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

The state commission also reduced ToD charges from 25% to 15% for low-tension industries

December 12, 2023


The Tamil Nadu Electricity Regulatory Commission (TNERC) has reduced the rooftop solar network charges for all Micro, Small, and Medium Enterprises (MSME) in the state by 50% from ₹1.53 (~$0.018)/kWh to ₹0.765 (~$$0.009)/kWh.

First introduced in November 2021, the state had imposed a network or wheeling charge of 20% for domestic consumers of up to 10 KW load and 75% for consumers with a load of more than 10 kW.

The Commission also issued an order addressing Time of Day (ToD) charges. This directive, originating from the MSME Department, mandates reducing ToD charges from 25% to 15% for LT industries (III-B) during peak hours.

The government exempted LT-IIIB industries from paying peak hour charges until the installation of smart meters.

The state regulatory body further allowed the reduction of power tariff for low-tension multi-tenement consumers to ₹5.5 (~$0.066)/kWh from ₹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 reduced tariff is effective from November 1, 2023, to March 31, 2024.

Subsequently, Tamil Nadu Generation and Distribution Corporation (TANGEDCO), recognizing the potential revenue shortfall due to these changes, requested a subsidy of ₹1.96 billion (~$23.5 million), which was granted by the government.

The Energy Department outlined compensation for LT-IIIB industries and MSMEs at ₹1.91 ($0.023)/kWh and ₹0.765 ($0.009)/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.

The Commission approved the provisional subsidy, emphasizing the need for reconciliation based on actual consumption and revenue assessments. TANGEDCO must submit quarterly reports for this reconciliation within 60 days.

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.

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