Electricity costs are a major concern for manufacturing industries in Tamil Nadu. To manage rising tariffs, many companies are exploring solar energy procurement models such as Solar Power Purchase Agreements (PPAs).
A solar PPA allows factories to purchase electricity generated by a solar plant at a predetermined tariff without investing capital in solar infrastructure.
What is a Solar PPA?
A solar power purchase agreement is a long-term contract between a factory and a solar developer.
Under this model:
- the developer installs and operates the solar plant
- the factory purchases electricity at a fixed tariff
- the agreement usually lasts 15–25 years
Typical Solar Tariff Range
Solar PPA tariffs vary depending on project size and location. However, solar electricity is often significantly cheaper than conventional grid electricity.
Because grid tariffs can exceed ₹9–₹12 per unit in certain categories, solar power often provides cost savings for large consumers. (NoBroker)
Benefits for Industrial Consumers
Cost Savings
Factories can reduce electricity expenses by purchasing solar power at lower tariffs.
Long-Term Price Stability
Solar tariffs are usually fixed for the contract duration, protecting businesses from tariff hikes.
No Capital Investment
Solar developers finance the installation and maintenance of the system.
Industries Adopting Solar PPA in Tamil Nadu
Industries with high electricity consumption are the most likely to adopt solar PPAs.
These include:
- textile mills
- engineering industries
- automotive manufacturing
- food processing factories
- cold storage warehouses