Solar developers looking to make merry in Tamil Nadu

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Tamil Nadu has no shortage of sunlight but the state is chronically starving for consistent power generation, which is why it is heavily relying on solar power gradually. “Industrial consumers, frustrated by long hours of power outage, are now “taking solar very seriously,” says Pasupathy Gopalan, managing director, SunEdison, an American firm. SunEdison is among the companies, that is keen on developing solar projects in the state. While most developers prefer to sell power directly to industrial consumers, who are mandated to buy the power source.

Rohit Rabindernath, managing director and CEO, Zynergy, finds tariff discovered through ‘reverse bidding’ un-remunerative. Selling to the utility at the ‘average pooled purchase cost of Rs 2.54 in Tamil Nadu and getting tradable renewable energy certificates (RECs) is also not an option for him because no banker recognises REC income. These companies find the proposition of selling power to paying consumers more lucrative.

Zynergy for one is confident of getting tariffs of Rs 9 and above, while any income from RECs would be shared with the customer.

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Unless exempted from ‘cross-subsidy charges’, developers will have to get into the ‘group captive’ model to avoid any levy, which implies forming a separate company with power purchasers as shareholders. This model is considered expensive, because one needs to incorporate separate companies for various projects and customers will have to invest in the equity. However, many developers seem to be confident that the Tamil Nadu Government will exempt solar power from cross-subsidy levy.

While land availability is not a concern, the part of finance, on the other hand, is seen as a challenge. Raising equity is no problem, but securing debt requires considerable efforts.

These developers believe that if the state Government can offer easy loans in the form of Tamil Nadu Industrial Investment Corporation.

Aadeetya  S, EFYTIMES News Network

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