The cost of going solar with a system that would power most of the domestic appliances — lights, fans, television and computers — is beyond the reach of the average middle class household.

Vendors at the expo on renewable energy organised by the Tamil Nadu Energy Development Agency (TEDA) organised in Chennai last week quoted prices between Rs.1.6 lakh and Rs.1.8 lakh for a 1 KW (kilowatt) domestic rooftop solar power system. Most of them were unwilling to commit upfront on the 30 per cent subsidy offered by the Union Ministry of New and Renewable Energy. The Tamil Nadu government’s recent announcement of a Rs.20,000 subsidy has also not come into effect.

The handing out of the Central Government subsidy has not yet been streamlined, says K.E.Ragunaathan, one of the State’s earliest solar energy entrepreneurs who started Solkar Solar Industry Limited in 1984. That is the main reason why most vendors are unwilling to commit on it while billing consumers upfront. “Several solar power vendors have closed operations over the past year because of losses suffered in not getting the Central government subsidy’’, he says.

A few other vendors, on the condition of anonymity, said most of the quotes for the systems were being made without accounting for the government subsidies. Consumers opting for such solutions will do well to know exactly what corners are being cut to ensure the lower rates. “Often poor battery packs are being sold because battery prices have shot up over the past year even though solar photovoltaic panel costs have come down.”

Mr. Ragunaathan sees the current power crisis as a window of opportunity to encourage more people to reduce dependency on the state power grid. “The State government currently levies a VAT (value-added tax) component of 5 per cent on solar power components. Where is the incentive for the consumer to opt for solar inverter if the regular electric inverter is also taxed at same five per cent ? If the tax component is cut or waived, it would lead to a considerable reduction in the entry price.”

Fly-by-night operators

There is also the problem of several fly-by-night operators who are setting shop to cash in on the situation.

“I was amused to see advertisements for some solar inverters at very cheap prices,” Manu Karan, who works for a leading multi-national solar company, says. “It is just a solar photo-voltaic panel attached to an inverter and people are charging up to Rs.30,000 for those. I don’t think anyone who works for the industry would even consider buying them.”

Mr.Ragunaathan says it is a “now or never” situation to get the people involved. “Once the Wind Energy picks up generation within the next two months and Koodankulam plant starts adding the numbers, the need to go solar will no longer be attractive.”

Neighbouring Kerala had last year targeted to move 10,000 households to solar power, with each household accounting for a 1 KW rooftop power system. That accounted for a reduction of 1 MW of power demand to the grid. Among other things, Mr.Ragunaathan points out, they reduced the VAT on solar power systems to one per cent.