Tangedco, Tamil Nadu’s power utility, often argues that its financial performance is compromised if it loses its high-tariff-paying consumers such as the commercial and industrial entities on account of rooftop solar. And it has expended substantial effort to curb the uptake of rooftop solar by consumers in the State.
In sync with the Indian Electricity Act, 2003, in the near future there will be no high-tariff and low-tariff consumers but at most two tariffs by voltage level (HT and LT), with direct government subsidies for eligible consumers.
If Tangedco’s average cost of supply per unit in 2021 is approximately ₹8.20/kWh, then all consumer tariffs are below this average cost of supply, resulting in a net loss to Tangedco for every unit supplied to the consumer.
Therefore, for every unit of electricity that consumers generate and self-consume from a solar energy system, one unit less of loss-making energy is to be delivered by Tangedco to the consumer.
If Tangedco keeps resisting distributed renewable energy generation by creating grid connection barriers, consumers will invest in energy storage and start using grid power as a backup.