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Tamil Nadu fast emerging a solar power destination

According to reports, with 7,162 MW of installed wind capacity, Tamil Nadu is the leader in wind power in the country. But in ‘solar’ the State ceded the leadership position to Gujarat, which has over a 1,000 MW. However, the growing solar project pipeline in Tamil Nadu suggests that the State is fast emerging as a solar destination too.

With a project pipeline of over 700 MW, most of which could come within one year, the State is gearing up to becoming a close second to Gujarat.

Things have been happening ever since the State Government brought in its solar policy last October. The bidding process that was set in motion under the policy provisions has resulted in the award of solar power projects worth 226 MW. Letters of Intent have been issued to the winning bidders. Apart from this 226 MW of projects, a number of other companies have announced their plans to put up projects in the State.

The Indarya group proposes to develop a 300 MW solar project near Manamadurai. Another company, Raasi Green, has said it would put up a 100 MW plant.

In addition to these, there are many companies who wish to put up solar plant. For instance, a group of seven auto components manufacturing companies are putting up a 50 MW plant near Tiruchi. Similarly, another group of chemicals and pharma companies, led by Shasun Chemicals and Pharmaceuticals, is working on its own 50 MW plant. Swelect Energy, formerly Numeric Power Systems, is planning to put up a 25 MW project, near Coimbatore.

While these are the large, ground-mounted projects, several industries, and practically every educational institute in the State, are working on putting up rooftop solar projects.

A number of factors seem to go in favour of Tamil Nadu. First, industries in the State are major users of the ‘accelerated depreciation’ facility. The tax sop used to be available for wind power, but was withdrawn with effect from April 1, 2012. Profit-making companies therefore have only ‘solar’ to avail themselves of the AD benefits.

Secondly, Tamil Nadu is the only State where projects can come up not just through a competitive process, observes Vineeth Vijayaraghavan, an industry expert and Founder-Editor of Panchabuta, an online industry newsletter.

Third, the State Government has brought in a ‘solar purchase obligation’, which major specified consumers will have to meet. This has created a demand for solar.

Finally, unlike in wind, there are no evacuation issues in solar. Unlike wind, where the projects can come up only at windy sites, solar projects can be put up where there is capacity in the evacuation infrastructure.

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