How was your experience setting up a manufacturing facility in Tamil Nadu?
We wanted our factory up and running as per our drawing board plans. Initially we were apprehensive if we could achieve the timeline and also get the right talent to take it forward. On both these aspects, we were pleasantly surprised. We got everything on time. We deal with high temperatures and from the environmental aspects we are classified as a red category industry. Securing a site that is permitted for red category industrial operations and located close to a major urban centre is quite rare. Credit should be given to the Tamil Nadu government and the State Industries Promotion Corporation of Tamil Nadu (SIPCOT) for having a vast land bank. Land and infrastructure appeared to be formidable barriers, but the state swiftly supported them. The other thing that made us very happy was the quality of talent in the state.
An entirely new government has come to power in the state. As a major investor, how do you see the change?
Tamil Nadu has demonstrated policy stability irrespective of regime changes. That is why many companies have reinvested in the state as they expanded. I think that is the smell test. If an existing investor likes a state and wants to expand, they will build more in the state.
Most of our construction happened during Covid and successive governments hand held us. It was during the AIADMK regime in 2020 that we got all the government orders and the incentive package. The actual execution happened in the DMK regime. The current TVK regime has maintained continuity of policy and we have started receiving our incentives from the present administration too.
Tamil Nadu, despite being a renewable-rich state, has lagged behind in solar deployment. Your views?
From a deployment standpoint, Tamil Nadu was the leader in renewables at one point. But then other states like Rajasthan and Gujarat caught up. The state has always been strong in manufacturing renewables, be it wind turbines or other components and has always maintained its lead in the clean energy sector. The decline in renewable deployment was due to a lack of investment in infrastructure. The recent state budget announced a slew of measures and I think we should see more renewable deployment. The state has announced an additional subsidy of up to Rs 1 lakh for domestic consumers installing rooftop solar systems under the Pradhan Mantri Surya Ghar – Muft Bijli Yojana. Once the capacity of substations is augmented, more residential renewable projects will be installed. It will also create space for independent developers to build smaller renewable assets.
What potential do you see for the state in the Surya Ghar and PM-Kusum schemes?
There is no reason why Surya Ghar cannot go in Tamil Nadu. The state has great solar irradiation. Also, the state does not have much high-rises when compared to cities like Noida. This lends very well to rooftop solar. On the agriculture front, if the feeder segregation happens in rural sectors, then we could see the rollout of PM-Kusum scheme, like the way it is happening in Andhra Pradesh, Karnataka and Maharashtra.
There is a thinking now in the government to get back to a higher penetration of renewables for all the right reasons, mostly economic. This will spiral to more deployments, but infrastructure has to come first.
Are there any dedicated policy measures the government should consider?
There are plenty of opportunities with the free trade agreements signed recently with the UK, Australia and others. Tamil Nadu is benchmarking against Vietnam and other Asian countries. If we are competing with a country like Vietnam, there is a delta between the costs of power. Industrial consumers bear a cross-subsidy surcharge to help offset the subsidised tariffs offered to domestic and agricultural consumers. Renewables can solve the cost of power differential. If both these segments solarise rapidly, there could be an opportunity to reduce the cross-subsidy surcharge and make industrial power more competitive.
Instead of bringing a solar policy, it could be embedded in the industrial policy or the electricity policy. The state should relook at it over the next five years, considering the potential of renewables and the available infrastructure and plan accordingly. With renewed focus, I think we should be able to see more investments coming back. The state has good weather, strong industrial base and the focus on renewables has come back now. There is no reason why Tamil Nadu cannot be in the top spot for renewables in the country.