Archive · 29 Oct 2025
Free Electricity in Tamil Nadu Hinders Solar Power Adoption: Study
Imagine a state in India that gives away a lot of electricity for free or very cheaply.
A new study looked at why people there aren't putting up solar panels on their homes or farms as much as they could.
It turns out, because electricity is so cheap already, it's hard for solar panels, which cost money to set up, to seem like a good deal.
For farmers, a government program to help them get solar pumps isn't working because they're used to getting free electricity and don't want to start using meters that might lead to charges.
Even for homes, the cheap grid electricity makes it less attractive to install solar.
The study suggests that if the government wants more solar power, it needs to rethink how it gives out electricity and help people more directly to afford solar.
A study by Auroville Consulting found that free and subsidized electricity in Tamil Nadu hinders solar power adoption.
The PM KUSUM-C scheme for farmers has seen no adoption in Tamil Nadu since 2019, partly due to the introduction of energy meters.
The PM Surya Ghar scheme for residential rooftop solar also has low uptake because of the state's subsidized electricity.
Tamil Nadu's electricity subsidy has significantly increased, creating a 'subsidy trap' that makes solar investments less viable.
The state has realized less than 2% of its estimated 60GW rooftop solar potential, with recommendations for reforms like 100% subsidy under PM KUSUM-C.
- Who
- A study by Auroville Consulting, in collaboration with World Resources Institute India
- What
- Found that free and subsidized electricity schemes in Tamil Nadu are a major barrier to the adoption of solar power, including under central government schemes like PM KUSUM-C and PM Surya Ghar.
- When
- As of July 2025, with data referenced up to mid-2025 and projections for 2030-31.
- Where
- Tamil Nadu, India
- Why
- The availability of heavily subsidized and free electricity makes it difficult for solar power investments to compete, and the requirement of energy meters for schemes like PM KUSUM-C is perceived as a step towards reintroducing charges for farmers.
Central Government Schemes
State Government Policies
Incentives for Solar Adoption
Central Government Schemes
Offers subsidies and potential export incentives for farmers (PM KUSUM-C) and households (PM Surya Ghar) to adopt solar energy.
State Government Policies
Provides free and heavily subsidized electricity to domestic and agricultural users, making grid electricity artificially cheap.
Farmer Scheme Implementation (PM KUSUM-C)
Central Government Schemes
Aims to provide energy and water security for farmers with subsidies for solar pumps.
State Government Policies
Requires the installation of energy meters, which farmers perceive as a move towards reintroducing electricity charges, leading to opposition and non-adoption.
Business Case for Rooftop Solar
Central Government Schemes
Provides financial support for households to install solar power systems.
State Government Policies
The sustained low grid tariffs due to subsidies and cross-subsidies undermine the economic viability of household rooftop solar installations.
- Study Focus
- Distributed solar energy (DERs), rooftop solar, and solar for agriculture in Tamil Nadu
- Think Tank
- Auroville Consulting
- PM KUSUM-C Status (July 2025)
- No adoption in Tamil Nadu; 14.7% target achieved nationwide
- PM Surya Ghar Status (July 2025)
- 99,244 applications in Tamil Nadu, less than 40% installation realization
- Tamil Nadu Electricity Subsidy Increase
- From ₹5,600 crore (2014-15) to over ₹16,000 crore (2025-26)
- Technical Rooftop Solar Potential (Tamil Nadu)
- Over 60GW
- Realized Rooftop Solar Potential (Tamil Nadu, mid-2025)
- Less than 2%