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Why Solar Power in Tamil Nadu has an advantage over Wind Power

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Tamil Nadu Solar Advantage over Wind?

We had earlier highlighted in Greenworldinvestor that solar investors should take notice of Solar Energy in Tamil Nadu which has come out with a very ambitious solar energy policy. The clear rules and the mandatory provision for buying solar power has made it into a solar hotspot. Already many industrial companies in the state are looking to set up solar power plants. This is not only due to the mandatory provision of buying up to 6% of the power requirements from solar by 2016, but also to alleviate the power blackouts being faced. The state proposes to install almost 3000 MW of solar power in the next 3 years which contrasts with the 300 MW of solar energy installed in entire India in 2011. Indian Solar Panel manufacturers might not benefit as there is no local content provision however Solar EPC companies will benefit hugely. Already some top wind companies like Gamesa are thinking of exploiting this opportunity given their expertise in wind farm construction.

Wind Industry Problems in Tamil Nadu

The Indian Wind Industry in 2012 is finding the going a bit difficult after a record breaking year in 2011. First the accelerated depreciation subsidy which has been around for a long time making India the 5th largest wind energy producer, has been removed. Second the GBI incentive scheme too was removed so that the Wind Energy industry depends on the Renewable Energy Certificates (REC) scheme which is quite fickle and market based. Now the Wind Energy Industry finds itself facing a new set of problems in its bastion of Tamil Nadu which accounts of almost 1/3rd of the total wind energy capacity in the country.

First Tangedco, the distribution utility is threatening to remove the “banking facility” of the wind energy producers which allowed them to sell power at a time when the electricity prices were high. The wind turbine producers like Suzlon, Gamesa and others were also accused by the wind farm owners of colluding to set higher prices. Now the local bodies such  as the collectorates have decided to impose local taxes and fees on wind turbines which are installed. The wind energy companies are protesting such a move as it would increase the capital costs (by around 1-2%, which is not that much) questioning the legality of such a move. The biggest fear for the wind industry is that, this tax which has started in one district could easily be copied by other local administrations around the country.

Solar Power faces no such issues in TN

Wind Power in Tamil Nadu is facing issues of connecting to the grid which has resulted in a sharp slowdown in wind investments in the state. There are concerns that ground mounted solar farms may suffer the same fate as 50% of the solar power capacity is expected to come from solar farms. However unlike wind energy, a large amount of solar energy is going to be distributed which will make it easier to be connected to the grid. Also unlike wind power, solar resources are spread across the state which will not lead to concentrated generation of intermittent renewable energy.


Solar power plants, to be promoted under the Tamil Nadu Government’s policy on solar energy, may not face the problem of evacuation some windmills face.Solar power is more dispersed than wind power and the Tamil Nadu Generation and Distribution Corporation (Tangedco) and Transmission Corporation (Transco) have about 1,350 substations across the State, say power managers. This assumes relevance as 1,500 megawatt (MW) of the targeted 3,000 MW for the next three years is to be generated through utility scale projects. Tangedco is gearing itself to make evacuation arrangements for power plants of one MW and above in the segment of utility scale projects.

Solar Gold Rush in TN before policy Announcement

The Indian state of  Tamil Nadu, which is set to announce a solar subsidy policy soon, is seeing a massive gold rush. Note in India, the information about Government policy is generally leaked to big industrialists and insiders much before the actual government regulations are released. This gives a huge advantage to the big industrial houses who can prepare themselves accordingly. Huge chunks of land in the dust bowls of  Tamil Nadu districts are being bought for less than $6000/acre. The reason is that developers and opportunists are building up land banks to set up huge solar farms.


Sneha Shah

I am Sneha, the Editor-in-chief for the Blog. We would be glad to receive suggestions, inputs & comments on GWI from you guys to keep it going! You can contact me for consultancy/trade inquires by writing an email to

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