India: Tamil Nadu unveils ambitious solar policy

Titled the Tamil Nadu Solar Energy Policy 2012, the aim is to establish the state as a "solar hub" through the installation of one GW of solar energy annually between 2013 and 2015. To achieve this, a net metering program will be introduced, as will minimum solar power obligation (SPO) requirements, and a solar auction.

The majority of solar installations are expected to comprise utility-scale plants (see table below). To select project developers, a competitive bidding process will be introduced. Overall, the state envisions 250 MW of plants worth one to five MW, 600 MW of plants worth five to 10 MW, and 650 MW of plants over 10 MW. "Solar parks with a capacity of about 50 MW each will be targeted in 24 districts," added the Tamil Nadu energy department.





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Rooftop installations, meanwhile, are expected to comprise just 350 MW of the state’s three GW installation target. In addition to the introduction of a net metering mechanism, whereby excess energy can be fed back into the grid for "power credits", the state will also offer a generation-based incentive (GBI) worth INR 2/kWh (around €0.029; US$0.037) for the first two years, INR 1/kWh for the following two years, and INR 0.5/kWh for a final two years, for all systems installed before March 31, 2014.

Mandatory minimum requirements for the consumption of solar electricity will also be introduced for HT (high tension) consumers in the form of a solar power obligation (SPO). Under the state’s plans, 3% of energy will have to come from solar until December 2013; from January 2014, this will be increased to 6%.

The SPO will be administered by the Tamil Nadu Generation and Distribution Corporation (TANGEDCO) and will apply to HT consumers, who must either: generate the requisite amount of solar power themselves; purchase it from third party developers in the state; purchase renewable energy credits from solar projects (one credit for each MWh); or purchase solar power from TANGEDCO.

In addition to the installation of solar power plants, the Indian state of Tamil Nadu is looking to establish a domestic solar manufacturing industry. Specifically, it wants to manufacture wafers, cells, modules and balance of system components. It also wants to set up polysilicon manufacturing facilities (roughly 10,000 MT) in order to produce around one GW of wafers.

To encourage manufacturers, "appropriate" tax incentives will be provided to attract both domestic and international investors. "Lands will be identified for development of exclusive solar manufacturing parks. The state will promote setting up of solar manufacturing industries in these exclusive solar manufacturing parks to be established in the state," added the energy department.

Tamil Nadu is said to be particularly interesting for solar development, due to its high solar insolation of 5.6 to 6.0 kWh/square meter and around 300 sunny days a year.