Tamil Nadu Cuts Rooftop Solar Network Charges by 50% for MSMEs

13th December 2023: The rooftop solar network rates for all Micro, Small, and Medium Enterprises (MSME) in the state have been lowered by 50% by the Tamil Nadu Electricity Regulatory Commission (TNERC), from ₹1.53 (~$0.018)/kWh to ₹0.765 (~$$0.009)/kWh.

In addition, the Commission issued an order regarding Time of Day (ToD) fees. This MSME Department regulation requires that during peak hours, ToD rates for LT industries (III-B) be reduced from 25% to 15%.The government exempted LT-IIIB industries from paying peak hour charges until the installation of smart meters.

Additionally, the state regulatory authority approved the ₹5.5 (~$0.066)/kWh power rate reduction for low-tension multi-tenement customers, which had previously been at ₹8.15 (~$0.098)/kWh.

The tariff applies to tenements without lift facilities, specifically those with ten or fewer residents and three floors or less for common lighting and water supply.

The lowered tariff will go into effect on November 1, 2023, and run until March 31, 2024.

Later, after realizing that these adjustments would result in a revenue shortfall, Tamil Nadu Generation and Distribution Corporation (TANGEDCO) applied for and was awarded a ₹1.96 billion (~$23.5 million) government subsidy. The pay rates for MSMEs and LT-IIIB enterprises were set by the Energy Department at ₹0.765 ($0.009)/kWh and ₹1.91 ($0.023)/kWh, respectively. With the Commission acknowledging the government’s directive, TANGEDCO sought to issue a provisional tariff subsidy order to offset the anticipated revenue shortfall.

TANGEDCO outlined a detailed claim for a provisional tariff subsidy of ₹920.3 million (~$11.03 million), categorizing it for the tariff rate reduction for multi-tenements consumers, non-collection of peak hour charges for LT III-B industries, and the reduction of rooftop solar network charges for MSMEs.

With a focus on the necessity for reconciliation based on evaluations of actual consumption and revenue, the Commission approved the temporary subsidy. Within sixty days, TANGEDCO is required to submit quarterly reports for this reconciliation.

Earlier this year, the Commission increased the retail electricity tariff for high-tension industrial consumers by 2.2% to ₹6.90 (~$0.084)/kWh from the earlier ₹6.75 (~$0.082)/kWh. Similarly, the retail tariff for commercial consumers was increased by 2.4% to ₹8.70 (~$0.11)/kWh from ₹8.50 (~$0.10)/kWh.