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For consumers exploring open access solar in Tamil Nadu -- purchasing solar power from an off-site generator and having it delivered through the TANGEDCO/TANTRANSCO grid -- understanding wheeling charges, banking provisions, and transmission losses is essential. These charges determine the true delivered cost of open access solar and, ultimately, whether it saves you money compared to drawing power directly from TANGEDCO.
This guide provides the detailed 2026 charge structure, explains how each component works, and walks through real cost calculations so you can evaluate open access solar for your facility.
What Are Wheeling and Banking Charges?
Wheeling Charges
When solar power is generated at a remote location and consumed at your premises, it travels through TANGEDCO's distribution network (and possibly TANTRANSCO's transmission network). Wheeling charges compensate TANGEDCO for the use of their infrastructure to deliver this power.
Think of it as a delivery fee. You are buying electricity from a solar plant, but TANGEDCO's wires are carrying it to your meter. They charge for this service.
Transmission Charges
If the solar plant and your consumption point are in different TANGEDCO distribution circles, the power also travels through TANTRANSCO's high-voltage transmission network. Transmission charges cover this inter-circle transport.
Banking Charges
Solar generation peaks during midday but your consumption may be spread across all 24 hours. Banking allows you to inject surplus solar power into the grid during peak generation and draw it back during non-generation hours (evening, night). The grid essentially acts as a battery. Banking charges compensate TANGEDCO for this storage-like service.
2026 Charge Structure in Tamil Nadu
The following rates are based on the latest TNERC tariff orders applicable for the 2025-26 period. Rates are subject to revision in future tariff orders.
Wheeling Charges
| Voltage Level | Wheeling Charge (per unit) | Applicable To |
|---|---|---|
| HT (11 kV / 22 kV) | Rs 0.45-0.55 | Distribution within a single circle |
| EHT (33 kV / 66 kV) | Rs 0.35-0.45 | Distribution at extra-high tension |
| Embedded generation (same substation) | Rs 0.20-0.30 | Generator and consumer on same feeder |
Transmission Charges
| Component | Rate (per unit) | Notes |
|---|---|---|
| TANTRANSCO transmission | Rs 0.40-0.60 | Applicable when power crosses distribution circles |
| SLDC (State Load Despatch Centre) scheduling | Rs 0.05-0.10 | Applied to all open access transactions |
Banking Charges
| Component | Rate | Notes |
|---|---|---|
| Banking charge | 2% of banked energy (in kind) | Deducted from withdrawable banked units |
| Banking period | April to March (financial year) | Surplus resets annually |
| Unutilised banked energy compensation | Rs 2.00-2.50 per unit | Paid at year-end for any undrawn surplus |
Cross-Subsidy Surcharge (CSS)
| Consumer Category | CSS Rate (per unit) | Applicability |
|---|---|---|
| HT Industrial (HT-1) | Rs 1.00-1.30 | Third-party open access only |
| HT Commercial (HT-2) | Rs 1.20-1.50 | Third-party open access only |
| Captive/Group Captive | Exempt | As per Electricity Act 2003 |
Additional Surcharge
| Component | Rate (per unit) | Notes |
|---|---|---|
| Additional surcharge | Rs 0.25-0.50 | Applicable to third-party open access; represents stranded cost recovery |
Transmission and Wheeling Losses
In addition to per-unit charges, open access consumers bear energy losses -- the physical energy lost as heat during transmission through wires and transformers. These losses are deducted "in kind," meaning if you inject 1,000 units at the solar plant, fewer units arrive at your meter.
| Loss Component | Typical Percentage | Impact on 1,000 Units Injected |
|---|---|---|
| Transmission losses (TANTRANSCO) | 3-4% | 30-40 units lost |
| Distribution wheeling losses (TANGEDCO) | 5-7% | 50-70 units lost |
| Total losses | 8-11% | 80-110 units lost |
For every 1,000 units your solar plant generates, approximately 890-920 units are available for your consumption (before banking charges).
Complete Cost Calculation: Captive vs Third-Party
Scenario 1: Captive/Group Captive (26% equity in solar plant)
A factory in Coimbatore's SIDCO estate with 200 kW demand, drawing solar from a 1 MW solar plant in which it holds 26% equity:
| Component | Rate | Monthly Cost (40,000 units) |
|---|---|---|
| Solar generation cost | Rs 2.80/unit | Rs 1,12,000 |
| Wheeling charges (HT) | Rs 0.50/unit | Rs 20,000 |
| Transmission charges | Rs 0.50/unit | Rs 20,000 |
| SLDC scheduling | Rs 0.07/unit | Rs 2,800 |
| CSS | Exempt | Rs 0 |
| Additional surcharge | Exempt | Rs 0 |
| Losses (10%) | 4,000 units equivalent | Rs 11,200 |
| Total delivered cost | Rs 4.15/unit | Rs 1,66,000 |
Compare with TANGEDCO HT Industrial: Rs 7.00/unit x 40,000 = Rs 2,80,000
Monthly savings: Rs 1,14,000 | Annual savings: Rs 13,68,000
Scenario 2: Third-Party PPA (No equity in solar plant)
The same factory purchasing solar from a third-party developer under a 25-year PPA:
| Component | Rate | Monthly Cost (40,000 units) |
|---|---|---|
| PPA tariff | Rs 3.50/unit | Rs 1,40,000 |
| Wheeling charges | Rs 0.50/unit | Rs 20,000 |
| Transmission charges | Rs 0.50/unit | Rs 20,000 |
| SLDC scheduling | Rs 0.07/unit | Rs 2,800 |
| CSS | Rs 1.15/unit | Rs 46,000 |
| Additional surcharge | Rs 0.35/unit | Rs 14,000 |
| Losses (10%) | 4,000 units equivalent | Rs 14,000 |
| Total delivered cost | Rs 6.42/unit | Rs 2,56,800 |
Compare with TANGEDCO HT Industrial: Rs 7.00/unit x 40,000 = Rs 2,80,000
Monthly savings: Rs 23,200 | Annual savings: Rs 2,78,400
The savings under third-party PPA are much thinner due to CSS and additional surcharge. However, as TNERC progressively reduces CSS (which it has been doing), the third-party model becomes increasingly viable.
Banking: How It Works in Practice
Tamil Nadu's banking provision is one of the most generous in India for solar open access consumers. Here is how it works month by month:
Example: 500 kW Solar Plant, 400 kW Consumer Load
| Time Period | Solar Generation | Consumer Demand | Action |
|---|---|---|---|
| 6 AM - 9 AM | 200 units | 400 units | Draw 200 from grid + 200 from solar |
| 9 AM - 3 PM | 600 units | 400 units | Consume 400 from solar, bank 200 |
| 3 PM - 6 PM | 200 units | 400 units | Consume 200 from solar, withdraw 196 from bank (2% charge) |
| 6 PM - 6 AM | 0 units | 300 units | Withdraw from bank or draw from grid |
Annual Banking Settlement
At the end of the financial year (March 31):
- Any banked energy that has not been withdrawn is settled by TANGEDCO at the buyback rate (Rs 2.00-2.50/unit)
- This rate is significantly lower than the generation cost, so you want to minimise year-end surplus
- Proper system sizing (matching generation to consumption) maximises the financial benefit
Strategic Considerations for Tamil Nadu Open Access Consumers
1. Captive vs Third-Party: The Equity Decision
The CSS exemption for captive consumers saves Rs 1.00-1.50 per unit. For a factory consuming 50,000 units/month, that is Rs 50,000-75,000/month or Rs 6-9 lakh/year. This saving often justifies the equity investment in a solar plant.
2. Group Captive for Mid-Sized Consumers
If your demand is 100-500 kW, investing in your own solar plant may not be economical. Group captive arrangements allow you to hold proportional equity in a larger plant, accessing better economies of scale while enjoying CSS exemption.
3. Hybrid Strategy: Rooftop + Open Access
Install rooftop solar to the maximum extent your roof allows (zero grid charges, cheapest per-unit cost), then source remaining requirements through open access. This layered approach minimises your overall electricity cost.
4. Monitor TNERC Orders
TNERC revises wheeling charges, CSS, and banking provisions periodically. Stay updated on regulatory changes that could affect your open access economics. TNERC orders are published at tnerc.gov.in.
Getting Started with Open Access Solar
Open access solar in Tamil Nadu involves regulatory complexity, commercial negotiations, and grid connectivity procedures that require experienced guidance. The key steps are:
- Assess your eligibility (minimum 100 kW demand for renewable open access)
- Evaluate captive vs third-party based on your capital availability and risk appetite
- Identify solar plant options (existing plants with available capacity or new project development)
- Model the complete cost including all charges, losses, and banking impact
- Apply for connectivity through TANGEDCO
Use our solar savings calculator for an initial open access cost assessment, or contact Tristar for a detailed feasibility study tailored to your facility's consumption pattern and location.
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