The Tamil Nadu Solar Policy states that end users especially the HT (high tension) power consumers

and select LT power consumers are obligated to the SPO, with a 3% SPO mandate for 2013, which
increases to 6% in 2014. The SPO will be on the total consumption of non solar power irrespective of
the source of generation. That means that 3% to 6% of the total electricity consumed should come
from solar. Consumers that are mandatory obligated under the SPO are as follows

HT Consumers (HT Tariff I to V): Special Economic Zones (SEZs), government

educational institutions, government Hospitals, industries guaranteed with 24/7 Power,
telecom towers, All colleges and residential schools, all buildings with a built up space of
20,000 square meters or above
LT Commercial (LT Tariff V)

Entities that fail to oblige with the SPO will have a penalty equivalent to the price of Solar REC (Rs
13.400/kWh) levied on to them. The penalty will be payed to TANGEDCO, which will be used to
purchase Solar RECs (Renewable Energy Certificates) from the market.

A company can fulfil the SPO through the following methods, (1) set up a captive power plant to
generate solar power. The power plant can be installed on the rooftop or on off premises. (2)
Purchase from third party, it can purchase solar power from a third party solar power plant, the
power is purchased from solar power plant without the hassle of having to install and operate one (3)
Purchase power from TANGEDO at solar tariff, the price per unit will be higher to the normal tariff
(4) purchase solar RECs for the deficit, this is a costly route because Solar RECs have a flooe price of
Rs. 9300 and forbearance price of Rs. 13,400 per REC.