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Within the second half of 2020, Ok Ganesh, a small enterprise proprietor close to Dindigul, invested near ₹5 crore to arrange a megawatt (MW)-sized rooftop photo voltaic unit at his manufacturing unit. The challenge was a part of his long-term plan to shift away from state-owned energy utility and it’s ever rising tariffs for industrial prospects to a greener vitality supply inside his mill’s premises.
“We’re a high-tension shopper and we’re solely depending on Tangedco for energy provide,” Ganesh advised BusinessLine. “I invested within the unit assuming a 5-6 yr payback interval and 15 per cent annual financial savings in our vitality prices. The capital I invested will also be used as a tax write-off over this era.”
Nevertheless, the state electrical energy board’s reluctance to approve new rooftop photo voltaic tasks this yr has left his plans in limbo.
“The approvals from Tangedco (the state energy utility that could be a subsidiary of Tamil Nadu’s electrical energy board) have been pending for eight months now; so my capital is caught so long as the approvals don’t come by means of,” Ganesh mentioned. “We don’t have any various to Tangedco for energy provide and I don’t know if their causes for not approving are business or political. Our utility has not been rejected; there may be simply no determination but.”
Uninterrupted energy provide, depreciation write-offs and prohibitive business tariffs for electrical energy seem like the first causes that companies in Tamil Nadu need to shift away from their dependence on state-owned energy utility Tangedco and set up their very own non-public era models. The only means to do that is to arrange a rooftop photo voltaic unit throughout the enterprise premises however, like Ganesh has learnt the exhausting means, it’s additionally the place the state’s established electrical energy hierarchy is least keen to relent.
Bold targets for rooftop photo voltaic
Rooftop photo voltaic models are a type of distributed energy era the place householders, factories or companies can arrange photo voltaic panels on their roofs or on adjoining open area to supply a portion of their electrical energy wants, separate from the electrical energy in any other case provided to the constructing from the regional grid. The central authorities has set an all-India goal of 40,000 MW of photo voltaic rooftop to be arrange by 2022. India’s capability, as of December 2020, stood at a fraction of that – roughly 6700 MW.
Tamil Nadu was an early mover within the renewables vitality area, main the race with industrialised friends akin to Karnataka, Gujarat and Maharashtra in incentivising the primary flush of photo voltaic and wind energy installations. Nevertheless, in the previous few years, the state has begun to tug within the reins on its early enthusiasm and has dropped rankings within the leaderboard of annual capability addition in renewables.
As well as, Tamil Nadu presently has extra restrictive insurance policies on organising rooftop photo voltaic models that work together with the state grid, aggressively slashing monetary incentives for Tangedco’s prospects who might want to arrange their very own non-public era.
As of final December, Tamil Nadu has a complete put in photo voltaic rooftop capability of 537 MW, of which 75 per cent is industrial, 19 per cent is business and 6 per cent is within the public sector, in accordance with information from Gurgaon-based renewable vitality consultancy agency Bridge to India. Whereas the state constructed an early lead in including capability, current information exhibits that frequent coverage adjustments discouraging new rooftop photo voltaic installations have considerably slowed down the tempo of development. (Refer chart.) These coverage flip-flops fly within the face of the state’s personal goal to arrange 3600 MW of rooftop photo voltaic by 2023.
Altering incentives
“Tamil Nadu misplaced the lead (in rooftop photo voltaic) in 2017 as a result of web metering was not provided after 2016,” Vinay Rustagi, Managing Director, Bridge to India, mentioned. “At present solely web billing is accessible to low-tension customers (beneath 112 kW) and there’s no grid connectivity provision for high-tension customers.”
Internet metering and web billing are two methods to calculate compensation paid to non-public rooftop photo voltaic models that promote their extra non-public energy era to the grid utilizing a bi-directional meter. Within the web metering association, the producer-consumer (pro-sumer) can can subtract the vitality they promote (by way of models) to the grid from the variety of models that they purchase. The distinction between these two figures is billed in accordance with normal slab charges. Below the online billing association, the pro-sumer sells their extra vitality to the grid at a normal feed-in tariff whereas the vitality they purchase will likely be charged at slab charges. Given the huge distinction between the feed-in tariff (principally below Rs 2 a unit) and the slab charges, the financial savings for pro-sumers are far decrease below web billing than below web metering.
“Tamil Nadu has an bold rooftop photo voltaic capability goal and the state has engaging radiation and a excessive demand from business and industrial customers to arrange rooftop models. However progress is proscribed as a result of these unhelpful coverage measures,” Rustagi mentioned.
Tangedco’s losses
The state’s reluctance to approve new rooftop photo voltaic tasks, regardless of current orders from the the electrical energy regulatory fee (TNERC), has hit industrial customers – who pay the very best tariffs – notably exhausting. If Tangedco’s value of energy provide per unit averages at Rs 8.20/kWh (kilowatt hour), it must cost high-tension industrial prospects as a lot as ₹11 or 12 per kWh to offset low tariffs to residences or free energy to agricultural customers.
Regardless of repeated requests, the chairman of the state’s electrical energy board has declined to answer BusinessLine’s queries. Nevertheless, information from the Ministry of Energy provides some clues as to why Tangedco’s has shied away from embracing non-public era of inexperienced energy.
As of June, Tamil Nadu’s energy utility has the very best backlog of unpaid dues (₹18,370 crore) that it owes its main large-scale energy mills, in comparison with the remainder of the nation. The state additionally ranks on the backside by way of ease of funds to mills. For a utility already struggling to pay its collectors, dropping any enterprise from high-value bulk energy prospects, like these within the business and industrial classes, as they change to rooftop photo voltaic would solely exacerbate its personal monetary troubles.
Face-off with the regulator
Final month, the TNERC directed Tangedco to course of all pending functions from excessive stress industries for organising rooftop methods. Tangedco, nonetheless, took this dispute additional to the Madras Excessive Court docket.
“Tamil Nadu could be very distinctive in not permitting high-tension customers the choice of web metering, the place they’ll export surplus energy to the grid. In the event you don’t have this facility, quite a lot of the vitality generated is prone to go waste,” KR Harinarayan, Founder, U-Photo voltaic Clear Vitality, which works as an engineering, procurement and building contractor with photo voltaic rooftop prospects throughout a number of states, mentioned. “In consequence, although Tamil Nadu has numerous industries and firms with excessive energy necessities and the capital wanted to arrange rooftop models, many are reluctant to take action. Solely industries that may take in all the facility generated by means of the yr, eg these which function 24*7 like spinning mills or giant auto firms, discover rooftop a viable choice right here.”
Except for this, the inordinate delay in approvals has decreased the urge for food for brand spanking new installations. “No high-tension approvals approvals have come from Tangedco this yr because of the case they’ve introduced earlier than TNERC,” Harinarayan mentioned. “In consequence, even when prospects come to make use of asking to arrange rooftop now, we’re advising them to attend until there may be some readability in coverage. Nevertheless, we’re optimistic that this difficulty will likely be sorted out quickly.”
Issues are starting to lookup although, after the current regime change within the state. “With the brand new authorities in place, we hope that a few of the restrictions on grid-interactive photo voltaic vitality will likely be resolved quickly,” P Ashok Kumar, President, Tamil Nadu Photo voltaic Vitality Builders Affiliation, mentioned. “This week, the TNERC has revealed draft pointers that may permit web metering facility for residential rooftop models as much as 10 kW, which is an enormous profit for small-scale customers. There are additionally some concessions for low-tension business and industrial customers with photo voltaic rooftop so long as they pay a ₹1.27 per kw/hour networking cost to Tangedco. Given these new pointers, I consider there may be scope to work additional with the federal government for locating some decision for high-tension prospects as effectively.”
Increase time for residences
At the same time as demand within the business and industrial classes falling, some contractors are seeing an uptick in residential demand for photo voltaic rooftop in Tamil Nadu, JB Sathishkumar, proprietor of Kanchipuram-based Dynamic Energy Programs mentioned. “Put up-covid, now that so many individuals are working from house, there’s quite a lot of demand for uninterrupted energy provide at residences and small enterprise. I’ve been promoting rooftop methods for households for 12 years in Tamil Nadu and I did essentially the most enterprise in 2020.
“Organising grid connectivity with photo voltaic is difficult. Clients who used to promote extra energy to the grid discovered that they obtain common of ₹1.8 to ₹2 a unit, relying on the bottom bids for that day pan-India. In order that’s not useful in case your value of energy from the grid is ₹6-7 a unit. As an alternative now, most of my prospects are opting to incorporate battery storage with their rooftop models, although this makes the entire set-up dearer initially,” Sathishkumar added. “Clients typically set up 1-5 kW models, primarily based on their vitality utilization, the variety of home equipment and so on, It may be troublesome to get a financial institution mortgage to arrange these models, however prospects who can afford the upfront value are taking this route increasingly more now.”
P Suresh, a resident of a south Chennai suburb, put in a 3 kilowatt rooftop photo voltaic unit backed with batteries at his bungalow, the place he runs a enterprise consultancy agency from the highest flooring. “I assumed organising a photo voltaic unit can be extra economical than simply utilizing an inverter to final by means of the facility cuts,” he advised BusinessLine. “I get about six models of energy a day; it’s not rather a lot however the lights, followers and web at my workplace don’t go off throughout an influence lower. The profit for me is that as a result of it’s an asset of the corporate, I can write off the capital value over its lifetime.”
Tanya Thomas is an unbiased journalist. The reporting for this story was supported by a grant from the Earth Journalism Community.
(Some names have been modified to guard privateness.)
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