Purchase obligation, sops form basis of TN solar policy 

M Ramesh Chennai | Updated on November 12, 2019

A 6 per cent ‘solar purchase obligation’ and a tapering generation-based incentive (GBI) are the cornerstones of Tamil Nadu government’s solar policy, unveiled today.


In pushing investors towards the target of 3,000 MW in three years, the government makes it mandatory for large power consumers to buy six per cent of their consumption from solar energy producers or from the state generation and distribution utility at higher prices, or by buying solar renewable energy certificates.


It is mandatory for high tension power consumers like special economic zones (SEZ), industries, IT parks, telecom towers, colleges and residential schools and buildings with built up area of 20,000 square metre or more to purchase six per cent solar power from Jan 2014.

It also provides a generation-based incentive (GBI) of Rs 2 unit for the first two years, Re 1 for the next two years and 50 paise for the subsequent two years. This GBI will be available for all solar or solar-wind hybrid rooftop systems installed before March 2014.


Installation of solar water heating systems will be mandatory for industries having hot water boiler/steam boiler using fossil fuel.


Power consumers falling under domestic, agricultural, power looms, low tension industries, cottage and small-scale industries categories are exempted from solar power purchase obligation.


Solar power projects would be developed through competitive bidding. Investments though joint ventures by state undertakings will also encouraged through competitive bidding.


Appropriate incentives will be provided to attract investors to this sector so as to make the state a regional hub for the solar power industry.


The Tamil Nadu Energy Development Agency will act as the single window clearance agency for solar power projects in the State.


Published on October 20, 2012

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