Consultant moots community solar powerproject to replace subsidy, cut govt’s losses

Though the subsidy objective is to support residents consuming less energy, the current subsidy disbursement mechanisms favour the higher consumption segment under domestic tariff slabs, said Martin Scherfler, co-founder of Auroville Consulting.

The suggestion for community solar project comes at a time when rumours of tariff hike are doing the rounds with Tangedco’s outstanding debt touching Rs 1.34 lakh crore and the gap between the average cost of supply (Rs 9.06/unit) and average rate of realisation (Rs 6.7/unit) is at Rs 2.36 per unit.

“Sixty per cent of the 21 million domestic service consumers are falling under slab 1 (below 100 units) while slab 2 (up to 200 units) accounted for 26% in 2019-20. The consumers in the slab 1 and 2 benefits from 39% of the total subsidy and cross-subsidy allocation, whereas slab 3 (up to 500 units) and slab 4 (above 501 units) consumers who account for 41% of domestic service connection, benefit from 61% of the total subsidy and cross-subsidy allocation,” Martin said.

“On an average, a slab 4 consumer received close to four times more subsidy and cross-subsidy compared to an average slab 1 consumer,” he pointed out.

Stating that slab 1 and 2 consumers will be hit if a tariff rationalisation was done, he suggested that based on the community solar experience at Auroville, all domestic slab 1 and 2 consumers could be transitioned to community solar energy systems under net feed-in mechanisms.

“They should be provided with a direct benefit transfer equal to the current subsidy and cross-subsidy benefits,” he added.

A senior Tangedco official, however, told DT Next that such proposals look good only on paper and are very difficult to implement on a large scale.

“It requires massive investment and tough political decision to do away with subsidy for target groups,” the official added.