Tamil Nadu takes India's solar power capacity up 30%

Chennai: India's installed solar power capacity is poised to jump 30% with the Tamil Nadu government close to signing power purchase agreements for 700 megawatts (MW) by the end of October.

Once the plants are up and running, Tamil Nadu will have the second largest solar power capacity in India after Gujarat, the pioneer in such projects in the country.

India has 1,759.43MW of grid-connected solar power, with close to 800MW coming from Gujarat. The projects are expected to be ready for commissioning next year.

As part of TN's solar power policy, which aims at installing 3,000MW of capacity by 2015, a total of 52 companies will sign agreements with the Tamil Nadu Generation and Distribution Corporation (Tangedco) for capacity totalling 698MW at a tariff of 6.48 per unit (with a 5% increase annually for 10 years).

This comes at a time when the country's national solar policy is tottering. The second phase of the Jawaharlal Nehru National Solar Mission (JNNSM) has been delayed by over five months with no sign of the programme being kick-started any time soon.

Solar power is the most expensive form of renewable energy and rupee depreciation has added to the woes of companies importing high-end photo voltaic panels.

"There has been a lot of uncertainty over solar power companies and negativity had set in. But now there are projects in the pipeline and activity for players across the board will go up," said Madhavan Nampoothiri, founder and director of RESolve Energy Consultants, an energy consultancy firm.

Last week, Tangedco held individual meetings with solar power developers asking them to submit documents for proof of land ownership and bank guarantees for financing. "Thirty companies are yet to submit the documents and we have given time till October 30. Once this is in place, power purchase agreements will be signed," a senior official from Tangedco said.

Companies that have the documents in place have started working on the project. "The meeting with the Tangedco chairman and other members was a manner of assurance of support and we have started progress on our project. The team is on the site and we are in talks with banks for financing," said T R Kishor Nair, President, Welspun Energy, which is setting up a 60 MW plant in Trichy district. Solar policies in other states haven't made as much progress and capacities also aren't as large as in Tamil Nadu. While Andhra Pradesh has a target of 1,000 MW, tariff is a deterrent for investors as it is fixed at Rs 6.49 with no annual hike. The programmes in states like Punjab (300 MW) and Karnataka (130 MW) are on a smaller scale and are in the nascent stage. What adds to Tamil Nadu's attractiveness is that the state has high solar radiation of 5.6 - 6.0 kWh per square meter with around 300 clear sunny days in a year, the third highest in India.