Open Access Solar in Tamil Nadu: Rules, Charges, and Benefits

Open access solar allows large electricity consumers to source power from a solar plant located anywhere in Tamil Nadu (or even outside the state), transmitting the energy through the TANGEDCO/TANTRANSCO grid infrastructure. Instead of installing panels on your own rooftop, you can purchase solar power from a dedicated off-site plant and have it delivered to your premises through the existing grid -- paying wheeling, transmission, and regulatory charges along the way.

For factories, commercial complexes, IT parks, and institutional consumers whose electricity demand exceeds what rooftop solar can provide, open access is the pathway to achieving 50-100% renewable energy coverage. In Tamil Nadu, the open access framework is governed by the Tamil Nadu Electricity Regulatory Commission (TNERC), with specific rules on eligibility, charges, and banking that differ significantly from other states.

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Who Is Eligible for Open Access Solar in Tamil Nadu?

Minimum Consumption Threshold

TNERC has progressively lowered the open access eligibility threshold:

Period	Minimum Connected Load / Contract Demand
Before 2022	1 MW and above
2022-2024	500 kW and above
2024-2026 (current)	100 kW and above (for renewable energy)

For renewable energy sources (including solar), the current threshold is 100 kW of contract demand. This opens the door for medium-sized factories, commercial establishments, and institutions that were previously excluded.

Consumer Categories Eligible

• HT Industrial consumers (HT-1 tariff) -- factories, manufacturing plants
• HT Commercial consumers (HT-2 tariff) -- malls, IT parks, hotels, hospitals
• Government and institutional consumers
• Captive consumers (where the consumer has equity in the generating plant)
• Group captive consumers (multiple consumers sharing a solar plant)

Important Restrictions

• The consumer must be an HT (High Tension) consumer or have a contract demand of 100 kW or above
• LT (Low Tension) consumers below 100 kW are not eligible for open access; they should consider rooftop solar with net metering instead
• The consumer must apply for open access through TANGEDCO's designated nodal officer

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Types of Open Access Solar Arrangements

1. Captive Power Plant (CPP)

You (or your company) own at least 26% equity in the solar plant and consume at least 51% of its generation. This qualifies as a captive power plant under the Electricity Act 2003.

Benefits:

• Exemption from cross-subsidy surcharge (CSS)
• Exemption from additional surcharge
• Only wheeling charges and transmission losses apply

Best for: Large industrial groups that can invest in a dedicated solar plant

2. Group Captive

Multiple consumers collectively own 26% equity in a solar plant and collectively consume 51% of its generation. Each consumer's share is proportional to their equity holding.

Benefits:

• Same CSS exemption as individual captive
• Allows smaller consumers to participate in larger, more efficient solar plants
• Shared investment reduces individual capital requirement

Best for: Industrial clusters, SIDCO/SIPCOT estate associations, or business groups with multiple facilities

3. Third-Party Sale (Power Purchase Agreement)

A solar developer builds and owns the plant, selling power to you through a long-term PPA (typically 15-25 years) at a negotiated tariff.

Benefits:

• Zero upfront capital investment from the consumer
• Fixed or mildly escalating tariff provides cost certainty
• Developer handles plant O&M

Charges applicable:

• Full cross-subsidy surcharge
• Additional surcharge (if applicable)
• Wheeling and transmission charges
• Transmission losses

Best for: Consumers who want solar without capital investment; companies focused on OpEx models

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Charges Applicable for Open Access Solar in Tamil Nadu

Understanding the full cost structure is critical to evaluating whether open access solar makes financial sense versus grid power.

Current Charge Structure (2025-26)

Charge Component	Rate (Approximate)	Applicability
Wheeling Charge (intra-state)	Rs 0.35-0.55 per unit	All open access consumers
Transmission Charge	Rs 0.40-0.60 per unit	All consumers using TANTRANSCO network
Cross-Subsidy Surcharge (CSS)	Rs 1.00-1.50 per unit	Third-party sale only (exempt for captive)
Additional Surcharge	Rs 0.25-0.50 per unit	Third-party sale (where notified)
Scheduling and System Operation Charge	Rs 0.05-0.10 per unit	All open access
Transmission Losses (in kind)	3-5% of energy injected	Deducted from generation
Wheeling Losses (in kind)	5-7% of energy injected	Deducted from generation

Total Cost Calculation Example

Captive/Group Captive arrangement:

• Solar generation cost: Rs 2.50-3.50/unit
• Wheeling charge: Rs 0.45/unit
• Transmission charge: Rs 0.50/unit
• Losses (10% of generation): Effectively adds Rs 0.30-0.35/unit
• Delivered cost: Rs 3.75-4.80/unit

Third-party PPA arrangement:

• PPA tariff: Rs 3.00-4.00/unit
• Wheeling + transmission: Rs 0.95/unit
• CSS: Rs 1.25/unit
• Additional surcharge: Rs 0.35/unit
• Losses: Rs 0.35/unit
• Delivered cost: Rs 5.90-6.90/unit

Compare these against the HT industrial grid tariff of Rs 6.50-8.00/unit to assess savings.

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TNERC Regulations: Key Provisions

Banking

Tamil Nadu allows banking of solar energy for open access captive consumers. This means if your solar plant generates more energy than you consume during daytime, the surplus is "banked" with TANGEDCO and can be drawn back during nighttime or cloudy periods.

Key banking rules:

• Banking period: April to March (financial year)
• Banking charge: 2% of banked energy (in kind)
• Unutilised banked energy at year-end: Paid by TANGEDCO at a rate determined by TNERC (currently Rs 2.00-2.50/unit -- significantly below generation cost)
• Banking is a significant advantage in Tamil Nadu and is not available in many other states

Renewable Purchase Obligation (RPO) Credit

Solar open access generation counts toward the consumer's Renewable Purchase Obligation. For industrial consumers who are mandated to source a percentage of their electricity from renewables, open access solar simultaneously reduces electricity costs and fulfils regulatory requirements.

Connectivity and Approval Process

1. Application to TANGEDCO for open access connectivity (at least 30 days before intended commencement)
2. Technical feasibility study by TANGEDCO/TANTRANSCO
3. Execution of agreements -- connectivity agreement, wheeling agreement, banking agreement
4. Metering arrangements -- ABT meters at injection and drawl points
5. Commissioning and commencement of open access supply

The process typically takes 3-6 months from application to commissioning.

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Open Access vs Rooftop Solar: Which Should You Choose?

Parameter	Rooftop Solar	Open Access Solar
System size	Typically up to 100 kW	100 kW to 100 MW+
Location	On your own rooftop	Anywhere in Tamil Nadu
Grid charges	Nil (behind the meter)	Wheeling, transmission, CSS
Effective cost per unit	Rs 2.50-3.50	Rs 3.75-6.90
Capital requirement	Medium	High (captive) or nil (PPA)
Roof space needed	Yes	No
Net metering/billing	Available for up to 1 MW	Not applicable
Regulatory complexity	Low	High

The optimal strategy for many large consumers is a hybrid approach: Install rooftop solar to the maximum capacity your roof allows (cheapest per-unit cost, no grid charges), and source additional requirements through open access.

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Is Open Access Solar Financially Viable in Tamil Nadu in 2026?

For captive/group captive arrangements, the answer is clearly yes. With delivered costs of Rs 3.75-4.80/unit versus grid tariffs of Rs 6.50-8.00/unit, the savings are Rs 2-3 per unit. For a factory consuming 50,000 units/month, that translates to Rs 1.0-1.5 lakh in monthly savings.

For third-party PPA arrangements, the economics are tighter due to CSS and additional surcharge. The delivered cost of Rs 5.90-6.90/unit provides meaningful savings only for HT consumers paying Rs 7+ per unit. However, as CSS rates are reviewed downward (as TNERC has been doing progressively), the PPA model becomes increasingly attractive.

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Getting Started with Open Access Solar

Open access solar involves complex regulatory compliance, grid connectivity arrangements, and contractual structures. Having an experienced partner who understands TNERC regulations, TANGEDCO procedures, and the commercial structuring of captive/group captive/PPA arrangements is essential.

Use our solar savings calculator to get an initial assessment of your open access potential, or contact Tristar for a detailed open access feasibility study for your industrial or commercial facility. We assist with project structuring, developer selection, TANGEDCO liaison, and ongoing compliance management.