Several MSME (Micro, Small, and Medium Enterprises) associations have urged the state government to reconsider the network or wheeling charges imposed on rooftop solar systems, especially for consumers who do not transfer surplus energy to the power grid. The associations, having recently received their first electricity bill after the charges were revised, have expressed concern over the significant costs involved.
They argue that network charges should be applicable only to the energy exported to the grid, and not to the energy generated and consumed on-site. Pradeep Natarajan, President of the Tamil Nadu Electricity Consumer Association, voiced concerns about the current policy. He explained, “The prevailing system of levying charges on all energy generated, irrespective of whether it is consumed on-site or exported to the grid, is a deterrent to the widespread adoption of rooftop solar installations.”
He further elaborated that installing a 1 MW rooftop solar system requires a substantial investment of up to Rs 4.5 crore for industries. While they accept that the Tamil Nadu Electricity Board (TNEB) has imposed network or wheeling charges to manage the electricity generated from solar energy, they believe that these charges are unfair when applied to rooftop solar systems.
In contrast to ground-mounted solar plants, which often feed surplus energy into the grid, industries that rely on rooftop solar systems typically use the generated energy immediately, without exporting it. Despite this, TNEB charges Rs 1.05 per unit for high-tension (HT) lines as network charges on all energy generated, regardless of whether it is fed into the grid.
J James, President of the Tamil Nadu Association of Cottage and Enterprises (TACT), highlighted that after prolonged protests and demands, TNEB had reduced the network charge for MSMEs by 50% in December 2023, lowering it from Rs 1.53 to Rs 0.76 per unit (kWh). However, he noted with concern that from July 2024, the network charge has been raised to Rs 1.59 per unit, which has caused further financial strain on MSMEs.
Similarly, S Surulivel, President of the Coimbatore SIDCO Industrial Estate Manufacturers Welfare Association (COSIEMA), pointed out that MSMEs are already struggling to cope with increasing electricity costs. For those looking to switch to renewable energy through rooftop solar systems, the high wheeling charges act as a significant deterrent.
“We understand that wheeling charges are justified when industries export excess solar energy during non-operational days, such as Sundays, or when there is a surplus that is fed into the TNEB grid. However, we firmly believe that the charges should not apply to the energy produced and used immediately by industries from rooftop solar installations,” Surulivel said.
M Raja, President of the Tamil Nadu Solar Power Generators Association, added that another challenge for industries adopting solar power is the current restriction on carrying forward unused energy to the next billing cycle. As per the present guidelines, industries must utilize all the solar energy generated within the same month, as there is no provision for carrying forward surplus energy.
As a result, industries that generate more energy than they can consume within a month are facing up to a 20% loss in the total energy generated. Raja emphasized that this policy needs to be revised to allow for more efficient use of solar power. In response, a senior TNEB official clarified that the charges being collected are based on the tariff structure established by the Tamil Nadu Electricity Regulatory Commission (TNERC).
He advised that if the MSMEs or other consumers have concerns, they should address their grievances with the TNERC. The official further explained that because consumers with solar installations still rely on the TNEB grid for supplementary electricity, it would not be feasible to completely abolish the network charges, even for those who primarily use the energy generated from their rooftop solar systems without exporting it to the grid.
The current policy of charging for all energy generated, regardless of its usage or export to the grid, creates a disincentive for industries to invest in rooftop solar installations, undermining efforts to promote renewable energy adoption. For instance, TNEB’s collection of Rs 1.05 per unit in network charges for HT lines on all energy produced, without distinguishing between self-consumption and grid export, remains a key issue. Although the network charge for MSMEs was previously reduced from Rs 1.53 to Rs 0.76 per unit in December 2023, the recent hike to Rs 1.59 per unit in July 2024 has reignited concerns among industries.
