TEDA Plans to Install 1 Lakh Solar Pumps in Tamil Nadu

The Tamil Nadu Energy Development Agency (TEDA) has put forth a plan to roll out one lakh grid-connected solar powered agriculture pumps at a projected cost of INR 13,500 crore. The agency aims to incentivize farmers who’ll be generating additional solar power and help them make additional income by selling the excess power to the grid. Consequently, the agency’s other aim from the project is to reduce the power subsidy burden for the state government.

At present, the break-up of a 5 horse power 5 kW solar pump which retails for around INR 4 lakhs, is that the farmer has to bring in 10-20% of the capital, and the Ministry of New and Renewable Energy provides for 30% capital subsidy, and the remaining has to be provided by the State government and Tamil Nadu Generation and Distribution Corporation (Tangedco). Providing for even 10-20% of the entire capital is a currently a big burden on the farmers and due to this, currently, 6 lakh solar pumps are under wait list and the State government is only able to energise a small portion of it. In the last 5 years 2,295 of 5 HP AC solar pumps have been energised at a subsidy cost of about INR 80.76 crore for the state government.

To work around this issue the nodal agency came up with the proposal to energise one lakh grid-connected pumps with an expected generation capacity close to 2 GW. The state has floated a tender for the project and the vendor will be responsible to take care of the financing requirement, recouped through sale of power generated from the project. TEDA will take care of the farmer’s part of 10-20% capital by arranging co-financing option. The agency will aggregate power from all the systems and enter into a power purchase agreement with the state utility for the aggregated quantity; the energy generated under the scheme is proposed to be sold to Tangedco at a predetermined tariff.

By installing a 7.5 horse power 20 kilowatt grid connected solar system, a farmer can earn an incentive of INR 11,000 by producing energy and selling the excess amount to the grid. The State government and Tangedco can bring down its agriculture subsidy burden by 50%.

This move, if executed, will be a very good one to watch, as solar pumps remain one of the fastest ways for India to hit its solar generation targets as well as cut down on crippling power subsidies. In fact, one wonders at times just why this hasn’t been given higher attention.

Recently, TEDA tendered for 50 MW Solar Rooftop Project in Tamil Nadu. The last date of bid submission is 24^th September 2018.