Briefing Note: Financial attractiveness of Rooftop Solar Energy for (LT) Commercial and Industrial Consumers in Tamil Nadu

Tamil Nadu is making significant strides towards a sustainable energy future, supported by announcements of adding 20 GW of solar energy capacity. The state’s policy and regulatory frameworks, including the Tamil Nadu Solar Policy and the Generic Tariff Order, are driving the adoption of grid-interactive distributed solar energy. In the Generic Tariff Order, net feed-in tariffs were revised, and network charges were introduced for gross generation from installed solar PV systems. Additionally, electricity tariffs were revised for all consumers in Tamil Nadu as of 1st July 2023 which also included a revision of network charges applied on gross generation of solar energy. This prompted the query about the current financial attractiveness of rooftop solar systems for C&I consumers in Tamil Nadu.

This report focuses on determining the ‘financial attractiveness’ of rooftop solar for C&I consumers under the Low-Tension (LT) category in Tamil Nadu. In the report ‘financial attractiveness’ of grid-interactive rooftop solar PV system is defined as a system that achieves a simple payback of less than or equal to five (5) years. A matrix was developed by selecting the solar PV capacities (kW) and average monthly consumption (kWh) for C&I consumers. The simple payback was calculated for each combination of PV capacity and average monthly consumption. Subsequently, the analysis also included evaluation of payback period when network charges are not applied for the gross generation of solar energy for each of the combinations.

For a LT-Industrial consumer, combinations that self-consumed 80% of gross solar energy generated to satisfy the consumption resulted in a ‘financially attractive’ payback. In the case of LT-Commercial consumer this self-consumption percentage was found to be 50%. Additionally, removal of network charges resulted in a faster payback period for both LT Commercial and Industrial users.

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