Solar Business in Tamil Nadu

Solar Business In Tamil Nadu

Tamil Nadu is the fourth-largest & the sunniest state of India, so there are lots of good opportunities for solar developers and solar business in Tamil Nadu. But before understanding these opportunities, you have to understand the energy consumption of Tamil Nadu and the reasons for its rapid growth. Let us analyze the power consumption data of Tamil Nadu:

  • Tamil Nadu is India’s ten-largest state by area, but in terms of population, it comes sixth. According to the report, India’s Population in 2022 is estimated to be 13,75,586,000 (1.38 Billion or 138 Crore)

As we know, power consumption is also dependent on the population, because every single human being has its power requirement.

• The three major ports of Tamil Nadu are Chennai, Thootukudi, Ennore. And the total number of airports is seven including 4 international airports.

• According to the 73rd round of the National Sample Survey, the state has 49.48 lakh MSMEs (about 8% of the total number of MSMEs in the country) that employ 96.73 lakh people. Along with this, more than 17,48,000 companies, in Tamil Nadu.

• Agriculture is the most important sector in the economy of Tamil Nadu. Around 70% of the state’s population is engaged in agricultural pursuits. State agriculture contributes to 55% of the economic activity in the state, followed by manufacturing at 34% and agriculture at 11%.

• Tamil Nadu is India’s largest tourism business, accounting for 21.31 percent of domestic and 21.86 percent of foreign tourist visits, respectively. Domestic arrivals in Tamil Nadu totaled 494.8 million, while international arrivals totaled 6.86 million, according to the Ministry of Tourism’s 2020 report.

Power Generation Stats

To understand the potential for the solar business in Tamil Nadu, you must know about the total state’s commercial & residential structure along with the energy consumption (including generation).

As per stats,

  • Tamil Nadu’s total energy consumption is 23,149 Million Units on average. (2021)
  • Tamil Nadu’s total energy generation is 14,500 MW to 15,500 MW every year (2021) on average.

Power Goals of Tamil Nadu for 2022-23

  • Tamil Nadu Generation and Distribution Corporation (Tangedco) is planning to set up a 20,000 MW of solar power project with adequate battery storage in the next ten years.
  • 25.3 MW captive floating solar power plant of Southern Petrochemical Industries Corpn. (SPIC) at Thoothukudi in the state of Tamil Nadu.
  • Tamil Nadu is setting up its solar targets for 2022-23
Year Solar PV – Utility Category Cumulative Target (MW) Solar PV – Consumer Category Cumulative Target (MW) Cumulative Solar Energy Target (MW)
Baseline up to 2020 3,759.89 156 3,915.89
2020-21 4,306.59 1,304.00 5,610.59
2021-22 4,853.30 2,452.00 7,305.30
2022-23 5,400.00 3,600.00 9,000.00

The expected solar energy generation, after achieving the total Consumer Category and Utility Category targets, meets 12.92% of the total projected electrical energy consumption of 2023 of the State.

Power Distribution of Tamil Nadu for 2022-23

The Consumer Category solar energy targets to be achieved by March 2023 for each consumer segment have been listed below. These targets are based on the projection of electric energy consumption of the various electric energy consumer categories up to the year 2023. 3

A 156 MW capacity of Consumer Category solar has been achieved as of March 2020, total capacity addition of 3,444 MW needs to be

installed by March 2023 to meet the Consumer Category solar capacity target.

Consumer Segments Consumer Category Solar Target March 2023 (MW) Expected Solar Energy Generation (MU) FY 2022-23 %  of Solar Energy on Consumption (MU) FY 2022-23
Industries 1,168 1,944 1.68%
Agriculture 380 633 0.55%
Commercial 575 957 0.83%
Government Institutions 68 113 0.10%
Municipality 130 216 0.19%
Private Institutions 26 43 0.04%
Railway Traction 37 61 0.05%
Domestic 1,061 1,766 1.52%
Total 3,444 5,732 4.94%


Uttar Pradesh New and Renewable Energy Department Agency (UPNEDA)

Intending to create a carbon-free environment, the Government of Tamil Nadu has developed the Solar Energy Policy, 2022-23. In this solar energy action plan, Tamil Nadu government will encourage more people to adopt solar energy and meet the solar energy targets of 2022-23. This will contribute to enhancing the quality and reliability of the state’s electricity supply and help prepare the state for a distributed and mutually sustainable energy future. The following are some of the key features of the draught policy for 2022:

Policy to Promote Rooftop Solar

The Cabinet Committee on Economic Affairs (CCEA) has authorized Phase 2 of the Grid Connected Roof Top Solar programmed, with a total Central Financial Support of Rs.11,814 crore, to achieve a cumulative capacity of 40 GW from Roof Top Solar (RTS) installations by 2022. The Electricity Distribution Companies are intended to execute this strategy (DISCOMs).

Component A: Central Financial Assistance to the residential sector – 4GW

  • > 3 kWp and up to 10 kWp – CFA at 20%
  • up to 500 kWp – CFA at 20% for Group Housing Societies (GHS)/Residential Welfare Associations (RWA)

Component B: Incentives to DISCOMs

  • No incentives for capacity up to 10%
  • 5% for beyond 10% and up to 15%
  • 10% beyond 15%

Policy to Promote Industrial Solar

  • 40% Accelerated Depreciation
  • 10 year Tax holiday on solar projects
  • Loans available for up to Rs.15 Crore for renewable energy projects under Priority sector lending

Opportunity for Solar Developers in Tamil Nadu

When it comes to solar energy production in South India, Tamil Nadu is the fourth-largest & the sunniest state of the country, which is considered potentially rich for electricity generation.

According to the state government of Tamil Nadu has set a goal of producing 9,000 MW of solar electricity by 2022-23.

The key commercials of Tamil Nadu are textiles, heavy commercial vehicles, automobile and auto components, engineering, IT and IT’S, cement, banking and financial services, drugs and pharmaceuticals, agro and food processing, leather tanning industries, electronic hardware and tourism. It means this state has lots of potential for solar developers. Let’s analyze the state from the point of view of solar developers. The complete state is divided into three segments:

For Residential & Agricultural

The energy consumption of this segment is less in comparison to the other two segments. Up to 30kW solar solution is enough for Residential & Agricultural.

• The population of Tamil Nadu is expected to reach 77 million (7.7 crores) in 2020, and 78.8 million in 2021. (7.88 Crores).

• The total no of farmers is more than 0.794 crore (According to the Agriculture Census 2015-16).

For Small & Micro Businesses

The energy consumption of this segment is more than Residential & Agricultural & lies up to 2000kW, so 200Kw solar solution is enough for it.

  • Tamil Nadu has 32 cities, 1097 towns and 15979 villages (as per Census-2011).
  • A total of 6.89 lakhs units (MSMEs) are registered in the state.

For Big Industries

The energy consumption of these industries is very big, so these industries need 200 kW & more capacity of the solar solutions.

• In Tamil Nadu, there are more than 4,000 IT companies.

Now you can discover which category you fit into and pick where you want to start your solar business.

Brand Installation Location Category Solar Plant Capacity City
SolarEdge Tata Consultancy Services IT Company 60 kW Chennai
SolarEdge Kalasalingam Academy of Research and Education Academy 503.68 kW Krishnankoil
SolarEdge Shanthi Gears Limited Gears Manufacturer 99.4kW Coimbatore
SolarEdge Doveton Group of Schools School 34kW Chennai
How Can We Help?

Hope this information about Does Solar Business In Tamil Nadu Have Good Potential? helps you.

If you are planning to start a solar business or install a solar solution, you can connect with Ornate Solar to get the best assistance with the best prices for solar panels and inverters. We are the official partner of Canadian Solar panels & Renewsys solar panels in India. We are also the official distributor of SolarEdge inverters with DC optimizers, Enphase microinverters, Fronius On-Grid Inverters, and Havells solar inverters in India.

For more information, please give us a call at 011 4353 6666.

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About The Author

Kamini Gupta is the Content Developer at Ornate Solar. She is a solar enthusiast and has worked with several well-known solar brands and experts in India. She is also a poet and a storyteller and has performed in many open mics events.

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kamini ornate

About The Author

Kamini Gupta is the Content Developer at Ornate Solar. She is a solar enthusiast and has worked with several well-known solar brands and experts in India. She is also a poet and a storyteller and has performed in many open mics events.