Post on 14-Apr-2018
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BRIDGE TO INDIA, 2012Illustration by Dwarka Nath Sinha
The IndiaSoar
HandbooJne 2012 edition
A complete industry overview
or solar energy in India
With spport ro:
7/30/2019 The India Solar Handbook
2/44 BRIDGE TO INDIA, 2012
7/30/2019 The India Solar Handbook
3/44 BRIDGE TO INDIA, 2012
The IndiaSoar
HandbooJne 2012 edition
A complete industry overview
or solar energy in India
7/30/2019 The India Solar Handbook
4/44 BRIDGE TO INDIA, 2012
BRIDGE TO INDIA
THE INDIA SOlARHANDBOOk
June 2012 edition
2012 BRIDGE TO INDIA Energ Pvt. ltd.
A rights reserved
Jne 2012, New Dehi
No part o the INDIA SOLAR HANDBOOK
may be used or reproduced in any manneror in any orm or by any means without
mentioning its original source.
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DISclAImER
cover Istration
Dwarka Nath Sinha
Design & laot
Manasi Lamba
To sponsor
the November 2012 edition othe INDIA SOlAR HANDBOOk,
contactNehat kar
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7/30/2019 The India Solar Handbook
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The PV market opportunity in IndiaInternationa poi oparison
Soar irradiation in India
Indian soar poiies
Nonpoi projet aoations
Renewabe Prhase Obigations
REc ehanis
Deand growth and projetions
The PV manuacturing industry in IndiaStats
Doesti ontent reqireent
maret opportnit or oreign anatrers
PV anatring oreast
InterviewsDr. Thoas A. lois, SGS Grop manageent
mr. Ravi khanna, Adita Bira Grop
mr. maro Winsberger, Stron Energ
mr. Jens Brgtor, GIZ
mr. Jan mar Raitz, IBc Soar
mr. Oiver Herzog and Dr. Tobias Engeeier,
BRIDGE TO INDIA
Annexure
cONTENTS
01
03
05
08
12
12
15
19
20
20
21
22
24
26
28
29
31
33
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THE PV mARkETOPPORTuNITy
IN INDIAINTERNATIONAl
POlIcycOmPARISON
In the initial, Feed-in-Tari (FiT)driven phase o the global PV market,
European countries, especiallyGermany, Spain and Italy, have taken
the lead. The concept o compulsoryconsumption quotas o renewable
energy (RPOs) has also rst beenintroduced in Europe. Both market
instruments have subsequently beenreplicated and urther developed by
other countries across the world.
As the solar PV industry entersinto its second phase o nearing
commercial parity with other energysources - new markets, with new
policy support and high irradiationlevels are increasingly coming into
ocus.
matre marets
The PV market in these countries
is based on two main drivers: theircommitment to reduce their carbon
ootprint and their desire to reduce thedependency on imported ossil uel.
The average solar irradiation levels
tend to be lower in these countries.
The introduction o highly attractiveFiTs and the maturing o the industryhave contributed to large-scale
capacity additions in these markets.
The current economic slowdown inmany European countries, especially
Spain and Italy, has contributed to asignicant reduction o FiTs, making
these markets less attractive. Also,with large capacities o solar power
already installed, the growth in these
markets has been declining or thepast ew years. As a result, the PVindustry is now engaging with new
markets that oer opportunities oruture growth and give them a more
diversied portolio o market risks.
New marets
Many new markets like India, Australiaor South Arica have the advantage o
high solar irradiation. Their current
installed capacities are still negligibleas compared to the mature markets.
Growth o solar power in thesemarkets has been initiated by new
government initiatives through FiTsand Renewable Purchase Obligations
(RPOs).
Fndaenta Driver
Irradiation
Wh/2/
per da
long Ter
Energ
Defit
FiT per Wh RPO capita
Sbsid
matre arets
caiornia uS
Geran
5.2
2.7
No
No
~M10 (0.15)
~M09 (0.14)
Yes
No
Tax credit
Yes
Ita 3.3 No ~M11 (0.17) Yes Yes
Spain 3.7 No ~M11 (0.17) Yes Yes
New marets
India 5.5 Yes (High) M08 (0.12) Yes Yes
Soth Aria 5.2 Yes M11 (0.17) Yes Yes
Astraia 5.5 No M12 (0.18) Yes Yes
Ontariocanada 3.1 No M16 (0.25)* No Yes
Source: REN 21 Global Status Report, BRIDGE TO INDIA analysis*For projects less than 10MW
The current economic
slowdown in many
European countries,
especially Spain and
Italy, has contributed to
a signicant reduction
o FiTs, making
these markets less
attractive.
01
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Soth Aria has high solar resources
and is an upcoming market orsolar. The country has opted to buy
alternate energy rom private playersto alleviate their energy constraints.
So ar, 1,450MW o solar PV and
200MW o CSP has been allocatedby the government. This allocationhas been done under two windows.
Recently, nine solar PV projectstotaling 417MW and one 50MW CSP
project have been allocated underthe second window. An additional
401.47MW is still to be allocated.
Astraia has some o the highestaverage solar irradiation levels in
the world and has a competitive,open electricity market. The remote
locations in Australia, which oer thebest solar resource, however, oten
lack grid and road inrastructure. TheAustralian solar market is dominated
by rootop installations. There areover 500,000 solar PV installations on
Australian homes and schools.
Ontario (Canada) is a ast emergingsolar market with an expectedinstalled solar PV capacity o
2,800MW by 2015. The capacity
addition is mainly driven by the FiT
policy. The FiT policy was introducedin 2009 but is only applicable or
projects less than 10MW. The tarioered or ground mounted solar PV
project is around M16 (O 0.24)/kWh,
which is one o the highest in theworld. The market potential or largesolar PV projects without government
support is low.
India, with liberal policies or thepower sector, a high potential or
solar power and a variety o centraland state-level incentive schemes
presents a particularly goodopportunity or the solar industry.
The market is supported by FiTs toprovide an initial thrust. Further, by
introducing the Renewable EnergyCerticate (REC) mechanism and
RPOs, the government is keento create demand-driven market
or solar power in India. Reverse-bidding auctions in some programs
have signicantly reduced the FiTs,aecting the protability o projects. In
the long-term, however, solar power isa key strategic choice or this energy-strapped, large and high growth
economy.
India, with liberalized
policies or the power
sector, a high potential
or solar power and a
variety o central and
state-level incentive
systems, presents
a particularly goodopportunity or the
solar industry.
Mature markets
New markets
cAlIFORNIA
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SOlARIRRADIATION ININDIA
03
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INDIAN SOlARPOlIcIES
Nationa Soar mission
Since its launch in 2009, the NationalSolar Mission (NSM) has been the
key-driver o the growth o the Indiansolar industry. It targets installations
o 20GW o grid-connected solarpower generation, 2GW o o-grid
applications, 20m sq. meters o solarthermal collector area or industrial
applications and 20m solar lightingsystems or rural areas by the year
2022. The mission aims to achieve
these objectives through internationalnance, technology transer anddomestic manuacturing, as well as
through the implementation o RPOsand by preerential taris.
In the rst o its three phases,
rom 2010 to 2013, the governmentannounced the broad policy
ramework to achieve the objectiveso the NSM by 2022. This ramework
incentivizes the construction o
1,000MW o grid-connected powerplants, encouraging the moredeveloped PV technology as well as
CSP equally with 500MW each1.
The rst batch o projects under
phase one o the NSM was oeredin autumn 2010. As many as 333
project developers had put orwardbids worth 1,815MW or 150MW o PV
projects. Due to the over-subscription
o the projects, a competitive, reverse
bidding process was initiated or the
allocation o the projects. This processhas since been made the norm or
project allocations under the NSM.Based on this, developers that oered
the highest discount on the initial tari
o M17.91 (0.27)/kWh were awardedthe projects. As a result, taris ellby around 30% to an average o M12
(0.18)/kWh. From the rst batch oallocations, 125MW o PV was installed
and commissioned as o May 2012and an additional 20MW is expected to
come up in the months ahead.
Project allocations or batch two ophase one o the NSM were made
in early December 2011. For this, acapacity o 350MW o PV was allocated
and PPAs were signed or 340MW inJanuary 2012. In this batch, due to
competitive bidding, the taris ell bya urther 30% to an average tari oM8.2 (0.12)/kWh. The deadline or thecompletion o these projects is
March 2013.
The NSM has also introduced theconcept o bundling, where the
government (through the state-ownedpower trading company NVVN) willbuy the high cost solar power rom
developers and then bundle it with un-allocated low cost thermal power rom
the ederally owned power generatorNTPC. This power will then be sold at
an average cost o around M4 (0.06)/kWh to the state utilities.
In order to reduce the payment deault
risks inherent in Power Purchase
Bnding o soar power
Each ederal power generatorsuch as NTPC has to sell 90%
o its generated power to statedistribution companies (DISCOMS)
as mandated by the government.The other 10% is termed as un-
allocated power which can be sold
by NTPC through NVVN in the openmarket.
Currently NTPC has 6,000MW ounallocated power, which can be
bundled with as much solar powerrom projects under the NSM. It
bundles the power at a ratio o 4units o existing power to 1 unit o
solar power.
THE INDIA SOlARcOmPASSAs part o Market Intelligence
at BRIDGE TO INDIA, we provide
comprehensive, analytical and up-to-
date research on the Indian market
to our customers through the INDIA
SOLAR COMPASS our quarterly
solar market report. The INDIA
SOLAR COMPASS covers all latest
developments on the key market
undamentals o policy, projects,
nancing and the upstream industry
and oers insights on the direction
o the market.
The India Solar Compass is an
essential tool or all companies and
investors engaging with the Indian
solar market. Subscribers include
some o the leading international
solar companies, such as Bosch,
IBC, Siemens and Samsung.
The July 2012 edition o the INDIA
SOLAR COMPASS
content
I. Indias Soar maret
Overview and Latest Market
Developments
Status o the States
Focus on Resale o PPAs in Gujarat
Industry Developments
Challenges and Outlook
II. Indepth Epert Interview
III. ke Qestion Answered
What is the uture o the Domestic
Content Requirement in India?
To purchase our reports or subscribe
to the India Solar Compass, please
visit the Reports section on www.
bridgetoindia.o or send an email
to ohit.anand@bridgetoindia.o
05
1 MNRE National Solar Mission, Guidelines or New Grid Connected Solar Power Projects, July 2010
INDIASOlAR
cOmPASSJ 2012 Edition
A Brie Otine
BRIDGETO INDIA,2012Photograph courtesy Istock photo
maret DashboardA snapshot o the markets
undamentals
latest maret InsightsAn analysis o the policies,
projects, industry and fnance
A ke Qestion AnsweredWhat is the uture o the Domestic
Content Requirement in India?
OtooQuarterly projections or the
Indian solar PV market
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* Approximate - actual tari could vary rom project to project
PV @ K12.5 per kWh
COAL+PV @ K4.5 per kWh
Bnding o soar power
06
Agreements (PPAs) with the nanciallyweak State Electricity Boards (SEBs),
the ederal government later approveda Payment Security Scheme worthM4.86 billion (74m) or projects under
phase one o the NSM. The scheme isimplemented by the Ministry o New
and Renewable Energy (MNRE), whichwill allocate the unds to the NVVN
through a Solar Payment SecurityAccount (SPSA).
Gjarat Soar PoiThe state o Gujarat was the rst Indian
state to launch its own solar policy in2009. The current policy is operative
until 2014 but a new policy is expectedbeore it ends. The initial target was
to achieve an installed capacity o500MW. Given the interest rom a
large number o developers and anassumption that some projects may
not be implemented, the government
allocated projects worth 958.5MWo PV. Most projects were delayedand only about 132MW o PV met the
original commissioning deadline o
December 31st 2011. A capacity o654.81MW o PV has been installed as
o May 2012.
The Gujarat Solar Policy is the only
policy, which has awarded projectswith a xed FiT, unlike the NSM.
Land acquisition, availability ogrid inrastructure and nancial
closure have proved to be the biggestchallenges in project execution
in Gujarat. Only about 14% o theallocated capacity had come online by
the scheduled deadline o December31st 2011. Thereater, a new tari
regime was applied to projects tobe commissioned ater January 28th
2012. These taris are lower thanthose under the rst two phases o the
Gujarat solar policy.
Due to delays in project execution,some developers ailed to notiy
the Gujarat Energy TransmissionCorporation Limited (GETCO) to
provide or grid connectivity on time.Though these projects were installed
beore the deadline o January 28th2012, they could not be commissioned.
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The state authorities allowed orthese projects to be considered
as provisionally commissioned,exempting them rom the new and
lower tari regime. A total o 604.9MWo PV projects were given ocial
commissioning certicates in April2012 during the inauguration o the
Charanka Solar Park in Patan districto Gujarat. As o May 2012, 654.81MW
has been commissioned in Gujarat.Gujarat is a power surplus state
and does not need to allocate more
projects this year to meet its RPOrequirements. In spite o this, certainstate ocials have communicated
publicly that Gujarat will continueto promote solar power. Developers
are now awaiting new phase threeallocations in Gujarat, expected orall o 2012. More than a 1,000MW
worth o projects have pre-registeredwith the government or any uture
allocations.
Rajasthan Soar PoiThe Rajasthan Solar Policy, launched
in July 2011, has a long-term targeto 12GW o installed solar power in
the state by 2022. It aims to achieve200MW by 2013 and an additional
400MW by 2017, split equallybetween PV and CSP projects, or
the direct sale o power to the statesdistribution companies. In addition, it
aims to achieve 50MW o rootop andsmall scale PV installations by 2013.
Projects will be awarded through aprocess o competitive bidding.
Gjarat taris or the new ontro period starting Jan 29th 2012
*The levelized tari is not applicable or MW scale projects; only applicable or kilowatt scale projects
Proposed Tari in M/Wh 12 ears 13 earsl eveized*l
megawatt Sae PV Projets
kiowatt Sae PV Projets
Soar Thera Projets
NA
11.25
With AD
Without AD
With AD
Without AD
With AD
Without AD
9.98 (9.28)
(10.37)
11.14
12.44
(11.55)
(12.91)
7.00
7.50
The submission o the Requestor Selection (RS) or plants was
expected to take place by February2012 but the process has been delayed
indenitely. According to the RSdocument, the competitive bidding
or the 250MW worth o projects willinclude 50 rootop projects o 1MW
each, 100MW o Solar PV and 100MWworth o CSP projects. Plant sizes will
be a minimum o 5MW and maximumo 10MW or PV and a maximum o
50MW or CSP.
The Rajasthan Solar Policy hasincorporated some lessons romorerunners like the NSM and the
Gujarat Solar Policy. It does not havethe 5MW limit on individual PV projects
which made the NSM less attractive tolarge players but, unlike the Gujaratpolicy, it has placed xed limits o
61MW on the total capacity allocationto encourage competition among
developers. The policy also addresses
the concerns o developers with regardto the allocation o land and water,availability o a transmission network
and the localized supply chain.
The policy promotes domesticmanuacturing by providing incentives
or developers with manuacturingacilities in Rajasthan. PV projects
worth 200MW have been plannedor allotment to developers planning
to build manuacturing acilities inRajasthan. These projects are required
to use the modules manuactured in-house. These projects have yet to be
made available or allocations.
BRIDGE TO INDIA, 2012Source: BRIDGE TO INDIA
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Due to its high irradiation levels and
availability o space, Rajasthan willlikely become the hub o solar power
generation in India. Under NSMphase one batch one, out o 145MW
o solar PV projects selected, 70% are
in Rajasthan. Under phase one batchtwo o the NSM the state has alreadyattracted around 60% o the bids or
projects and is likely to attract moredevelopers under its state policy.
karnataa Soar PoiKarnataka announced its solar policy
in July 2011 and targets 350MW oprojects by 2016. The state had called
or bids or 80MW worth o projectslast year. The winning bids were
announced with a delay due to a legalcomplication (reer to BRIDGE TO
INDIAs April 2012 edition o the IndiaSolar Compass). Due to the delay in
announcements, the developers weregiven a chance to re-submit their bids.
The results were then announced inApril 2012 and 60MW o solar PV and
20MW o solar thermal was allocated.The lowest bid, which stood at M7.94
(0.12)/kWh, was submitted by HelenaPower Private Limited (allotted 10MW
PV) and the highest successul bidat M8.50 (0.13)/KWh was submitted
by Welspun Solar AP Private Limited(allotted 7MW PV). The policy has no
domestic content requirement.
NON-POlIcyPROJEcT
AllOcATIONSOdishaThe Indian state o Odisha (ormerlyOrissa) has allocated projects without
a state specic solar policy in place toulll the RPO. The Odisha Renewable
Energy Development Agency (OREDA)oered ve solar PV projects worth
5MW each through a competitivebidding process in December 2011.
A single bidder was allowed to bid
or only one 5MW project. Ater the
determination o the L1 price (thelowest quoted selling price in M per
kWh o electricity) the successulbidder had the option to take the
additional our projects (each o 5MW)at the L1 price. To avail this option, the
bidder would have to show a net worthequal to ve times o the net worth
that was required or a single projecto 5MW. The aggregate net worth
required or being selected or all veunits (a total o 25MW) was M700m
(10.8m). The potential to obtain all25MW has driven companies to bid
very aggressively. The bid results wereannounced on February 7th 2012.
A record M7 (0.1)/kWh rom AlexGreen Energy has been the lowestbid and they have taken up all o the
25MW allocated.
madha PradeshMadhya Pradesh came out with atender to allocate 200MW o solar PV
projects through a reverse biddingprocess on December 14th 2011.
This allocation was not guided by a
comprehensive solar policy. MadhyaPradesh received bids totalling 430MWrom twelve developers. Out o the
proposed 200MW only 125MW hasbeen allocated and 75MW has been
reserved or previously signed MoUs.Alpha Inra emerged as the lowest
bidder quoting a tari o M7.90/kWh(0.121/kWh) or a 20MW project.
Welspun quoted M8.05/kWh (0.124/kWh) or two projects o 50MW each
and one project o 25MW. Welspunwas nally allocated 105MW capacity.
These were the only two developersthat were allocated projects. List
o bidders who were not allocatedprojects included ACME, Azure,
Simplex Inra, Sai Sudheer, ArjunGreen Power, ESSEL Inra and IL&FS.
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Poi Target Projetaotentethod
FiT ProjetSizes
Doestiontentgideine
Epetedinstaedapaitb 2013
NSm 500MW by2013 Reversecompetitivebidding
AverageFiT or rstbatch:M12.5(0.19)per kWhFor secondbatch: M8.20(0.12) perkWh
Batch 1:5MWBatch 2:Min: 5Max: 20MW
Yes (cellsand mod-ules)Exception:Thin-lmmodules
480MW
Gjarat 500MW by2014
Fixed FiT onrst comebasis
M15 (0.23)per kWh orthe rst 12years andM5 (0.07)per kWh or
the next13years. Newtari ordelayedprojects
Min 5MW;Max no cap
No 700MW
Rajasthan 300MW by2013
Reversecompetitivebidding
Biddingprocess or150MW PVindenitelydelayed
Min: 1MWMax: 61MW
No.Exception:200MWprojectsor modulemanuactur-ers
250MW
karnataa 126MW by
2013
Reverse
competitivebidding
Bidding
results an-nounced or80MW
Min: 3MW
Max: 10MW
No 80MW
BRIDGE TO INDIA, 2012Source: BRIDGE TO INDIA
Poi projet aotents
Poi Target Projetaotentethod
FiT ProjetSizes
Doestiontentgideine
Epetedinstaedapaitb 2013
Odisha 50MW an-nounced;25MWallocated
Reversebidding
FiT or sin-gle 25MWallocation:M7 (0.1)/kWh
Min: 5MWMax: 25MW
No 25MW
madhaPradesh
200MWannouncedand al-located
Reversebidding
AverageFiT: M9.5(0.14)/kWh
Min: 5MWMax: no cap
YesException:Thin-lmmodules
55MW
Projet aotents b states withot a soar poi
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STATE SOlAR POlIcy STATuSPPAs
SIGNED
FINANcIAlclOSuRE/
cONSTRucTIONcOmmISSIONED
PV PROJEcTS
GuJARAT
RAJASTHAN
kARNATAkA
mADHyA PRADESH
ODISHA
mAHARASHTRA
TAmIl NADu
ANDHRA PRADESH
HARyANA
uTTAR PRADESH
State Solar Policy under executionPhase 1: deadline Dec. 2010
Phase 2: deadline Dec. 2011
Phase 3: To be announced by end o 2011
State Solar Policy announced in April 2011
Base FiTs announced.
Bidding results expected by August 2012
(150MW to be allotted)
State Solar Policy announced in July 2011
Allocations announced in April 2012
(60MW solar PV and 20MW solar thermal)
Deadline or commissioning October 2013
Allocation through reverse bidding. Not
guided by policy.
Deadline or commissioning is Jun 2013
or projects up to 25MW and June 2014 or
projects greater than 25MW
Allocation through reverse bidding. Notguided by policy.
Deadline or commissioning is August
2013
Broad Renewable Energy Policy, No policy
specic to solar energy
State Solar Policy likely to be released
soon
Direct agreements likely
Memorandum signed with welspun or
a 100MW project
Broad renewable energy policy, No policyspecic to solar energy
No state solar policy
968.5MW
105MW
295MW
36MW
12MW
5MW
100MW
10MW
6MW
60MW
200MW
5.25MW
5MW8MW
25MW
5MW
25MW
11.2MW
5MW
153MW
5MW
7MW
5MW
15MW
20MW
10.5MW
100MW
2MW
8.8MW
5MW
8MW
50MW
235 MW
5.25MW
5MW
20MW
150MW
5MW
5MW
5MW
20MW
0.75MW
1MW
654.81MW
105MW
0MW
35MW
12MW
5MW
40MW
10MW
6MW
0MW
2MW
5MW8MW
11.2MW
5MW
3MW
2MW
2MW
10MW
9.75MW
2MW
7.8MW
2MW
2MW
State Policy
NSM batch I
NSM batch II
Migration
projects
RPSSGP
GBI
Direct RPO
NSM batch I
GBI
State Policy
State
allocations
RPSSGP
REC
Mechanism
NSM batch IRPSSGP
State
allocations
NSM batch I
NSM batch II
Migration
projects
RPSSGP
Direct RPO
NSM batch I
RPSSGP
GBI
NSM batch I
NSM batch II
RPSSGP
Direct
Agreement
GBI
RPSSGP
NSM batch I
RPSSGP
TOPPERFORmERS
STATuS OF THE STATES
POTENTIAl
RISERS
10
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PuNJAB
uTTARAkHAND
WESTBENGAl
cHATTISGARH
JHARkHAND
mANIPuR
DElHI
JAmmu AND
kASHmIR
kERAlA
TRIPuRA
mIZORAm
PuDucHERRy
ASSAm
HImAcHAl PRADESH
ARuNAcHAlPRADESH
NAGAlAND
mEGHAlAyA
SIkkIm
GOA
uNION TERRITORIES
No state solar policy
Existing broad renewable energy policy
No state solar policy
No state solar policy
No state solar policy
No state solar policy (Rootop projects
initiated by MIREDA)
No solar policy yet, notied their RPO
requirments. Solar rootop policy
expected.
Drat solar policy (Not ormalized)
Projects to be developed under NSM
o-grid and RPSSGP
Existing broad renewable energy policy
Drat solar policy (Not ormalized)
Drat solar policy (Not ormalized)
No state solar policy.
No state solar policy
No state solar policy
No state solar policy
No state solar policy
No state solar policy
No state solar policy
No state solar policy
Only central renewable energy policy
RPSSGP
Migration
projects
RPSSGP
GBI
RPSSGP
RPSSGP
Direct RPO
Direct RPO
Tota
8.5MW
7MW
7MW
2MW
4MW
16MW
1.5MW
2MW
2,274.25mW
2.5MW
12MW
1.5MW
515mW
6MW
2MW
5MW
2MW
4MW
4MW
2MW
976.56mW
No development so ar
No development so ar
No development so ar
No development so ar
No development so ar
No development so ar
No development so ar
No development so ar
No development so ar
No development so ar
No development so ar
No development so ar
STATE SOlAR POlIcy STATuSPPAs
SIGNED
FINANcIAlclOSuRE/
cONSTRucTIONcOmmISSIONED
PV PROJEcTS
Diret RPO: Projects initiated to ulll RPO obligations (project specic FiTs negotiated between utility &
developers) NSm: First batch o projects allotted under phase-1 o the NSM (includes migration projects)
RPSSGP: Rootop & Small Solar Power Generation Program under NSM GBI: Projects under MNRE GBI scheme
* We do not expect that all projects that have attained nancial closure will be constructed and commissioned.
NONmOVERS
BRIDGE TO INDIA, 2012
Source: BRIDGE TO INDIA
SlOWm
OVERS
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RENEWABlEPuRcHASEOBlIGATIONS(RPOs)In order to urther encourage powergeneration rom renewable sources,
the ederal government, throughthe Central Electricity Regulatory
Commission (CERC), has introducedRPOs or both renewable power in
general and solar power in particular.
Solar RPOs are the minimum amounto solar energy that obligated entities
- distribution licensees, open access
and captive consumers (1MW andabove) - have to have as a percentage
o their total available electricity.
Currently, these are set at around0.25% o the total consumption ostate utilities and vary across states.
A distribution utility, which distributes1 million kWh o electricity in a year, is
obligated to obtain 2,500 kWh o theserom solar energy. It can meet this
obligation by purchasing the requiredquantity o solar power directly rom
producers. Alternatively,it can buy solar RECs to ulll its
RPOs.
BRIDGE TO INDIA, 2012Source: BRIDGE TO INDIA
Soar RPO targets in seeted states Apri 2012marh 2013STATE RPO Target Target in mW
Gjarat 1.00% 451
Harana 0.75% 366
madha Pradesh 0.60% 166
Rajasthan 0.50% 152
karnataa 0.25% 87
maharashtra 0.25% 182
Tai Nad 0.25% 45
Pnjab 0.07% 6
RENEWABlEENERGycERTIFIcATES(REcs) mEcHANISm
RECs can be generated by any
developer who sells solar power tothe public grid at the Average Pooled
Purchase Cost (APPC) o the relevantdistribution utility or sells solar power
to third-party consumers at a mutuallydecided price. RECs are not applicable
or projects in which power is soldto the grid at a preerential tari.
Further, power producers that have
begun to sell power at a preerentialFIT are not allowed to later switch to
the REC mechanism.
The REC market is yet to pick up inIndia. The main challenge it aces, is
the lack o a long-term predictabilityo REC pricing. The CERC has set
a foor price o M9,300 (143) and aorbearance price o M13,400 (206)
per REC or the period o 2012-2017. The current REC foor and
orbearance prices are only applicablethrough 2017. As a result, developers
who build their case on RECs aceproblems in raising debt because they
are unable to project their returnsaccurately or the loan repayment
period, which in India is typically upto ten years.
12
A distribution utility,
which distributes
1 million kWh o
electricity in a year,
is obligated to obtain
2,500 kWh o theserom solar energy.
The current REC foor
and orbearance prices
are only applicablethrough 2017.
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REc Fraewor: Eigibiit
commercially. Such players wouldrather buy the RECs on the exchangethan develop solar capacity.
The REC market will grow once the
solar market strengthens in India andwhen longer-term price signals are
available. The market is also lookingto the government or making changesin the REC policy. Currently the RPOs
which create the primary market or
the RECs have to be ullled on a yearlybasis. As a result, obligated entities goto the market to purchase RECs only at
the end o a nancial year. This createsa spike in the cash fows o projects
rather than continuous cash fowsthroughout the year.
BRIDGE TO INDIA, 2012Source: BRIDGE TO INDIA
At the moment players are unclearabout the expected demand andsupply o RECs. This is closely
linked to the enorcement o theRPOs on distribution licensees,
captive consumers and open accessconsumers. I RPOs are enorced
eectively, distribution licensees likeTata Power and Maharashtra StateElectricity Distribution Company Ltd.
(MSEDCL) will develop their own
projects to meet their obligations.This is because they have a very highdemand or power and have the know-
how to execute power projects. On theother hand, captive consumers and
open access consumers with smalldemand will preer to buy RECs. This
is because solar RPOs are only 0.25%o total electricity consumption. For
a 1MW captive consumer, this wouldtranslate to 2.5 kW o solar RPO. Such
capacity is too small to be developed
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REcs an boost retrns signifant
BRIDGE TO INDIA, 2012
Source: BRIDGE TO INDIA
Doesti Indstria coeria70
60
50
40
30
20
10
0
5.5 6 6.5 7 7.5 8 8.5 9 9.5 10
lcOE INR
IRR(%)
IRR w/o REC
IRR with REC
Finania Investor
Strategi Investor
CAPEX= M90m/MW
REC revenue period = 5yrs
Rate o debt = 13%
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DEmAND GROWTHAND PROJEcTIONS
capait additionis rrent drivenaost esive bgovernent sbsidies
The installed capacity or grid-
connected solar power under thevarious policies by the end o 2012
will be close to 1GW up rom a mere22MW at the beginning o 2011 (all
PV). The growth has been driven bythe launch o the NSM and GujaratSolar Policy and the preerential
FiTs they oer. Currently, growth iscentering on grid-connected plants.
This trend is expected to continueover the next three years because
o a lack o incentives outside thepolicies and because solar power is
not yet commercially viable on a largescale. Growth o captive solar power
installations will be dependent on the
solar REC market in the short term.
Overview o SegentsFeed in Tari FiT
This segment has provided the viable
project development opportunitiesin the market until now. FiT project
installation in India has been drivenby the NSM and the Gujarat SolarPolicy. Gujarat has been the largest
contributor o Indias total installedcapacity. States like Karnataka, Odisha
and Madhya Pradesh have allocatedprojects under the FiT mechanism.
Going orward, NSM will be the biggestcontributor to capacity addition or the
FiT segment. More than 200 projectsdevelopers have been allocated
projects under preerential FiT inIndia. Welspun, Azure Power, ACME
Telepower, Mahindra Solar One, Lanco,Green Inra and Sun Edison among
others have been the leading projectdevelopers in India.
Projected market size till 2016is 4.5GW
FiT driven
RPO (REC)RPO (SP)
RPO (thermal-captive)
Grid-parity (commercial)
Diesel-parity (captive)
Diesel-parity (backup)
Telecom towers
2012 2013 2014 2015 2016
4000
3500
3000
2500
2000
1500
1000
500
0
Source: BRIDGE TO INDIA
B
RIDGETOINDIA,2012
Epeted soar instaed apait ear on ear
1,266
1,696
Tota: 12,053mW
STRATEGIccONSulTINGBRIDGE TO INDIAs Strategic
Consulting expertise lies in
assisting international clients to
engage the Indian market in the
eld o renewable energy, especially
solar energy. We combine strong
subject specic knowledge with an
interdisciplinary approach, and bring
together the nancial, technical,socio-economic, regulatory and
entrepreneurial aspects o business.
We develop viable, successul and
customized business models,
strategies and specic opportunities
that are adapted to the Indian
market. Our clients include REC,
BOSCH, IBC Solar and Pairan
amongst others.
With its extensive industry network,
market insights and projectknowledge on demand growth and
projections, BRIDGE TO INDIA is
able to provide customized solutions
to generate tangible success for its
clients. Our work encompasses the
following areas:
Market entry advisory
Competitive analysis
Business model development
Partnerships
M&A advisory
For more inormation, visit: www.
bridgetoindia.o/onsting
or contact tobias.engeeier@
bridgetoindia.o
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RPO REc
This segment consists o projectsthat will generate solar RECs and
sell them on the power exchange.Such projects are driven by RPOs o
states and are thus termed as RPO
(REC). This segment is yet to take obecause o a lack o nancing or suchprojects. The biggest hurdle has been
the clarity on revenue beyond 2017.The countrys rst solar Renewable
Energy Certicates were issued onMay 24th 2012 to M&B Switchgear.
Getting the certicates is a two-stepprocess - rst is the accreditation
with the State Load Dispatch Centre(SLDC) and then the registration by
the National Load Dispatch Centre(NLDC). M&B Switchgear is the rst
project to be registerd and our otherprojects have been registered since.
Jain Irrigation has been registeredor a 8.5 MW project in Maharashtra,
Kanoria Chemicals or a 5 MW projectin Rajasthan, Gupta Suns or a 0.5
MW project in Madhya Pradesh andNumeric Power Systems or a 1 MW
project in Tamil Nadu.Projected market size till 2016
is 0.3GW
RPO SP
Each state has a yearly RenewablePurchase Obligation (RPO). This is
guided by the aim to source 3% o thetotal power through solar by 2022.
States may set up their own plants togenerate solar power in order to meet
this requirement. BRIDGE TO INDIAterms such projects as RPO Solar
Power or RPO (SP). NTPC is workingon projects planned in Uttar Pradesh,
Odisha, Madhya Pradesh and AndhraPradesh. Mahagenco is constructing a
solar project in Maharashtra to meetthe states RPO.Projected market size till 2016
is 1.0GW
RPO thera aptive
Captive thermal power producers have
a solar specic RPO requirement.Requirements or thermal captive
power producers are enorced by
the state regulators. Industrieslike mining, chemicals and cement
have large captive power generationcapacities. Vedanta Aluminium, Jindal
Stainless, SAIL, Aditya Birla Group,
NALCO and BALCO among others arethe largest obligated entities in India.Projected market size till 2016 is 1.0GW
coeria captive
Commercial taris in India are ashigh as M9/kWh ( 0.14/kWh) in
certain states and commercial hubs.Solar power has already reached
commercial parity in some locationsacross India. This combined with REC
mechanism, makes or nanciallyattractive plants. As per BRIDGE TO
INDIA analysis, this market is poisedto take o rom 2014 onwards as
Renewable Energy Service Companies(RESCOs) start selling power with this
business model. Net metering will bea key driving actor o this business
model.Projected market size till 2016 is 2.3GW
Teeo towers
India will have 550,000 telecom towers
by 2015. 33% o the currently installedtowers are completely o-grid and
23% o them are situated in regionswith less than14 hours o grid supply
on average. Based on the currentcosts o diesel generated-units o
electricity and the Levelized Cost oEnergy (LCOE) o solar PV-generated
units, there already exists a signicantgap between the costs per unit
generated rom the two sources. Thishappens to be the case or both o-
grid tower sites as well as the grid-interactive sites with poor grid supply.
This has made telecom tower segmentas a ront-runner among diesel-parity
based market segments or solar PVsolutions.Projected market size till 2016 is 1.9GW
BRIDGE TOINDIA ProjetDeveopent
BRIDGE TO INDIA oerssolar PV project development
services. We engage technology
companies, investors and real
estate owners in solar PV project
development with a strong ocus
on commercially attractive rootop
business models. This includes
project scouting, technical and
commercial due diligence, energy
concepts or captive projects,
and site development including
permits. BRIDGE TO INDIA is
also developing independent
commercially attractive captive PV
projects.
For more inormation, visit: www.
bridgetoindia.o/projets
or contact oiver.herzog@
bridgetoindia.o
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THE PVmANuFAcTuR-ING INDuSTRy
IN INDIA STATuSThe Indian manuacturing industry
currently has an overall productioncapacity o about 1,250MW or
modules and 700MW or cells.
Indian manuacturing is mostlydependent on exports to international
solar markets. Indian manuacturershave been exporting 70% o their cell
capacity and 80% o their module
production capacity. The cutbacko FiTs in Europe and the excessivecompetition rom Chinese suppliers
has hit Indian module manuacturersadversely. In the growing domestic
market driven by the NSM and the
Gujarat state policy, Indian modulesuppliers have been able to gain a very
small market share. This has led to anunderutilization o the Indian module
manuacturing capacity.
In order to become globallycompetitive in an increasingly tough
market, Indian manuacturers willneed to change their business model.
They must reduce their costs in
production through a capacity rampup and vertical integration. MaharishiSolar is currently the only Indian
company with manuacturing acilitiesor ingots and waers; though it has a
total capacity o only 15MW.
ce anatrersin India*
mode anatrersin India*
* Data is only indicative based on industry interviews ; valid as on May 2012
The Indian
manuacturing industry
currently has an
overall production
capacity o about
1,250MW or modulesand 700MW or cells.
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Indian Soar PV Spp chain
DOmESTIccONTENTGuIDElINESFor the rst phase o the NSM aDomestic Content Requirement
(DCR) was introduced. In batch one ophase one o the NSM, the DCR was
restricted to c-Si modules. In batch
two o phase one, the restriction wasenhanced to c-Si cells too. Thin-lmmodules have been allowed to be
sourced globally or the entire phaseone o the NSM. The guidelines or
the second phase o the NSM (2013-2017) are likely to be announced in
the last quarter o 2012. Despitethe intentions, the industry realizes
that the DCR has been ineective inpromoting manuacturing in India. At
this point, it is unclear i the DCR willbe extended to phase two o the NSM.
The state policies o Gujarat,Rajasthan and Karnataka do not have
a domestic content requirement.Other states such as Tamil Nadu,
Orissa and Andhra Pradesh are alsoexpected to avoid mandating domestic
content or projects. Madhya Pradeshhas been the only state that has a
domestic content restriction. Thepolicy also includes a non-location
clause. Projects can be located allover India, to prot rom higher
irradiation or lower land-prices.The success o this policy can be
trend-setting or upcoming policies.
OPPORTuNITIESFOR FOREIGNmODulESuPPlIERSGoing by the current allocations or
2013, Indias solar market will seeprojects covering 985MW under the
NSM and various state policies. Amajority o the PV projects under
execution in India are using modulesrom oreign suppliers. Although
the NSMs domestic contentrequirement encourages the domestic
manuacturing industry, allowing theimports o thin lm modules has been
crucial or project development inIndia. At the moment, close to 55% o
commissioned projects in India haveinstalled thin lm modules. Thin lm
has also been pitched as a betterperormer or the Indian climate,
however this is yet to be proven underIndian conditions.
The duty regulations applied to the
import o materials or a PV project inIndia also serve as an encouragement
or oreign suppliers. The developersare entitled to discounts on the base
duty on the import and the excise.
Eectively, the only extra cost borneby developers in importing is that oshipping.
THE DOmESTIc
cONTENT
REQuIREmENTTackling module sales in India
INDIA SOlAR STRATEGy BRIEF
BRIDGE TO INDIAs Market
Intelligence expertise lies in
combining keen market insight with
in-depth and precise knowledge o
the industry and policy ramework
in India. We publish this knowledge
through short and topical strategy
bries. Our latest strategy brie oers
insight on the Domestic Content
Requirement (DCR) in India and how
international crystalline module
suppliers can succeed in the Indian
solar market in the presence o the
DCR.
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PVmANuFAcTuRINGFOREcASTThe PV manuacturing industry in
India had grown six-old rom under200MW in 2007 to a 1,250MW in 2011.This momentum has been broken due
to a global oversupply.
Large Indian business conglomeratessuch as Lanco Solar and Birla Surya
were planning to build completelyintegrated manuacturing acilities
o capacities as large as 600MW.Currently, most module and up-
stream expansion plans have eitherbeen cancelled or are on hold.
Manuacturing in India is expectedto regain the growth trajectory ater
2014 as the commercial and industrialparity projects in the domestic market
take o. Few large manuacturers who
are vertically integrated are expected
to dominate the market going orward.Module manuacturers who have been
providing EPC and other downstreamservices are more likely to survive a
consolidation. Going orward, a strong
domestic supply chain will bring downthe cost o raw materials or moduleproduction in India. As a result, the
domestic ingot and waer productioncapacity will be directly refected in
new domestic module manuacturingcapacities. New module production
capacities worth 2GW or more couldbe realized rom 2015 to 2020.
There is no domestic industry or
manuacturing equipment in India yet.The Indian PV manuacturing industry
is expected to provide an opportunityto the suppliers o PV manuacturing
equipment and the turnkey solutionproviders as and when the market
regains momentum.
PV manatring Foreast India
cuSTOmIZEDREPORTSBRIDGE TO INDIA provides in depth
market knowledge to clients through
customized reports to cover theIndian energy markets. Past, publicly
available reports include, among
others, an analysis o the Indian
energy market or the German
Environment Ministry, support or
REN21s Global Renewables Status
Report, an analysis o the Indian
Renewable Energy Market with
NREL, GIZ and IRADe, a report on
the Indian project development
processes or DENA and a report
on the Indian solar market with
Greentech Media.
New module
production capacities
worth 2GW or more
could be realized rom
2015 to 2020.
Source: BRIDGE TO INDIA
B
RIDGETOINDIA,2012
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INTERVIEWS Dr. Thomas A. Louis joined SGSIndustrial Services as GlobalBusiness Development Manager or
Renewable Energy in 2012. He has a20 years track record managing large
international programs in renewable
energy and power generation andmore than 10 years o experience inmanagement consulting and nancial
services
What potential do you see in the Indian
solar market and how is India dierent
rom other markets?
As the largest independentproessional services provider in the
world with a global reach, a local
presence and a strategic interestin renewable power generation, wesee major trends avoring growth
in the Indian solar market. First,there is increasing electricity
consumption per capita, populationgrowth and hence demand or
building new power generationcapacity. Second, the levelized cost
o electricity generation (LCOE)using solar power, whether using
photovoltaic (PV) or concentratingsolar thermal technology (CST),
continues to decrease rapidly, in linewith reductions in the cost o core
components and overall systemcost. Third, India has high levels o
irradiation.
A avorable legal ramework, largeareas o suitable land and vast
numbers o technically skilledpeople can potentially contribute
to developing, manuacturingand deploying large numbers o
power generation plants in India.This could be both grid-connected
and standalone plants over awide geographic area and using
state-o-the-art renewable powergeneration technologies. However,
the Indian solar market is verydierent rom European markets
with regards to the ability to nance
signicant investments, reliabilityo the transmission and distributionnetwork and the experience o key
players. The eective collaborationo all the stakeholders is required in
Dr. Thoas A. loisGlobal Business
Development ManagerRenewable Energy, SGS
Group Management Ltd.
order to design, nance, build and
connect signicant renewable powergeneration capacity.
What module technology is best suited
to Indian conditions?
The best technology or a solar powerplant depends critically on the specic
application and circumstances.In some cases, where the tari
structure is progressive and theability to generate revenues rom
electricity sold at peak demand isdominant, CST with thermal storage
capability has the ability to matchelectricity supply to demand. Despite
CSTs higher LCOE, it may be moreattractive to decision-makers than
PV. In the case o ground mountedinstallations and where the cost o
land is low, thin-lm PV technology isavored due to its low cost per Watt-
peak. This is in contrast with the besttechnology or small, roo-mounted,
grid-connected PV installations,dominant in many European countries.
In such cases, the cost per m2 andlimited space availability avor theuse o higher eciency crystalline
silicon PV technology. In addition tothe above mentioned considerations
(tari structure, meteorologicalconditions, availability o land, area
related cost) the choice o particularsolar power technology that is best
or a large country like India will alsorefect the uture role the country
aspires to play in the global supplychain. The question as to what solar
power generation technology bestmeets Indias needs thus cannot be
addressed rom a single point o view.It all depends on which perspective
you take.
Do you think solar PV plants in India
will perorm as per expectations?
Whether individual solar power plants
perorm as per expectations is a
matter o proessional execution. SGSprovides a range o services, such astechnical and nancial due diligence,
which are designed to assure keystakeholders (owners, investors,
lenders, regulators) that their
SGS assists in assessing investmentsin solar power generation projects
and assures the quality o solarpower plants. SGS works as an
independent global service providercarrying out consultancy, inspection,
testing, supervision, monitoring,management, verication and
certication services or concentratingsolar thermal as well as photovoltaic
projects. Our services include siteassessment, project development,
core component manuacturing,construction and operation.
We have more than 70,000 employeesand operate a network o over 1,350
oces and laboratories aroundthe world.
Tel: +49 (40) 30 10 15 74
Eai
thoas.ois@sgs.o
www.sgs.o
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success in every solar project. Project
developers can improve this bankabilityby subjecting their work to verication
by an independent proessional servicespartner. The cost o engaging such
a partner, whether by the projects
developer, investor or owner, lender orbank, or EPC contractor, will certainlybe oset by the benets gained in the
orm o securing attractive projectnancing switly.
What are the key challenges with regard
to project execution in India?
The choice o local partners, the abilityto handle administrative processes,
to obtain permits and to eectivelydeal with counterparty risk, are key
to successul project execution. Thisapplies everywhere, but specically
in ast growing markets, which otenattract new and inexperienced players.
This may be the case in emerging solarpower markets such as in India. Here,
the price sensitivity o the solar powermarket and its potential or growth not
only attract large, experienced and wellknown players but also those whosewillingness to oer the lowest price
may not be matched by their abilityto deliver and provide guarantees or
lasting solutions at the lowest cost.The challenge is or decision makers
to distinguish what appears to be alow price rom a genuine low cost oer
rom a partner with a strategicallydeendable position and resulting cost
advantage. SGS oers independentproessional services and support
throughout project execution to decisionmakers when they need to be sure.
requirements are being addressed
and perormance expectations willbe ullled. Whether solar power
can make a signicant contributionto addressing Indias growing
demand or electricity, is a more
complex question. The success opublic incentive programs designedto stimulate the adoption o solar
power technologies is oten linked tothe generation o jobs in respective
industries. Such programs requiremore than projects being diligently
planned and proessionally executed.The need is to have independent
advisors and contracted third partyservice providers to support public
and private players on key decisions.
What can project developers do to
improve the bankability o their
projects in India?
The cost o solar power generated
electricity is ront-loaded, i.e.determined largely by the cost o the
system to be built and the weightedaverage cost o capital (WACC) used
or nancing the project. The systemcost is determined by the choice o
technology, suppliers and projectpartners and their proessional
execution. The WACC is determinedby the debt to equity ratio and the
respective cost o debt and equity.The more experienced and stronger
the partners in the project, thelower the project risk and the more
attractive project nancing termswill be. The ability to secure project
nancing through loans, with longpayback times and low interest rates,
in other words bankability, is a key to
Project developers
can improve this
bankability by
subjecting their
work to verication
by an independent
proessional services
partner.
The more experiencedand stronger the
partners in the project,
the lower the project
risk and the more
attractive project
nancing terms will be.
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mr. Ravi khannaCEO, Solar Business,
Aditya Birla Group
Mr. Ravi Khanna serves as Chie
Executive Ocer o the Solar PowerBusiness o the Aditya Birla Group- a
US$35billion corporation and is basedin Mumbai, India. Prior to joining the
Aditya Birla Group, Ravi worked as
the CEO and President o Scatec SolarOslo, Norway and served as DirectorScatec AS.
Ravi has also served as Chie
Executive Ocer o Moser BaerPhotovoltaic Ltd., and PV Technologies
India Limited. In Moser Baer PV Raviwas responsible or the acquisitions
o technology rms and setting upo the technology inrastructure
while creating one o the astestmanuacturing capacities in Asia .
Ravi served as a member o the Indian
PMs solar technology mission andalso engaged very closely with MNRE,
IREDA and NORAD on development othe uture renewable and sustainable
energy platorms in India.
He has also served on the board oUS rms HelioVolt Corporation, SolFocus, Solaria and Stion Corporation.
Why has the Aditya Birla Group decided
to develop solar power projects in
India?
The Aditya Birla Group, US$40 billionpremium global corporation operating
in 36 countries, is committed tosustainable business practices and
environmental conservation.
Towards sustainable resourcemanagement and urthering the
growth o alternative energy in India,the Group has decided to participate
in the development o solar powerin India. The Group is engaged in
many power intensive sectors suchas aluminium, cement, carbon black,
VSF and chemicals. We have taken aconscious decision to voluntarily align
our energy portolio and ensure that a
sizable portion o energy comes romrenewable sources.
What are the size o projects that you
are looking to develop? Will these be
under the NSM or state policies?
We are looking at various
opportunities independent o scale.
Among small scale projects, we haveevaluated setting up decentralizedsolar power projects or community
development in and around ourindustrial townships, mining acilities
as well as or our telecom towers.We are also keen on developing
large scale projects under the gridconnected policies be it National
Solar Mission, existing or orthcomingstate policies as well as the
independent REC/RPO mechanism.
As a large business conglomerate,
you ace RPOs or your dierent
businesses. What is your strategy to
meet these obligations?
As one o the largest private
consumers and captive generatorso power, we will o course adhere to
all regulatory obligations as they aremandated in the uture. However, weare seeking to move proactively to
make sure that we can address theseobligations promptly and eciently.
In any large corporation, there willbe a mix o activities to meet the
stated target including purchase ocerticates, own generation, purchase
o renewable power and so on.
Is the solar REC market viable? Are you
looking to develop projects based on
the REC mechanism?
For a business venture a stableregulatory environment is essential.
This enables a air analysis o themarket risks to be managed. The REC
market today aces certain challenges- the key being the lack o clarity
on the enorcement o RPOs and itsimpact on the REC prices in the uture.
The regulation itsel is a well thought
out document, but due to enorcementissues businesses are slow incommitting capital on the scale that
is required. The market will remain
A US $40 billion corporation, theAditya Birla Group is in the League
o Fortune 500. It is anchored byan extraordinary orce o over
133,000 employees, belonging to 42
nationalities. The Aditya Birla Grouphas been ranked 4th in the worldand 1st in Asia Pacic in the Top
Companies or Leaders study 2011,conducted by Aon Hewitt, FortuneMagazine and RBL (a strategic HR
and leadership Advisory rm).
Over 60 per cent o the Groupsrevenues fow rom its overseas
operations. It operates in36 countries.
Tel: +91 (22) 24 99 50 00
Eai
ravi.hanna@adtabira.o
www.adtabira.o
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stunted without access to capital or
nance until the concerns relating toenorcement are addressed. Other
problems that are systemic to thepower sector such as the development
o evacuation inrastructure, intra
and interstate transer o energyand payment rom the statedistribution companies (DISCOMS)
can all be addressed in parallel aterthe resolution o the key issue o
enorcement. We, at the Aditya BirlaGroup, are keen to develop projects
under the REC/RPO mechanism bothor sale o power to our units and to
other companies that may requiresuch power as well as to supply
certicates to the exchange to helpacilitate the REC process.
What are the key actors that govern
your decision on the purchase o
modules?
The key considerations that we look
at or the purchase o modules all
under three broad heads quality,eectiveness and price. Under qualitywe look at the warranty and guarantee
conditions that the module supplierprovides, the rate o degradation and
the health o the company backingthe module. In cases where we have
limited land availability or whereland is costly, the eciency becomes
important. Under eectiveness weexplore the type o guarantee provided
whether it is linear or fat, thesize o the bankability reports o the
company providing the module and therelated balance o system costs or
that particular module. Under priceconsiderations, cost, payment terms
and delivery schedule are key.
The key considerations
that we look at or the
purchase o modulesall under three
broad heads quality,
eectiveness and price.
25
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mr. maroWirnsberger
Managing Director,
Skytron Energy
Mr. Winsbegers proessional
experience spans a period o 11 yearsin the solar photovoltaic industry. He
started his career as an R&D Engineerat Wuseltronik (predecessor company
o Skytron Energy). He has spent 4
years in the position o Sales Directorat Skytron Energy and has beenManaging Director o Skytron Energy
since 2011.
According to you, how crucial
are monitoring systems to the
perormance o PV plants in India?
Ecient monitoring and supervision isthe very backbone o a PV power plant,
i considering its 25 years o operatinglie. In India, we have to cope with a
number o adverse environmentaleects, such as high temperatures
and dust. There are local challengeslike limited inrastructure, lack
o technical experience, irregularmaintenance and the tendency to cut
corners on construction to reduce theplant costs. All these are acts that
spiral the running costs over the liecycle o the plant.
Utility-scale PV power plants consisto thousands o interconnected
components. In practice, this makesit extremely dicult to detect or
maintain system aults using manualmethods. Without a remote, real-
time and high-precision monitoringand control system, you will not be
able to pinpoint the ailure or lowperormance o a particular string
or subsection o the PV plant. Everyminute o down-time reduces the
plants yield and, in the end, cuts intothe owners return on investment.
A reliable and accurate monitoringsystem is a strong and eective tool to
secure the investment.
Monitoring and supervision systemsdetect ailures and reduced
perormance instantly, and send
alarms to the plant operator. Thisenables quick ault diagnosis whichin turn is the basis or a proper and
ecient repair and maintenancemanagement. In this way, technical
problems can be detected and
corrected immediately. In addition,
monitoring systems provide a reliableprognosis o the energy yield. This
helps plant owners or investors whohave a keen interest in monitoring
their assets and investments.
What is the response o Indian
developers to the use o monitoring
systems or projects in India?
Indian project developers are notcompletely aware yet o the real
importance o a monitoring system.They underestimate the requirement
and consider monitoring and remotesupervision as a non-essential
investment.
Quite oten, they rely on the simplemonitoring eatures provided by
inverters without considering thelong-term solution that would oer
remote supervision o several plantson a single platorm, and the added
benet o comprehensive analysisand comparison eatures. In India,
very ew project developers seemto be aware o the long term eectson energy yields o utility-scale PV
power plants that are running withouta ully integrated monitoring system.
They oten consider such monitoringsolutions as rather expensive. Yet,
they overlook the losses in thenormalized yield due to the lack
o precise monitoring. In Europe,initially, utility scale plants were
typically built without a monitoringsystem. Later, when monitoring was
made mandatory by the utilities, theseplants had to be retrotted. This is
gradually changing now as more andmore project developers are learning
rom this past experience with theiralready commissioned and retrotted
plants. However, even today somelarge-size plants are being built
without monitoring systems dueto low budgets and the pressure o
completing and commissioning these
plants on tight deadlines.
Are there a large number o companies
oering monitoring systems in India
or is the market only just beginning to
expand?
Monitoring, Control & Supervision oPhotovoltaic Power Plants - More than
2GWp worldwide rely on skytronsmonitoring solutions Our integrated
system includes: high-precisionPV string current measurement,sensorics or ambient condition
measurement, intelligent dc combinerboxes, real-time high-resolution
data logging, SCADA platorm ormulti-vendor multi-site power plant
supervision, closed-loop controlo active and reactive power by
measuring all relevant physical valuesat the grid connection point as well as
a complete lie-cycle O&M.
Skytrons monitoring conceptenables you to increase the
availability, fexibility and protabilityo your solar installation. We protect
your investments!
Tel: +49 (30) 68 83 15 90Fax: +49 (30) 68 83 15 99 9
Eai
ino@stronenerg.o
www.stronenerg.o
26
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The Indian market or monitoring
systems is picking up slowly. Manytraining programs across the country
add to the awareness o photovoltaicsystems, resulting in increasing
demand compared to the past.
Large size companies with procientengineering teams will most likelydemand high-end monitoring eatures
or their PV projects. At the sametime, the number o companies
providing monitoring solutions is alsoon the rise in India. Some o them are
starting with very little experience,whereas others quite oten collaborate
with an established solution provider.EPC companies increasingly expect
a complete package comprising boththe solar inverters and the monitoring
system monitoring. The current trendis to buy dierent components rom
dierent providers, put them togetherinto a sort o system and sell this to
the customer with cost-eectivenessalways being the crucial aspect.
There are hardly any companieswho have developed a monitoring,
control and supervision system asan integrated system solution, whichcovers all the aspects o monitoring
and control o both the DC and AC sideo the PV plant.
What are the challenges Skytron
energy has aced as a oreign company
entering the Indian market?
The Indian market is quite dierent
rom the European or Americanmarket. New PV project developers
need detailed inormation not onlyabout theproviding company, but
also about the PV technology oered.Then, ater realizing the importance
o a monitoringsystem, the Indiancustomer usually goes looking around
or a cheaper option, orgettingabout the quality, the comprehensive
unctional range and the long-termand reassuring experience that
comes with a system solution rom
our company. I am convinced, though,that only in a ew years, PV projectcompanies will ully comprehend
the important dierence between amere monitoring unction,on the one
hand, and a reliable, ully integrated
real-time remote monitoring, control
and supervision systemsolution, onthe other hand.Other concerns voiced
by PV project developers are thingslike round-the-clock service, local
manuacturing and local presence in
India.In the current scenario, low costand quick delivery are the two mainchallenges that skytron energy is
acing. Prior to our local presence, wehad high transport costs and extended
delivery due to overseas shipping andcustoms clearance time. But inspite
o this, we have already successullyinstalled and commissioned over
200MW o PV power with dierentcustomers in dierent states in
2011,and we expect at least aredoubling in 2012.
What has been the advantage in
partnering with AEG in India? How has
it helped both companies?
Local presence is essential to being
successul in the Indian market. AEGis the parent company o Skytron
Energy. This partnership has helpedus in increasing the customer baseand getting orders or monitoring
solutions. By June 2012 we willbe ready to manuacture 80% o
our monitoring equipment locallyin Bangalore where AEG already
manuactures their central inverters.This makes a huge impact on reducing
delivery time and import costs orour customers. Also, the local service
team trained or our system is crucialor us as it allows us to be close to
our Indian customers and supportthem with short reaction times and
excellent quality. In addition, AEG hasa considerable advantage over several
other competitors as it oers thecomplete solution requested by EPCs,
that is to say, they oer both, the solarinverters and the ully integrated
monitoring, control and supervisionsolutions. AEG, in turn, has beneted
rom Skytrons long-term photovoltaic
experience o more than 35 years.All this is essential or a successuland sustainable relationship with our
Indian customers.
The Indian marketor monitoring
systems is picking up
slowly. With growing
project development
volumes, the number
o experienced
technicians in the
eld o PV is steadilyincreasing.
Local presence is
essential to being
successul in theIndian market.
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mr. Jens BrgtorCSO, Director, Indo-
German Energy
Program, GIZ
Since March 2008, Mr. Jens Burgtor
is the Director o the Indo- GermanEnergy Programme (IGEN) o
GIZ Deutsche Gesellschat uerInternationale Zusammenarbeit
GmbH, i. e. German Development
Cooperation based in New Delhi.Beore joining GIZ, Jens Burgtor hasbeen Head o the Department Asset
Management Energy Production andWaste-to- Energy at City o Munich
Municipal Utilities (2004 to 2007)and worked as a reelance energy
consultant. From 2005 to 2008, hehas been member o the extended
Presidency o the German GeothermalSociety.
How do you rate the Indian solar
market in the international context?
India is with no doubt one o the mostpromising markets or solar energy
in the world. Nevertheless it will stilltake some time and eorts to become
as attractive as or instance theGerman PV market has been in the
last years.
Where do you see the role o PV and
CSP technology respectively in India?
PV is the technology o choice iyou want to invest in solar in India
today. Large on-ground PV plants arealready under construction and much
more in the planning phase. But ahugh potential still lies more or less
untouched. This is the sector o rootop mounted PV which added most
o the capacity or instance in theGerman market. I see CSP more as
a uture market as the technology asmuch larger requirements with regard
to the construction and operationo the plants. This is currently more
expensive and restricted to certainareas in India. Nevertheless CSP
should come with the option o energystorage, which could supply solar
energy on a more continuous basis.
What challenge does the lack o
irradiation data hold or bankability
o projects in India? What do you see
as possible steps to address this
challenge?
The lack o irradiation currentlyincreases the risk or the investorin solar power plants in India. I
you do not know exactly what theirradiation is at the proposed project
site the bankability o the projectaces signicant uncertainties and
a possible all o up to 30 % on theexpected power generation. The
challenge is already addressed bythe Ministry o New and Renewable
Energy, which is already installing agrid o monitoring stations all over
India. GIZ is supporting this projectand the data received will be made
public soon.Will the uture o the solar market
in India be in the on-grid or o-grid
space?
The main market will denitely be
in the on-grid sector. The electricitydemand in India is still growing veryast. Only on-grid installations will
be able to contribute to this marketsignicantly. Nevertheless there is a
huge potential or o-grid applicationsas well, be it or remote villages or
telecom towers.
When and where will solar power be
able to compete on purely commercial
terms i.e. without government support?
We already see examples where solarpower can without government
support compete or example withdiesel-generated electricity. I we
see that the price or PV moduleswill urther come down and the cost
or ossil uel on the other handwill continue to rise, it will not take
long till competitive solar power isavailable on a broader basis.
28
GIZ is a ederal enterprise, whichsupports the German Government
in achieving its objectives in theeld o international cooperation or
sustainable development.
GIZ operates in many elds: economicdevelopment and employment
promotion; governance anddemocracy; security, reconstruction,
peace building and civil conficttransormation; ood security,
health and basic education; andenvironmental protection, resource
conservation and climate changemitigation. We support our partners
with management and logisticalservices, and act as an intermediary,
balancing diverse interests insensitive contexts.
Tel: +49 61 96 79-0Fax: +49 61 96 79-11 15
Eai
ino@giz.de
www.giz.de
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mr. Jan mar RaitzDirector, Commercial
Department, PV Projects,
IBC Solar
Mr. Jan-Marc Raitz joined IBC
SOLAR AG as Director Commercial
Department PV-Projects in
January 2011. In this position he
is in charge o the teams Sales,
International Project Development,Commercial Management and Sales
Coordination within the business
unit PV-Projects. His task is to
urther develop and to strengthen
IBC SOLARs current business
internationally. Beore joining IBC
SOLAR he gathered vast experience in
the eld o renewable energies.
Is there a market or turnkey solar
solutions in India? What is IBC SOLARsstrategy or the market?
We are already considering today the
Indian PV solar market, beside our
German core market, as one o the
strongest international markets with
a substantial growth or the coming
years. We have successully executed
large scale photovoltaic power plants
last year under the National Solar
Mission Migration Scheme. With thesewe have proven our competitiveness
under demanding market conditions.
We intend to continue on this road
and strengthen our EPC capabilities
by opening our own oce in the city
o Mumbai within summer 2012. This
will give us more fexibility and control
over the so-called local content such
as civil works, substructures and
erection services. Following that,
we intend to develop our own MW
scale rootop projects or which we
oresee a bright uture in the Indian
PV market. Such projects shall be
ully developed, pre-nanced and built
under an EPC regime by us beore
we nally sell them to interested
investors, who are seeking projects on
a balance sheet nancing approach
only. We believe that our combination
o rst class German engineeringand project execution capabilities
combined with a pricing competitive in
local market conditions will be highly
accepted within the Indian PV industry.
What has been the perormance o your
plants in India so ar? Have they met
your expectations?
Yes, the plants perormances have not
only exceeded our expectations; the
expectations o our clients have beenmet by 100% or more. We are proudin receiving eedback rom the market
stating that our PV installations areamong the top perorming plants
within all o India with a perormanceratio by ar above 80%. Additionally, we
were happy to see that all installationswere grid connected in time so
that our clients were not acing thedanger o losing their initial tari. Our
compact and proven design has beenone o the key success actors or the
overall excellent perormance o thesystems. All this could be achieved
without any compromise on our IBCquality standards and philosophy.
What has been your experience in
adapting the technology and Balance o
Systems or projects in India? What are
the challenges you have aced?
It was necessary to adapt ourselves
to the Indian market environment andto be willing to learn also rom our
Indian partners and customers, whohave kindly guided us on these rst
projects within the India PV market.It would not have been wise to simply
stick to our German approach onproject execution. The openness o our
partners, customers and our team tolearn rom each other has been one
o the driving success actors. Duringthe nal installation phases we were
required to send a high number ohighly qualied engineers and site
managers to India to guarantee thatthe systems were set-up in a proper
manner and then nally guarantee ourquality.
What are the EPC and module price
developments that you expect in the
months ahead in India?
The prices will be dictated by the
market anyway, but as o today we
believe in being competitive with a
Established in 1982 in BadStaelstein, Germany, IBC SOLAR is
one o the worlds leading photovoltaicsystems integrator. Globally, IBC
SOLAR has already implementedmore than 120,000 ready-to-usephotovoltaic installations with a total
power o more than 1.7GWp. Thescope o these ranges rom large-scale power plants to on-grid and
o-grid systems that supply privateresidences. Engineering, delivery
o all components and construction(EPC) o turnkey power plants
make up the project businessescore competencies, in addition,
comprehensive consultancy services
as well as operation and maintenanceo the installations are key services.Since 2008 IBC SOLAR has
constructed several multi megawattpower plants under the NSM Policies
or leading Indian multinationalenterprises such as the
Videocon Group.
Tel: +49 95 73 92 24 51 9
Eai
janar.raitz@ibsoar.o
www.ibsoar.o
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system price o around M84.5 (1.3)
/Wp on a turnkey basis or large
scale installations. We will be in
the position to oer clients a single
source solution with product and
plant perormance guarantees. Inaddition, these will be backed by
rst-class bank guarantees. As a
result, we expect to be successul in
India. Furthermore, we intend to oer
operation and maintenance services
via our Mumbai oces. This careree
package will provide our customers
and their nanciers with the required
trust to work with IBC SOLAR as one
o the leading PV solution providers.
Importantly, we have also engaged an
Indian cell and module manuacturer
or supplying us with IBC crystalline
modules that are going to be
manuactured in accordance with our
specications and under our quality
regime. This partner will undertake
contract manuacturing or us. This
will help us to be active in projects
with local content requirement without
any compromise on plant our product
quality.
How important are o-grid, rootop PVsolutions or India? When do you think
this segment o the market will take
o?
This market segment is still in its early
stages, but can already be regarded as
the next growth segment. Large scale
rootop installations are especially
attractive to us. Nevertheless, such
projects will be a bit more complicated
in development and execution. Herewe believe we will already have the
key answers in hand due to our long-
lasting experience abroad in this
eld. O-grid solutions on a kit basis
will also become a standard the next
years. Here it will be important to
build a good distribution network or
being close to the nal customer.
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Dr. Engelmeier
Over the last two years, the cost o
solar has allen dramatically. Whilethis is a global phenomenon, India
has, through the auction process,
been able to closely mirror that dropin prices and reduced margins to abare minimum. All players along the
value chain have stretched themselvesmore than ever beore. This has
advanced the case or solar poweras it has brought it into the vicinity
o parity with other sources o powerand has strengthened the case or this
technology in India.
What is the market potential o theIndian solar industry? How realistic are
the growth projections?
Mr. Herzog
The NSM and various state policies at
present have capacity addition planso more than 20GW until 2022. While
still at an early stage with currentlyaround 1GW o installed capacity,
we believe that India is on course to
reach that target. Commercial paritywill urther boost the solar market.Our estimate is that by 2016 we willhave a total, cumulative installed
capacity o more than 12GW acrossvarious market segments. Currently,
the overall energy structure under theNSM is ocussed on larger MW-scale
power plants eeding into the grid.The captive market will take o, once
a stronger regulatory ramework withe.g. net-metering is in place.
Dr. Engelmeier
Reaching grid parity or commercial
parity is going to change the
market signicantly. This will be an
infection point, and will reset themarket potential o solar industry in
India, given Indias massive energydemand. Innovation in energy storage
technologies will bring a second
infexion point which will boost thedecentral systems urther. In theshort term, a lot will also depend on
whether the Renewable PurchaseObligations market will take o and
whether there will be a domesticcontent requirement. We have just
written reports on these topics toanalyse them in-depth.
What are the challenges or the
industry at the moment and what canbe done to overcome them?
Dr. Engelmeier
The greatest push would come roma urther de-regulation o electricity
prices. Indias electricity prices atpresent are not refecting the actual
costs o generation. A liberation othis market would have two proound
eects: it would lead to signicant
and much-needed investment intogrid-inrastructure and it would leadto a rise in power prices, thus making
solar a more attractive option.
Mr. Herzog
The Indian government should also
invest more in research. For India tobecome a global technology leader,
the ocus should be on de-centralapplications, low cost applications,
mini-grids, rural applications, andstorage. Around these challenges
and skills, a world class industry canbe ormed, with a view to replicating
Indian models internationally.
Over the last twoyears, the cost o
solar has allen
dramatically.
The Indian government
should also invest more
in research. For India
to become a global
technology leader, the
ocus should be on de-
central applications, low
cost applications, mini-
grids, rural applications,and storage.
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NSm
Gjarat
Rajasthan
karnataa
Phase
miestones
Deadine
PartiesInvoved
Deadine
PartiesInvoved
Deadine
PartiesInvoved
Deadine
PartiesInvoved
RS
RequestorSelection
X
NVVN
X
GERC
X
RRECL
X
KREDL
SubmissionoProposal
X+30days
ProjectDeveloper
notdefned
GERC,Project
Developer
X+30days
RRECL,Project
Developer
N/A
ProjectDevloper
Reselection
X+75days
NVVN
notdefned
GERC,Project
Developer
X+75days
RRECL,Project
Developer
N/A
KREDL
Seetion
AuctionProcedure
X+90days
ProjectDeveloper
N/A
N/A
X+105days
RR