The recently released consultation paper for solar PV as well as solar thermal by TNERC proposes solar PV tariff at the rate of Rs. 5.78 per unit and solar thermal at the rate of Rs 8.34 per unit. While Tamil Nadu is planning to install 3000 MW solar PV and TNGEDCO has already signed LOI’s with the investors in solar PV at an earlier proposed tariff of Rs 6.49 per unit, the recent consultation paper initiated by TNERC is big blow to the investors who are planning to set up solar power plant in the state. The tariff determined by TNERC based in this consultation paper will supersede the earlier tariff offered to investors by TNGEDCO. While the PV prices are now shooting up and weakening of rupees, it has become difficult for investors to commission solar plant Rs. 7 Cr. Per MW which is considered as capital cost by TNERC. The regulatory uncertainty in solar projects will shake up the investors confidence, which will have cascading effect and will increase the cost of finance and subsequently the electricity tariff. There is a need to have clear policy for promoting large scale solar project in the country.