Reduced costs for solar power generation set to make state-owned power distribution firms redundant

Can there be a day when a new home owner will not have to wait for months to get a power connection and be forced to grease the palms of TANGEDCO officials to light up their homes?

It might not be happening over the next few months but that will happen in the near future, say solar power and equipment generating firms in the state.  

Although patronage for domestic solar power producing units have been only lukewarm in the state, the drastic reduction in price of solar power production bringing it just a few rupees higher than with thermal power per unit (both in domestic and commercial levels) brings the idea of domestic power consumers doing away with electricity bills a reality soon.

While TANGEDCO (the generation and distribution wing of TNEB) had purchased solar power from private power producers at a rate of Rs.16/unit just a few years ago, the cost has drastically come down to around Rs.6.50/unit, thanks to the state’s solar power policy and various initiatives from the union ministry of renewable energy. 

In comparison, TNEB officials claim that the generation cost of thermal power is somewhere around Rs. 3.00 to Rs. 3.50/unit which is just three rupees less per unit of electricity. Industry sources contend the price fixed on thermal power production and claim that it is not possible to arrive at an exact figure due to overhead costs and that the actual price of fossil-fuel based power could be much higher.

As per latest tariff rates, average domestic consumers of power presently pay Rs. 6/unit of electricity while commercial consumers pay a few rupees more.

“Solar power generation costs have come down to be almost on par with fossil fuel generation but it might not be possible for the board to get away with purchasing thermal (read unclean) power,” says a senior Tamil Nadu Energy Development Agency (TEDA) official."We still need fossil fuel based power for commercial and industrial applications which solar generation cannot presently match," he says.

The real revolution is happening in the domestic consumer segment which forms a bulk of TNEB’s consumer base. At present, the cost of setting up a domestic rooftop unit generating five units of power a day costs around Rs. 1.20 lakhs without any subsidy from the government and can be reduced by atleast Rs. 50,000/- with the state and central subsidy.

“When you break down the numbers, the cost of generating one unit of solar power generated in such a roof top unit comes to around Rs. 8/- or Rs. 9/unit. In commercial establishments such has hospitals and educational institutions which apply for a commercial connection, the cost is almost on par and is economically viable,” says Vidysagar, director of Evren Energy which is involved in domestic as well as largescale solar power production.

He adds that when the concept of net metering, which is to compensate consumers for excess power that they generate and return back to the grid comes in place, the patronage for rooftop solar units would increase.

Industry experts point out that such a situation is already present in certain states of United States such as Arizona where more and more rooftop solar power producers supply power to the grid instead of drawing from it and their power bills are negative.

The dip in production cost of solar power units is attributed to the economic slump in the West as a result of which solar panels produced in huge numbers in China and Taiwan did not reach the intended markets.

“In a few years from now, any new home owner will just spend one lakh rupees more and generate the power he needs instead of waiting for a power connection for months. Just as land line telephones are almost obsolete and one can get connection in a day, power supply will also be just a dial away,” says Vidyasagar. 

To appy for a subsidy for a rooftop solar connection, visit the following link: http://www.teda.in/site/index/id/7740044757