Tamil Nadu is now the dominant state overall in India in terms of equipped solar power capacity, with 1,368 MW as of August 22, 2016, according to market analyst Bridge to India. Although this falls far short of its 2012 goal of reaching 3 GW of cumulative capacity by 2015, it’s still nothing to be trifled, and a testament to how seriously the state has taken its goal of transitioning to cleaner forms of energy production.
Federal incentives for solar energy in India
The Jawaharlal Nehru National Solar Mission by the Ministry of New and Renewable Energy (MNRE) has the ambitious goal of reaching 100 GW of grid-connected solar power by 2022, and making India a global leader in the development of solar energy. Currently India is on track to reach this goal, and a recent poll we conducted via Twitter showed that half of the respondents felt India would surpass this and install “much more than 100 GW” by 2022, proving that optimism abounds on this question.
The JNNSM is geared towards large-scale solar installations and not small-scale residential plants. It is rolled out in phases and batches, each of which consists of a reverse bidding auction. This means that bidders bid the price per kilowatt hour at which they would be willing to sell the electricity. The most current auction, Phase II Batch I of the JNNSM, observed 505 MW of solar projects that receive authorization.
State incentives for solar energy in Tamil Nadu
The government of Tamil Nadu has taken crucial action in stimulating solar energy in the area. What follows are different incentives and economic rules they have endorsed in order to prompt solar energy in the state.
Incentives for domestic solar rooftops
Tamil Nadu’s Chief Minister offered an impetus to domestic solar rooftops for both individuals and groups. In each case, the following rules are applicable:
1. Applicants will be considered for a subsidy of 20 per watt peak for installations up to 1 kilowatt peak per house or flat (amounting to a maximum subsidy of 20,000 per house or flat).
2. The domestic consumer must have a TANGEDCO service connection under tariff LA-1A.
3. The subsidy scheme applies only to grid-connected rooftop solar photovoltaic systems, and covers solar PV modules, a rooftop support structure (i.e. mounting system), a solar grid inverter, any cabling, and any protective devices. Off-grid systems are ineligible.
4. Surplus electricity can be exported to the grid via a net metering agreement. Exported electricity will be credited to the consumer up to a limit of 90% of any imported electricity over a 12 months settlement period.
Further rules and both online or offline applications are found on the solar rooftop incentive pages for both individuals and groups. Energy transition in Tamil Nadu has number of supports and focuses, yet still needs net metering for industries & commercial establishments.
Tax rebates
There is a VAT refund of 50% on all capital goods for power production that are manufactured in Tamil Nadu. However, these tax benefits are only applicable for captive projects.
Fees and charges
Solar energy generators have to only pay 30% of the transmission, wheeling, scheduling and system operation charges that are applicable to conventional power generators.
Solar energy generators in Tamil Nadu will be levied 50% of the cross-subsidy surcharge for third-party open access consumers.
Other monetary incentives
Because solar installations are low-carbon, they are eligible for receiving Certified Emission Reduction (CER) credits from the Clean Development Mechanism (CDM) board. These credits can then be traded in various emissions trading markets.