rooftop solar penetration rises inevitably with cheaper prices. The reaction and rulings of the state regulation TNERC will also be interesting to watch.

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