Tamil Nadu cuts FIT

The Tamil Nadu government has reduced the tariff for solar PV projects in the state to 5.10 INR per kWh ($0.08) from the earlier 7.01 INR per kWh ($0.11). In an order passed formally on March 28, 2016, the Tamil Nadu Electricity Regulatory Commission (TNERC) stated that the tariff for solar thermal projects will be 11.12 INR per kWh ($0.17).

The tariff of 7.01 INR per unit had been in force from September 2014. It was initially set for one year, but was later extended until March 31, 2016.

The new tariff has come into effect on April 1, 2016, and is applied to all solar power plants commissioned during the control period of the order. TNERC has factored in module degradation of 0.6% in the capital cost. It noted that stakeholders believe reduction in module prices is temporary and that the commission must consider the increase in exchange rate variation. Nevertheless, the commission pointed out that though every bidding brings cost of solar energy further down during the tender process, yet “the fact remains that the prices for solar energy continue to fall and has reached as low as 4.34 INR per unit as on date”.

TNERC says that the southern Indian state has installed 581.26 MW of solar power capacity by Feb. 29, 2016. However, the Ministry of New and Renewable Energy (MNRE) puts the figure for the state at 635.87 MW by March 7, 2016 (see article Indian Solar Touches 5.7 GW), placing it among the top 5 states in the country with maximum solar capacity installed. India is close to touching 6 GW of solar power capacity. For 2016-17, the target is to have 12 GW of installed solar power capacity. The southern states including Tamil Nadu are expected to add 80% of all new utility scale solar capacity in 2016, according to clean energy consultancy Bridge to India.