Project aims to incentivise farmers as well as reduce the State’s subsidy burden
Tamil Nadu Energy Development Agency (TEDA), the nodal agency for renewable energy in the State, has envisaged an ambitious plan to roll out one lakh grid-connected solar powered agriculture pumps at a project cost of ₹13,500 crore.
The project aims to incentivise farmers generating solar power and help them earn additional income by selling excess power to the grid. The other aim of the project is to reduce the subsidy burden for the State government.
According to a TEDA official, at present the Union Ministry for New and Renewable Energy is providing 30% capital subsidy for solar pumps. The farmer has to bring in 10-20% and the remaining has to be provided by the State government and Tamil Nadu Generation and Distribution Corporation (Tangedco). The cost of 5 horse power 5 kilowatt solar pump comes to ₹4.3 lakh. He pointed out that farmers are unable to put in the 10-20% capital cost and the State government has its limitation in providing subsidy.
At present, 6 lakh solar pumps are under wait list and the State government is only able to energise a small portion of it. According to policy note of the State Energy department, between 2013-14 and 31.03.2018, a total of 2,295 of 5 HP AC solar pumps were energised at a subsidy of about ₹80.76 crore.
As an alternative, TEDA is coming up with a proposal to energise one lakh grid-connected pumps that can generate 2000 MW of solar power.
The agency would take care of the farmer’s part of 10-20% capital by arranging co-financing option. It has already floated a tender for the project and the vendor would take care of the financing requirement. The vendor would recover his investments through sale of power generated from the project.
According to a calculation, by installing a 7.5 horse power 20 kilowatt grid connected solar system, a farmer can earn an incentive of ₹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%. Tamil Nadu provides agriculture power subsidy of over ₹3,000 crore each year.
The energy generated under this scheme is proposed to be sold to Tangedco at a tariff determined by the Tamil Nadu Electricity Regulatory Commission (TNERC). TEDA will aggregate power from all such systems and enter into a power purchase agreement with the state utility for the aggregated quantity.
The move follows an announcement by Electricity Minister P. Thangamani in the Assembly that TEDA will encourage and facilitate generation of solar power by farmers in their own land for self-consumption and commercial sale to Tangedco and other buyers.
The successful implementation of the project will depend on efficient coordination between TEDA and Tangedco.