Final Moha

7/27/2019 Final Moha

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PROBLEM STATEMENT

To study the prospects of renewable energy with respect to solar energy in India for State

Bank of India.


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OBJECTIVES OF THE STUDY

1. To study the economic and legal policy supporting solar energy.

2. To study the prospective states for solar energy.

3. To study the upcoming technology for solar energy.

4. To suggest measures to promote solar energy in India.


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HYPOTHESIS OF THE STUDY

1. H0:- The economic and legal policy is not supportive to solar energy.

H1:- The economic and legal policy is supportive to solar energy.

2. H0:- The adoption of solar energy in states of India is limited.

H1:- The adoption of solar energy in states of India in not limited.

3. H0:- The technology is not a major factor in financing solar energy projects.

H1:- The technology is a major factor in financing solar energy projects.


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INTRODUCTION

Our vision is to make Indias economic development energy efficient. Over a period of

time, we must pioneer a graduated shift from economic activity based on fossil fuels to

base on non-fossil fuels and from reliance on non renewable and depleting sources of

energy to renewable source of energy. In this strategy, the sun occupies center stage, as

it should, being literally original source of all energy. We will pool our scientific, technical

and managerial talents, with sufficient financial resources, to develop solar energy as

source of abundant energy to power our economy and to transform the lives of people.

Our Success in this endeavor will change the face of India. It would also enable India to

help change the destinies of people around the world.

Dr. Manmohan Singh, Prime Minister of India

Launching Indias National Action Plan on Climate Change on June 30, 2008


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1.1. RENEWABLE RESOURCES

A renewable resource is a natural resource which can replenish with the passage of time,

either through biological reproduction or other naturally recurring processes. Renewable

resources are a part of Earth's natural environment and the largest components of its

ecosphere. A positive life cycle assessment is a key indicator of a resource's sustainability. In

1962, Paul Alfred Weiss defined Renewable Resources as: "The total range of living organisms

providing man with food, fibers, drugs, etc...".[1]

Renewable resources may be the source of powerfor renewable energy. However, if the

rate at which the renewable resource is consumed exceeds its renewal rate, renewal and

sustainability will not be ensured.

The term renewable resource also describes systems like sustainable agriculture and water

resources.

[2]

Sustainable harvesting of renewable resources (i.e., maintaining a positiverenewal rate) can reduce air pollution, soil contamination, habitat destruction and land

degradation.[3]

Gasoline, coal, natural gas, diesel and other commodities derived from fossil fuels, as well as

minerals like copper and others, are non-renewable resources without a sustainable yield.

Renewable resources are an important aspect of sustainability. According to the U.S. Energy

Information Administration, the most frequently used renewable resources are biomass,

water, geothermal, wind and solar (see References 1). Unlike fossil fuels, we can regenerate

or replenish these resources. Although biomass in the form of wood once supplied 90

percent of U.S. energy needs, all renewable energy sources combined supplied only about 8
http://en.wikipedia.org/wiki/Natural_resourcehttp://en.wikipedia.org/wiki/Earthhttp://en.wikipedia.org/wiki/Natural_environmenthttp://en.wikipedia.org/wiki/Earth%27s_sphereshttp://en.wikipedia.org/wiki/Life_cycle_assessmenthttp://en.wikipedia.org/wiki/Sustainabilityhttp://en.wikipedia.org/wiki/Paul_Alfred_Weisshttp://en.wikipedia.org/wiki/Renewable_resource#cite_note-1http://en.wikipedia.org/wiki/Renewable_resource#cite_note-1http://en.wikipedia.org/wiki/Renewable_resource#cite_note-1http://en.wikipedia.org/wiki/Power_(physics)http://en.wikipedia.org/wiki/Renewable_energyhttp://en.wikipedia.org/wiki/Sustainable_agriculturehttp://en.wikipedia.org/wiki/Water_resourceshttp://en.wikipedia.org/wiki/Water_resourceshttp://en.wikipedia.org/wiki/Renewable_resource#cite_note-2http://en.wikipedia.org/wiki/Renewable_resource#cite_note-2http://en.wikipedia.org/wiki/Renewable_resource#cite_note-2http://en.wikipedia.org/wiki/Air_pollutionhttp://en.wikipedia.org/wiki/Soil_contaminationhttp://en.wikipedia.org/wiki/Habitat_destructionhttp://en.wikipedia.org/wiki/Land_degradationhttp://en.wikipedia.org/wiki/Land_degradationhttp://en.wikipedia.org/wiki/Renewable_resource#cite_note-3http://en.wikipedia.org/wiki/Renewable_resource#cite_note-3http://en.wikipedia.org/wiki/Renewable_resource#cite_note-3http://en.wikipedia.org/wiki/Gasolinehttp://en.wikipedia.org/wiki/Coalhttp://en.wikipedia.org/wiki/Natural_gashttp://en.wikipedia.org/wiki/Diesel_fuelhttp://en.wikipedia.org/wiki/Fossil_fuelhttp://en.wikipedia.org/wiki/Non-renewable_resourcehttp://en.wikipedia.org/wiki/Sustainable_yieldhttp://greenliving.nationalgeographic.com/green-energy/http://greenliving.nationalgeographic.com/green-energy/http://en.wikipedia.org/wiki/Sustainable_yieldhttp://en.wikipedia.org/wiki/Non-renewable_resourcehttp://en.wikipedia.org/wiki/Fossil_fuelhttp://en.wikipedia.org/wiki/Diesel_fuelhttp://en.wikipedia.org/wiki/Natural_gashttp://en.wikipedia.org/wiki/Coalhttp://en.wikipedia.org/wiki/Gasolinehttp://en.wikipedia.org/wiki/Renewable_resource#cite_note-3http://en.wikipedia.org/wiki/Land_degradationhttp://en.wikipedia.org/wiki/Land_degradationhttp://en.wikipedia.org/wiki/Habitat_destructionhttp://en.wikipedia.org/wiki/Soil_contaminationhttp://en.wikipedia.org/wiki/Air_pollutionhttp://en.wikipedia.org/wiki/Renewable_resource#cite_note-2http://en.wikipedia.org/wiki/Water_resourceshttp://en.wikipedia.org/wiki/Water_resourceshttp://en.wikipedia.org/wiki/Sustainable_agriculturehttp://en.wikipedia.org/wiki/Renewable_energyhttp://en.wikipedia.org/wiki/Power_(physics)http://en.wikipedia.org/wiki/Renewable_resource#cite_note-1http://en.wikipedia.org/wiki/Paul_Alfred_Weisshttp://en.wikipedia.org/wiki/Sustainabilityhttp://en.wikipedia.org/wiki/Life_cycle_assessmenthttp://en.wikipedia.org/wiki/Earth%27s_sphereshttp://en.wikipedia.org/wiki/Natural_environmenthttp://en.wikipedia.org/wiki/Earthhttp://en.wikipedia.org/wiki/Natural_resource


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percent of in 2009 (see References 1). With the rising cost and decreasing availability of

nonrenewable fossil fuels, renewable resources are receiving increasing attention

1.2. TYPES OF RENEWABLE RESOURCES

1. Hydropower

Hydropower is the capture of the energy of moving water (falling of water from one level to

another) for some useful purpose. This falling of water can be natural falling source or froma dam. The falling water is used to turn waterwheels or modern turbine blades which is used

to powering a generator to produce electricity. Hydropower system is a clean source of

energy systems that can neither be polluted nor consumed during its operation. It eliminates

the cost of fuel, making it immune to price increases for fossil fuels. As long there is a water

source (lake, river etc.) it is renewable.
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2. Solar Energy

Solar energy is the energy from the sun (in the form of heat and light) that is directly capture

and converted into thermal or electrical energy and harnessed as solar power. Solar power is

the technology of obtaining (harnessing) usable energy from the light of the sun. Some

applications of solar energy are hot water heating and space heating in the home. It is also

used in the application of solar panels where individual homes (in region where it is warm

and sunny) convert solar energy into thermal energy to generate electricity.

The use of solar energy displaces conventional energy where it results in a proportional

decrease in greenhouse gas emissions. The energy from the sun is free with just the initial

cost to set up the technology. The sun provides unlimited (renewable) supply of solar

energy. The only drawback is that its requires a large area to collect the suns radiation and

requires some means of storage.
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3. Wind Power

Wind power is the conversion of wind energy into electricity using wind turbines (usually

mounted on a tower). Wind power is used in large scale wind farms for national electrical

grids. On a small scale it is also used to provide electricity to rural residences. Wind energy is

ample, free, widely available, clean, and renewable, produces no waste or greenhouse

gases, need no fuel, good method of supplying energy to remote areas and can be a site for

tourist attraction. Wind is just moving air created as the sun heats the Earth's surface. As

long as the sun is shining, the wind remains an infinite, renewable resource. Wind power is

clean energy because wind turbines do not produce any emissions.
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4.Biomass

Biomass Fuel (Biofuels) is any organic material produced by living organisms (plants,

animals, or microorganisms) that can be burned directly as a heat source or converted into a

liquid or gas. Some examples of biomass fuels are wood, crop residues, peat, manure,

leaves, animal materials and other plant material.

There are two major sources of biomass: i. Trees, gains, sugar crops and oil-bearing plants.ii. Waste organic materials from industrial, commercial, domestic, or agricultural wastes.

Examples, crop residues, animal wastes, garbage, and human sewage.

Biomass fuels are sustainable. It is cheap and is less demanding on the environment or

Earth's resources. A major advantage of biomass fuel is its low greenhouse gas emission

characteristic where it adds less carbon to the environment when compared with burningfossil fuels. This is due to the fact that the carbon atoms released by burning biofuel already

exists as part of the carbon cycle. Biomass absorbs an equal amount of carbon in growing as

it releases when consumed as a fuel.


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Fuel diversity is another advantage of biomass, it can be transformed into fuel in many ways

such as in gasification, anaerobic digestion - fermentation of wet wastes (e.g. sugarcane or

corn to produce alcohol (ethanol) and esters, and animal dung to produce biogas) and direct

combustion - burning of dry organic wastes (e.g. wood and peat) just to name a few.

The use of biomass fuels can reduce dependence on foreign sources of oil whereby

providing energy security for the country using it as a fuel. This will therefore promote an

economic boost for both agriculture and the industry of that country. However, for it to be

economical as a fuel for electricity, the source of biomass must be located near to where it is

used for power generation.

5. Geothermal Energy

Geothermal Energy is power generated by the harnessing of heat from the interior of the

earth when it comes to (or close to) the earths surface. The regions with highest

underground temperatures are in areas with active or geologically young volcanoes. Chief

energy resources are hot dry rock, magma (molten rock), hydrothermal (water/steam from

geysers and fissures) and geo-pressure (methane-saturated water under tremendous

pressure at great depths).

There are several methods of deriving energy from the earths heat where the heat energy
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that is generated by converting hot water or steam from deep beneath the Earths surface is

converted into electricity. This hot water or steam comes from a mile or more beneath the

earth surface. Geothermal applications include:

i. Geothermal Electricity Production - generating electricity from the earth's heat. The steam

rotates a turbine that activates a generator, which produces electricity.

ii. Geothermal Direct Use - Producing heat directly from hot water within the earth.

iii. Geothermal Heat Pumps - Using the shallow ground to heat and cool buildings.


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1.3. SOLAR POWER

WHY SOLAR POWER ITS EMERGENCE

The radiation that comes from solar energy along with the resultant solar energized

resources such as wave power, wind, biomass and hydroelectricity all give an explanation

for most of the accessible renewable energy that is present on earth. However, only an

infinitesimal portion of the existing solar energy is used.

So the question of why solar energy is important, that persists in the minds of many, is

because solar energy can prove to have an immense amount of constructive and helpful

impact on you and on the environment as a whole. Contrasting to the fossil fuels that we

consume and use on a daily basis, solar energy does not fabricate the excessively injurious

pollutants that are liable for thegreenhouse effect which is known to lead to global warming.

Solar power use reduces the quantity of contamination and toxic waste, not to forget

pollution that the engendering plants have to produce. Global warming is an issue of great

interest. In the recent times, with more awareness about the harmful effects of global

warming, the issue is taken with great interest. There is in point of fact a massive belief that

the use of fossil fuel is a contributing factor to the cause of global warming, which will

ultimately result in the demise of the planet altogether. Probably the best part about why

solar energy is that it is a renewable source of energy, which basically means that it will stay

there forever, it will be consumed for all practical human usages. Oil, coal etc, is all bound to

finish one day and eradicate from the face of the planet. So why not put them in the storage

and use something more useful, is a basic question that many people have today.

Another key aspect of using solar energy is that it has massive financial benefits. They can

generally be seen in the reduction of your utility bills. As you would be consuming solar

power for the electricity that you use, the heating, the cooling and the lighting of your

environment. Statistically, in the United States, Americans are known to be consuming 25%

of the worlds oil production on a daily basis. On the whole, the planet is being drained of its
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oil resources and the energy prices are only bound to go up. To only mend your own

personal cost of energy needs is probably one of the smartest things to do and not to forget

a very valuable future investment, when measured up to the unavoidable rise in the cost of

energy in recent times as well as the not so far future. Solar energy systems are very much

affordable, and with the help from the local, state and the federal programs that are now

available to help in the installation costs, they seem to make much more sense than using

other sources of generating energy apart from the solar energy.

Conversely, if you take benefit of the law that was passed in 2005, which is mainly referred

to as the law of the net metering, you can actually end up saving on the price of the

batteries and use extra power back into the utility network, which if you ever have the need

to use it, can do so easily. This in short means that the utility corporation actually turns into

being your own personal storage facility, with absolutely no extra fund cost to your wallet.

On the global front, creating the use of solar energy seems to be one of the best options

available. The change in the climate world over is a serious threat to our planet which is

causing much of the problems. The emission levels of carbon dioxide that we generate by

the constant use of fossil fuel are literally killing our planet. The usage of solar energy will

only provide us with a clean environment, a life where we will not have to constantly worry

about the ever so reducing resources to provide us with the basic comforts of our life. With

net metering, the ever so reasonably priced solar technology and the ultimate willingness to

change this situation around, you can augment the energy competence of your home, and in

due course accomplish net zero fossil fuel expenditure and utilization. You will also save the

planet from dying out by using solar energy!


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2. SOLAR POWER

2.1. MEANING

Solar power is a renewable energy source --- a clean form of energy --- that converts the

sun's radiation into usable energy. The use of solar power helps reduce greenhouse gases,

offering an alternative to fossil fuels. Solar technology seeks to take advantage of the

strength of the energy provided by the sun. Earth receives more energy from the sun in a

single hour than the world's population uses in a full year.

The sun has produced energy in the form of heat and light since the Earth formed. Solar

energy systems do not produce emissions and are often not harmful to the environment.Thermal solar energy can heat water or buildings. Photovoltaic devices, or solar cells,

directly convert solar energy into electricity. Individual solar cells grouped into panels range

from small applications that charge calculator and watch batteries, to large systems that

power residential dwellings. PV power plants and concentrating solar powerplants are the

largest solar applications, covering acres.
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2.2. TYPES OF SOLAR POWER

Photovoltaic

Photovoltaic or PV, technology uses solar cells arrayed on panels to capture sunlight and

convert it into electricity or heat. PV technology is used for a wide range of power needs,

from small items such as calculators and watches to larger applications for satellites, homesand businesses. Traditional solar cells are made of silicon, but other materials are coming

into use as the technology develops.

Concentrated Solar Power

In large-scale uses, concentrating solar power technologies captures sunlight using

arrangements of mirrors to direct sunlight toward receivers, concentrating the sunlight and

transforming it into heat. This heat is focused on a fluid, which as it gets hot fuels a turbine

or generator that produces electricity. Concentrating solar power is capable of generating

high levels of power and is valuable for large-scale needs like providing electricity to large

populations served by municipal utilities.

Passive Solar Power

Passive solar power is a way of taking advantage of the sun's resources through theintelligent design of buildings. Passive solar power involves designing buildings so they

receive sunlight in a way that reduces the need to consume other energy resources for heat

and lighting. Strategic placement of windows so they are exposed to significant sunlight is

one common passive solar power design tactic, providing both heat and light during the
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day. Another common design feature is the use of materials in the floors and walls that

capture, store and then release heat from the sun.


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2.3. POWER STATIONS

INDIAS LARGEST PHOTOVOLTAIC [PV] POWER PLANTS

NAME OF PLANT DC PEAK POWER[MW]

NOTES

Mithapur Solar Power Plant (Tata

Power) - Mithapur, Gujarat 25

Commissioned 25 January 2012

Waa Solar Power Plant (Madhav

Power) - Surendranagar, Gujarat 10

Commissioned December 2011

DhirubhaiAmbani Solar Park,

Pokhran, Rajasthan 40

Commissioned in April 2012

Bitta Solar Power Plant (Adani

Power) - Bitta, Kutch District,

Gujarat 40

Commissioned January 2012

Azure Power - Sabarkantha,

Khadoda village, Gujarat 10

Commissioned June 2011

Moser Baer- Patan, Gujarat

30

Commissioned October 2011

Orissa - Patapur, Orissa

9

Commissioned August 2012

Green Infra Solar Energy Limited -

Rajkot, Gujarat 10

Commissioned November 2011
http://en.wikipedia.org/wiki/Mithapur_Solar_Power_Planthttp://en.wikipedia.org/wiki/Mithapurhttp://en.wikipedia.org/wiki/Gujarathttp://en.wikipedia.org/wiki/Surendranagarhttp://en.wikipedia.org/wiki/Dhirubhai_Ambani_Solar_Parkhttp://en.wikipedia.org/wiki/Bitta_Solar_Power_Planthttp://en.wikipedia.org/wiki/Adani_Powerhttp://en.wikipedia.org/wiki/Adani_Powerhttp://en.wikipedia.org/wiki/Kutch_Districthttp://en.wikipedia.org/wiki/Sabarkanthahttp://en.wikipedia.org/wiki/Moser_Baerhttp://en.wikipedia.org/wiki/Patan_districthttp://en.wikipedia.org/wiki/Orissahttp://en.wikipedia.org/wiki/Green_Infra_Limited#Operational_projectshttp://en.wikipedia.org/wiki/Rajkothttp://en.wikipedia.org/wiki/Rajkothttp://en.wikipedia.org/wiki/Green_Infra_Limited#Operational_projectshttp://en.wikipedia.org/wiki/Orissahttp://en.wikipedia.org/wiki/Patan_districthttp://en.wikipedia.org/wiki/Moser_Baerhttp://en.wikipedia.org/wiki/Sabarkanthahttp://en.wikipedia.org/wiki/Kutch_Districthttp://en.wikipedia.org/wiki/Adani_Powerhttp://en.wikipedia.org/wiki/Adani_Powerhttp://en.wikipedia.org/wiki/Bitta_Solar_Power_Planthttp://en.wikipedia.org/wiki/Dhirubhai_Ambani_Solar_Parkhttp://en.wikipedia.org/wiki/Surendranagarhttp://en.wikipedia.org/wiki/Gujarathttp://en.wikipedia.org/wiki/Mithapurhttp://en.wikipedia.org/wiki/Mithapur_Solar_Power_Plant


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2.4. SOLAR COMPANIES

Sr No Company PV Cell PV Module

1 Tata BP Solar India Ltd No Yes

2 Sun Techniques Energy Systems Pvt Ltd No Yes

3 Bharat Heavy Electricals Ltd Yes Yes

4 HHV Solar Technologies Pvt Ltd Yes Yes

5 Emmvee Toughened Glass &

Photovoltaics Pvt Ltd

No Yes

6 IComm Tele Ltd No Yes

7 Thrive Energy technologies (I) Ltd No Yes

8 Photon Energy Systems Ltd No Yes

9 Andromeda Energy Technologies (P) Ltd No Yes

10 Noble Energy Solar Technologies Ltd No Yes

11 XL Telecom & Energy Ltd No Yes

12 Sungrace Energy Solutions Pvt Ltd No Yes

13 Shurjo Energy No Yes

14 Synergy Renewable Energy No Yes

15 Sova Power Limited No Yes

16 Vikram Solar Pvt. Lt No Yes

17 Webel Solar Yes Yes

18 Ajit Solar Pvt. Limited No Yes

19 Alpex International No Yes

20 PV Power Tech No Yes

21 Green Brillinace Energy Pvt Limited No Yes

22 PLG Power Limited No Yes


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23 Access Solar Ltd. No Yes

24 Solar Semiconductors Pvt Limited No Yes

25 Titan Energy Systems Limited No Yes

26 Moser Baer Yes Yes27 Synergic India Pvt. Limited No Yes

28 Jain Irrigation Systems No Yes

29 Premier Solar Systems Pvt Ltd No Yes

30 Maharishi Solar Technology Pvt Ltd No Yes


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2.5. SPONSOR COMPANIES

NAME PRODUCTION

(MW)

MWp/2012

MWp/2011

PANEL

TECHNOLOGY

POWER RANGE

(Wp)

Sunlux Energy Ltd Polycrystalline

Aditi Solar Monocrystalline,

Polycrystalline

3

280

Ajit Solar 8 Monocrystalline,

Polycrystalline

75

280

BHELMonocrystalline

10

240

Borg EnergyPolycrystalline,

Monocrystalline

Central Electronics3

Monocrystalline10

180

Borg Energy3

Polycrystalline3

250

Central Electronics8 Monocrystalline,

Polycrystalline

3

240

Borg Energy0

Polycrystalline

3

310

Central Electronics1

Monocrystalline3

150

Borg Energy Monocrystalline, 10
http://www.enfsolar.com/directory/panel/20565/aditi-solarhttp://www.enfsolar.com/directory/panel/6063/ajit-solarhttp://www.enfsolar.com/directory/panel/2560/bhelhttp://www.enfsolar.com/directory/panel/26567/borg-energyhttp://www.enfsolar.com/directory/panel/2827/central-electronicshttp://www.enfsolar.com/directory/panel/26567/borg-energyhttp://www.enfsolar.com/directory/panel/2827/central-electronicshttp://www.enfsolar.com/directory/panel/26567/borg-energyhttp://www.enfsolar.com/directory/panel/2827/central-electronicshttp://www.enfsolar.com/directory/panel/26567/borg-energyhttp://www.enfsolar.com/directory/panel/26567/borg-energyhttp://www.enfsolar.com/directory/panel/2827/central-electronicshttp://www.enfsolar.com/directory/panel/26567/borg-energyhttp://www.enfsolar.com/directory/panel/2827/central-electronicshttp://www.enfsolar.com/directory/panel/26567/borg-energyhttp://www.enfsolar.com/directory/panel/2827/central-electronicshttp://www.enfsolar.com/directory/panel/26567/borg-energyhttp://www.enfsolar.com/directory/panel/2560/bhelhttp://www.enfsolar.com/directory/panel/6063/ajit-solarhttp://www.enfsolar.com/directory/panel/20565/aditi-solar


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Polycrystalline 300


Polycrystalline

200

315

Borg Energy 15 Polycrystalline 75225


Polycrystalline

5

285

Borg Energy10 Monocrystalline,

Polycrystalline

10

250
http://www.enfsolar.com/directory/panel/2827/central-electronicshttp://www.enfsolar.com/directory/panel/26567/borg-energyhttp://www.enfsolar.com/directory/panel/2827/central-electronicshttp://www.enfsolar.com/directory/panel/26567/borg-energyhttp://www.enfsolar.com/directory/panel/26567/borg-energyhttp://www.enfsolar.com/directory/panel/2827/central-electronicshttp://www.enfsolar.com/directory/panel/26567/borg-energyhttp://www.enfsolar.com/directory/panel/2827/central-electronics


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2.6. LOCATIONS /SITE ASSESSMENT

The site selection process aims at identifying sites suitable for the power plant. Following

issues have to be addressed during this phase inorder to achieve the expected result:

Definition of exclusion criteria and areas (environmental restrictions, military

facilities, etc)

Assessment of site conditions (Meteorology, land characteristics, land use, etc)

Infrastructure

Electricity price, production, and demand

Exclusion criteria and areas

Before evaluation potential areas seeking for optimum sites it is necessary to rule out

ineligible areas applying the exclusion criteria such as:

o Environmental restrictions (natural park, protected habitat, etc)

o Military facilities

o Areas affected by armed conflicts

o Existing human settlements

o Archeological restrictions

o Livestock

Assessment of site conditions


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The next foremost important task to be performed is the visits to the sites. Visits to the

areas identified allow determining the optimum sites suitable for installation of power plant

within the area by analyzing the following key associated factors:

o Meteorology

o Land characteristics

o Infrastructure

Meteorology

The solar energy i.e. irradiation, is the first criteria for the selection of a site since it is the

resource which will determine how much electricity can be produced. The amount of solar

radiation depends on following factors:

o Latitude

o Altitude

o Local climate and atmosphere

o Wind speed

o Extreme weathers

o Pollution

o Humidity

Land characteristics

The assessment of land characteristics depends on following factors:

o Size, shape and orientation

o Distance of shading objects

Land use

Ideally the foreseen site should not be covered by prior agricultural use. Keeping in mind the

existing restrictions regarding plant operation the condition of the site has to be


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documented during site visit. Care needs to be taken by recognizing protected trees,

agricultural use, livestock pathways, or alike, which might represent future constraints for

the project.

Infrastructure

Infrastructure includes following factors:

o Grid availability

o Access to the site

o Proximity to roads, railways, ports, cities, or airports

o Water availability

o Electrical situation in the region


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2.7. TECHNOLOGY

Solar energy is the energy derived from the sun through the form of radiation. A number of

solar thermal applications have been developed, which include water/air heating, cooking,

drying of agricultural and food products, water purification, detoxification of wastes,

cooling and refrigeration, heat for industrial processes, and electric power generation. This

technology route also includes solar architecture, which finds utility in designing and

construction of energy efficient buildings.

Photovoltaic (PV) cells have a low efficiency factor, yet power generation systems using

photovoltaic materials have the advantage of having no moving parts. PV cells find

applications in individual home rooftop systems, community streetlights, community water

pumping, and areas where the terrain makes it difficult to access the power grid.

Photovoltaic (PV) cells are placed on the rooftop of houses or commercial buildings, and

collectors such as mirrors or parabolic dishes that can move and track the sun throughout

the day. The efficiency of solar photovoltaic cells with single crystal silicon is about 13 % - 17%.

High efficiency cells with concentrators are being manufactured which can operate with low

sunlight intensities.

Types of solar cells available:

The PV cells are manufactured by hundreds of manufacturers worldwide and there areseveral different technologies available. There are three main types of commercially

available PV cells:

Mono crystalline silicon PV

Polycrystalline silicon PV


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Thin film amorphous silicon PV

At present the first two categories dominate world markets constituting 93% of it the last

one account for 4.2% of the market. There are other types of solar cells but is less in use

which includes concentrated photovoltaic, hybrid solar cells, multi junction solar cells etc.

The silicon based technologies, crystalline Silicon, multi-crystalline Silicon, amorphous silicon

are the dominant technologies at 24%, 19% and 12% efficiencies respectively at cell levels. The

efficiencies at module levels are 5-6 % lower due to variety of reasons. Most of the Indian

companies are producing at 15-17% efficiencies at cell levels and at about 12-13% at module

levels. There is scope of improvement in different technologies.

A Thin-Film Solar Cell (TFSC), also called a Thin-Film Photovoltaic Cell (TFPV), is a solar cell

that is made by depositing one or more thin layers (thin film) of photovoltaic material on asubstrate. The thickness range of such a layer is wide and varies from a few nanometers to

tens of micrometers. Many different photovoltaic materials are deposited with various

deposition methods on a variety of substrates. Thin Film Solar Cells are usually categorized

according to the photovoltaic material used. The following categories exist:

Cadmium Telluride (CdTe)

Copper indium gallium selenide (CIS or CIGS)

Dye-sensitized solar cell (DSC) Organic solar cell

Amorphous silicon (a-Si)

On an average the efficiency of thin film cells are 6-12% furthermore the thin-film PV market

is showing a spectacular annual growth rate of 126% in 2007. These thin film solar cells will be

suitable for window and facades in Building Integrated PV (BIPV) technologies.

High efficiency solar cells with concentrators:

Highest efficiency solar cells have micro morph triple junction Ge/GaAs/GaInAsP materials.

Technology is quite intricate and cost of triple junction solar is quite high. Hence, these cells

are primarily used for satellite applications. For terrestrial applications, these cells are used

in high concentration mode to reduce usage of costlier cells. Using optical reflectors, light is

concentrated from 200-500 times on 1 cm2 active area. The Sun is tracked daylong in two


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dimensions to keep the sunspot on device area. Only few companies have mastered the cell

and tracker technologies. There is need to know better and perfect the cell and tracker

technologies.

2.8. INPUT COST

Total project cost per MW is in the range of Rs.6.5 Crores-Rs.8 Crores depending on the kind

of technology being used, whether or not tracking systems are used, the kind of EPC

Contractor is chosen for power plant system etc. CERC recently announced the benchmark

tariff for setup of Solar PV and Thermal Plants in India. Heres the link to the document

containing more details: http://www.cercind.gov.in/2013/orders/SO242.pdf

The table below indicates CERC determined benchmark cost for Financial Year 2013-14.


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Central Electricity Regulatory Commission (CERC) benchmark costs for O&M is Rs.11.63

lakhs/year/MW for 2013-14 with a 5.72% increase every year. This varies from project to

project based on the number of people employed for maintenance, frequency of cleaning of

panels, onsite-engineer availability etc.Per unit production cost is dependent on how much cost you are setting up the power plant

for. Accordingly, the per unit sale cost can be set based on the expected returns.
http://i0.wp.com/efficientcarbon.com/wp-content/uploads/2013/03/CERC-bechmark-Cost-Solar-PV-2013-14.jpg


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2.9. POLICY FRAMEWORK

MINISTRY OF NEW AND RENEWABLE ENERGY

Ministry of New and Renewable Energy (MNRE) is a nodal Ministry of the Government of

India at the National level for all matters relating to new and renewable energy such as solar,

wind, biomass, small hydro, hydrogen, geothermal, etc. The endeavor of the Ministry is to

promote renewable enable technologies and increase the contribution of renewable energy


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in the total mix in the years to come. The Ministry has created testing centers to ensure

quality and standard products in the market. Besides, MNRE has created Centre for Wind

Energy technology (C-WET), Solar Energy Centre (SEC) and National Institute of Renewable

Energy (NIRE). In addition, the Ministry is supporting some Centre of Excellence in

Renewable Energy.

The Ministry has a wide range of programmes on research and development,

demonstration, and promotion of renewable energy for rural, urban, commercial, and

industrial applications as well as for grid interactive power generation. A three fold

strategy is being followed:

a) Providing support for research, development, and demonstration of technologies;

b) Facilitating institutional finance through various financial institutions;

c) Promoting private investment through fiscal investments, tax holidays, depreciation

allowance and remunerative returns for power fed into the grid.

JAWAHARLAL NEHRU NATIONAL SOLAR MISSION TOWARDS

BUILDING SOLAR INDIA

INTRODUCTION

The National Solar Mission is a major initiative of the Government of India and State

Governments to promote ecologically sustainable growth while addressing Indias energy

security challenge. It will also constitute a major contribution by India to the global effort to

meet the challenges of climate change.


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This mission is one of the eight key National Missions which compromise Indias National

Action Plan on Climate Change. It has a twin objective to contribute to Indias long term

energy security as well as its ecological security.

The objective of the Jawaharlal Nehru National Solar Mission (JNNSM) under the brand

'Solar India' is to establish India as a global leader in solar energy, by creating the policy

conditions for its diffusion across the country as quickly as possible. The Mission has set a

target of 20,000MW and stipulates implementation and achievement of the target in 3

phases (first phase upto 2012-13, second phase from 2013 to 2017 and the third phase from

2017 to 2022) for various components, including grid connected solar power.

The successful implementation of the JNNSM requires the identification of resources to

overcome the financial, investment, technology, institutional and other related barriers

which confront solar power development in India. The penetration of solar power,

therefore, requires substantial support. The policy framework of the Mission will facilitate

the process of achieving grid parity by 2022.

In order to facilitate grid connected solar power generation in the first phase, a mechanismof bundling relatively expensive solar power with power from the unallocated quota of

the Government of India (Ministry of Power) generated at NTPC coal based stations, which

is relatively cheaper, has been proposed by the Mission. This bundled power would be

sold to the Distribution Utilities at the Central Electricity Regulatory Commission (CERC)

determined prices.

The Mission also provides for NTPC's Vidyut Vyapar Nigam Ltd or NVVN to be the designated

Nodal Agency for procuring the solar power by entering into a Power Purchase Agreementor PPA with Solar Power Generation Project Developers who will be setting up Solar Projects

during the next three years, i.e., before March 2013 and are connected to the grid at a

voltage level of 33 kV and above. For each MW of installed capacity of solar power for which

a PPA is signed by NVVN, the Ministry of Power (MoP) shall allocate to NVVN an equivalent


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amount of MW capacity from the unallocated quota of NTPC coal based stations and NVVN

will supply this bundled power to the Distribution Utilities. This Scheme is referred to as

the 'Bundling Scheme' in these guidelines.

Considering the fact that some of the grid connected solar power projects were already at

an advanced stage of development, the guidelines for migration of Projects from their

respective existing arrangements to the ones envisaged under JNNSM have already been

issued by Ministry of New and Renewable Energy.

The goal to ensure large scale deployment of solar generated power for grid connected as

well as distributed and decentralized off grid provision of commercial energy services.

ROADMAPSr.

No.

Application Segment Target for Phase

1 (2010 13)

Target for Phase

2 (2013 17)

Target for Phase

3 (2017 2022)

1 Solar collectors 7 million sq

meters

15 million sq

meters

20 million

meters

2 Off grid solar applications 200 MW 1000 MW 2000 MW

3 Utility grid power,

including roof top

1000 2000 MW 4000 10000

MW

20000 MW

The objective of the Mission is to create a policy and regulatory environment which provides

an incentive structure that enables a rapid and large scale capital investment in solar

energy applications and encourages technical innovation and lowering of costs.

Although in long run, the mission would seek to establish a sector specific legal and

regulatory framework for the development of solar power, in the shorter time frame, itwould be necessary to embed the activities of the Mission within the existing framework of

the Electricity Act 2003.


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The National Tariff Policy 2006 mandates the State Electricity Regulatory Commissions

(SERC) to fix a minimum percentage of energy purchase from renewable sources of energy.

National Tariff Policy, 2006 would be modified to mandate that the State electricity

regulators fix a percentage to purchase solar power. The solar power purchase obligation

for States may start with 0.25% in the Phase 1 and to go upto 3% by 2022.

This could be complemented with solar specific Renewable Energy Certificate (REC)

mechanism to allow utilities and solar power generation companies to buy and sell

certificates to meet their solar power purchase obligations.

The Central Electricity Regulatory Commission (CERC) has issued guidelines for fixing feed-in-

tariff for purchase of solar power which will be revised on an annual basis. The CERC has also

stipulated that Power Purchase Agreement that utilities will conclude with solar power

promoters, should be for a period of 25 years.

NTPC has a wholly owned subsidiary company engaged in the business of trading of Power

NTPC Vidyut Vyapar Nigam Ltd. (NVVN).

NVVN will be designated as a nodal agency for entering into Power Purchase Agreement

(PPA) with Solar Power Developers to purchase solar power fed to 33 KV and above grid, in

accordance with the tariff and PPA duration as fixed by the Central Electricity Regulatory

Commission.

The Ministry of Power shall allocate to NVVN, equivalent megawatt capacity, from the

Central unallocated quota, from NTPC power station, at the rate notified by the CERC forbundling together with solar power.

NVVN will undertake the sale of the bundled power to State utilities at the rates determined

as per CERC regulations.


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Those State utilities will be entitled to use the solar part of the bundled power for meeting

their Renewable Purchase Obligations (RPO) under the Electricity Act, 2003.

The above arrangement will be limited to utility scale solar power generated from a

maximum anticipated capacity of 1000 MW in the first phase.

The requirement of the phase indigenization would be specified while seeking development

of solar power projects under this scheme. The tariff and tax regime for key components

and segments would be suitably fine tuned so as to promote the process of indigenization.

The Mission will encourage rooftop PV and other small solar power plants, connected toLT/11 KV grid, to replace conventional power and diesel based generators. The distribution

utility will pay the tariff determined by the State Electricity Regulatory Commission for the

metered electricity generated from such applications.

Under the Solar Mission, a normative Generation Based Incentive will be payable to the

utility and would be derived as the difference between the solar tariff determined by the

CERC for the concerned solar generation technology lees an assumed base price of Rs

5.50/kWh with 3% annual escalation.

The distribution utilities would be entitled to account such electricity generated and

consumed within the license areas of fulfillment of RPOs.

State Governments would also be encouraged t promote and establish solar generation

parks.


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2.10. GOVERNMENT INCENTIVES

THREE INCENTIVE MECHANISM

REBATES

With investment subsidies, the financial burden falls upon the taxpayer, while with

feed-in tariffs the extra cost is distributed across the utilities' customer bases. While

the investment subsidy may be simpler to administer, the main argument in favor offeed-in tariffs is the encouragement of quality. Investment subsidies are paid out as a

function of the nameplate capacity of the installed system and are independent of its

actual power yield over time, thus rewarding the overstatement of power and

tolerating poor durability and maintenance.


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FEED-IN-TARIFFS

With feed-in tariffs, the financial burden falls upon the consumer. They reward the

number of kilowatt-hours produced over a long period of time, but because the rate

is set by the authorities, it may result in perceived overpayment. The price paid per

kilowatt-hour under a feed-in tariff exceeds the price of grid electricity.

SOLAR RENEWABLE ENERGY CERTIFICATES

Alternatively, SRECs allow for a market mechanism to set the price of the solar

generated electricity subsity. In this mechanism, a renewable energy production or

consumption target is set, and the utility (more technically the Load Serving Entity) is

obliged to purchase renewable energy or face a fine (Alternative Compliance

Payment or ACP). The producer is credited for an SREC for every 1,000 kWh of

electricity produced. If the utility buys this SREC and retires it, they avoid paying the

ACP. In principle this system delivers the cheapest renewable energy, since the all

solar facilities are eligible and can be installed in the most economic locations.

Uncertainties about the future value of SRECs have led to long-term SREC contract

markets to give clarity to their prices and allow solar developers to pre-sell/hedge

their SRECs.

The price per kilowatt hour or per peak kilowatt of the FIT or investment

subsidies is only one of three factors that stimulate the installation of PV. The other

two factors are insolation (the more sunshine, the less capital is needed for a given

power output) and administrative ease of obtaining permits and contracts.
http://www.srectrade.com/srec_forwards.phphttp://www.srectrade.com/srec_forwards.phphttp://www.srectrade.com/srec_forwards.phphttp://www.srectrade.com/srec_forwards.php


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2.11. GRID PARITY AND NET METERING

GRID PARITY

Grid parity for photovoltaic (PV) technology is defined as the point where the cost of PV-

generated electricity equals the cost of electricity purchased from the grid. Achieving grid

parity is a function of many variables, including the solar resource, local electricity prices,

and various incentives. The break-even cost for photovoltaic (PV) technology is defined as

the point where the cost of PV-generated electricity equals the cost of electricity purchased

from the grid. This target has also been referred to as grid parity and may be expressed in

$/W1 of an installed system.


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NET METERING

Net metering, unlike a feed-in tariff, requires only one meter, but it must be bi-directional.

Net metering is particularly important because it can be done with no changes to standard

electricity meters, which accurately measure power in both directions and automatically

report the difference, and because it allows homeowners and businesses to generate

electricity at a different time from consumption, effectively using the grid as a giant storage

battery. As more Photovoltaics are used, ultimately additional transmission and storage will

need to be provided, normally in the form of pumped hydro-storage. With net metering,

deficits are billed each month while surpluses are rolled over to the following month. Best

practices call for perpetual rollover of kWh credits.[85] Excess credits upon termination of

service are either lost, or paid for at a rate ranging from wholesale to retail rate or above, as

can be excess annual credits. In New Jersey, annual excess credits are paid at the wholesale

rate, as are left over credits when a customer terminates service.

2.12. State wise status and opportunities in solar power generation

On the basis of solar power utilization and generation, states are categorized into four

groups: top performers, potential risers, slow movers and non-movers.

Top performers: There are four states namely Gujarat, Rajasthan, Karnataka and
http://en.wikipedia.org/wiki/Electricity_meterhttp://en.wikipedia.org/wiki/Pumped-storage_hydroelectricityhttp://en.wikipedia.org/wiki/Solar_power#cite_note-85http://en.wikipedia.org/wiki/Solar_power#cite_note-85http://en.wikipedia.org/wiki/Solar_power#cite_note-85http://en.wikipedia.org/wiki/File:Feed-in_Tariff_meter_connections.pnghttp://en.wikipedia.org/wiki/Solar_power#cite_note-85http://en.wikipedia.org/wiki/Pumped-storage_hydroelectricityhttp://en.wikipedia.org/wiki/Electricity_meter


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Maharashtra which are actively participating in solar power movement. These regions

receive a significant amount of solar radiations throughout the year which provide great

opportunity for harnessing solar power. These states have well planned solar policy (except

Maharashtra) and commissioned new solar power projects.

Potential Risers: Tamil Nadu, Andhra Pradesh, Orissa, Haryana, Uttar Pradesh, Punjab and

Uttrakhand have great potential for solar power generation and they are going to

commission solar power projects under National Solar Mission and other solar schemes.

Some of these states have drafted their own solar policy.

Slow movers: West Bengal, Manipur, Chhattisgarh, Jharkhand, Pondicherry, Delhi, Jammu

and Kashmir, Tripura, Kerala and Mizoram are at the growing stage of solar power

generation. Some solar plants are commissioned in Delhi, Jharkhand, and Chhattisgarh only.Other states also have good solar power potential but there is no development so far due to

lack of proper policy framework.

Non-Movers: There is no development in the direction of solar power generation in

Himachal Pradesh, Assam, Arunachal Pradesh, Nagaland, Sikkim, Meghalaya and Goa. They

even do not have any solar policy.

STATE POLICY

FEATURES

STATES

CAPACITYPER YEAR

ELECTRICITYDUTY

REACTIVEPOWERCHARGES

BANKINGCHARGES

CDMBENEFITS

GUJARATMinimum5 MW

Exemptedfrom payment

for sale50%exemption fordemand cut

As perGERC

order

50lakhs/MW

at the timeof PPAsigningwithDistributionLicensee

50% ofCDM

benefit

Minimum Exempted for As per 50 Benefit as


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RAJASTHAN 5 MW &Maximum10 MW

own use RERCorder

lakhs/MW perDISCOMs

order

KARNATAKA40 MW Exemption for

captive

consumptionand thirdparty salewithin state

As perKERC

order

2% bankingcharges

Benefits asper

biddingproceeds

MADHYAPRADESH

Minimum1 MW &Maximum100 MW

10 yearexemption(from COD)

As perMPERCorder

2% bankingcharges of100%energy inevery F.Y

Benefits asperMPERC

ANDHRA

PRADESH

Minimum

5 MW

Exemption for

captiveconsumptionand thirdparty salewithin state

As per

APRECregulation

2% banking

charges of100%energy inevery F.Y

Benefits as

perAPREC

2.13. ADVANTAGES AND DISADVANTAGES

Solar Energy Advantages

The power source of the sun is absolutely free.

The production of solar energy produces no pollution.

The technological advancements in solar energy systems have made them extremely

cost effective.

Most systems do not require any maintenance during their lifespan, which means you

never have to put money into them.

Most systems have a life span of 30 to 40 years.


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Most systems carry a full warranty for 20 to 30 years or more.

Unlike traditional monstrous panel systems, many modern systems are sleeker such

as Uni-Solar rolls that lay directly on the roof like regular roofing materials.

In 35 states, solar energy can be fed back to the utilities to eliminate the need for astorage system as well as eliminating or dramatically reducing your electric bills.

Solar energy systems are now designed for particular needs. For instance, you can

convert your outdoor lighting to solar. The solar cells are directly on the lights and

cant be seen by anyone. At the same time, you eliminate all costs associated with

running your outdoor lighting.

Solar Energy Disadvantages

Initial Cost: The initial cost of purchasing and installing solar panels always become the

first disadvantage when the subject of comes up. Although subsidy programs, tax

initiatives and rebate incentives are given by government to promote the use of solar

panels we are still way behind in making full and efficient use of solar energy. As new

technologies emerge, the cost of solar panels is likely to decrease and then we can see

an increase in the use of solar cells to generate electricity.


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Location: The location of solar panels is of major importance in the generation of

electricity. Areas which remains mostly cloudy and foggy will produce electricity but at

a reduced rate and may require more panels to generate enough electricity for your

home. Houses which are covered by trees, landscapes or other buildings may not besuitable enough to produce solar power.

Pollution: Most of the photovoltaic panels are made up of silicon and other toxic

metals like mercury, lead and cadmium. Pollution in the environment can also degrade

the quality and efficiency of photovoltaic cells. New innovative technologies can

overcome the worst of these effects.

Inefficiency: Since not all the light from the sun is absorbed by the solar panels

therefore most solar panels have a 40% efficiency rate which means 60% of the sunlightgets wasted and is not harnessed. New emerging technologies however have

increased the rate of efficiency of solar panels from 40 to 80% and on the downside

have increased the cost of solar panels as well.

Reliability: Unlike other renewable source which can also be operated during night,

solar panels prove to be useless during night which means you have to depend on the

local utility grid to draw power in the night. Else you can buy solar batteries to store

excess power which you can later utilize in the night. Installation area: For home users, a solar energy installation may not require huge

space but for big companies, a large area is required for the system to be efficient in

providing a source of electricity.

2.14. APPLICATION / OFF-TAKE

The potential customers of solar power installation fall into these categories:

Residential colonies: There is a strong sense of community among the residential colonies

of urban and suburban India where residents are quite likely to pool their resources together

to create a small local grid for the colony.

Business office complexes: Companies such as IBM, EMC, Intel, Pfizer, etc. have built

immense office complexes in the last 5-8 years that house thousands of employees and huge


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Solar lamps and lighting

By 2012 46,00,000 solar lanterns and 861,654 solar powered home lights have been

installed. These typically replace kerosene lamps and can be purchased for the cost of a

few months worth of kerosene through a small loan. The Ministry of New and

Renewable Energy is offering a 30% to 40% subsidy for the cost of lanterns, home lights

and small systems up to 210 WP.20 million solar lamps are expected by 2022.

Agricultural support

Solar PV water pumping systems are used for irrigation and drinking water. The majority

of the pumps are fitted with a 2003,000 watt motor that are powered with 1,800 Wp

PV array which can deliver about 140,000 liters of water per day from a total head of

10 meters. By 30 September 2006, a total of 7,068 solar PV water pumping systems had

been installed, and by March 2012, 7,771 had been installed.Solar driers are used to dry

harvests before storage.

Solar water heaters

Bangalore has the largest deployment of rooftop solar water heaters in India. These

heaters generate an energy equivalent of 200 MW.Bangalore is also the first city in the

country to put in place an incentive mechanism by providing a rebate of 50 on

monthly electricity bills for residents using roof-top thermal systems. Pune, another

city in the western part of India, has also recently made installation of solar water

heaters in new buildings mandatory.
http://en.wikipedia.org/wiki/Bangalorehttp://en.wikipedia.org/wiki/Bangalore


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Indias solar power industry began significant growth only in 2010, when the Jawaharlal

Nehru National Solar Mission (JNNSM) was announced. After the announcement of JNNSM,

grid-connected solar PV capacity increased by 165% in 2011 alone to reach 427MW. However,

a failure to address the remaining financing challenges will make the targets set under

JNNSM Phase 2 (4,000-10,000MW by 2017) and Phase 3 (20,000MW by 2022).


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FINANCIAL ASPECTS

SOURCES OF FINANCE

A variety of investors finance renewable energy projects in India, including institutions,

banks, and registered companies (Table 2-1). Institutional investors are either state-owned or

bilateral and multilateral institutions. Among banks, both private sector and public sector

banks are involved. In addition to registered companies, venture capital and private equity

investors contribute equity investment. Return expectations of the investors vary according

to the sources of their funds and the risk attached to specific projects.


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During 2006-09, Indias annual total renewable energy investment remained between USD 4

billion and USD 5 billion. Investment has risen rapidly since then, from USD 4.2 billion in 2009

to USD 12.3 billion in 2011 (Figure 2-3).

While wind continues to receive the majority of investment, solar has seen the highest

growth, and the gap between the two is falling rapidly, as shown in Figure 2-4.

Table 2-1: Renewable energy investors (number of institutions)

TYPE OFINVESTOR

CATEGORY TOTALREGISTEREDIN INDIA

ACTIVE INRENEWABLESECTOR

Commercialbanks

Public sectorbanks

26 9

Privatesector banks

30 6

Foreignbanks

37 -

Equityinvestors

Privateequity

51 16


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Venturecapital

180 21

Institutionalinvestors

Insurancefunds

24 11

DevelopmentBanks

Developmentfinancial

institutions*

3 3

DEBT - EQUITY INVESTORS

Conditions for renewable finance can be very different depending on the technology

employed, the developer, geography, or the requirements of the investors themselves. The

most important distinction is between investors in the debt markets (lenders) and those in

the equity markets (owners).

Generally speaking, debt investors are more conservative, accepting lower returns in

exchange for lower risk. As such, their primary concern is that downsides are limited; that is,

that the project does not fail. Equity investors are willing to take more risk in exchange for


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higher returns, and therefore focus equally on risk and the prospects of a project performing

even better than expected. Under most circumstances, a project will be least expensive

when it is funded by a mix of debt and equity, either at the project level, or through debt

and equity secured at the corporate level.

Renewable energy financing can become costly when either debt or equity investors

demand too high a return or when either is simply unavailable. Thus, for both debt and

equity there are two sets of questions:

Cost and terms: Are the returns investors are demanding and the conditions they are

placing on their investment so onerous as to make the project economically unattractive?

Or;

Availability: Is debt or equity just not available? That is, are there enough investors willingto invest or lend to renewable projects in India?

Significantly, while policy can influence the returns required by equity and debt investors

and the availability of either, different policies are likely to be important to different classes

of investors.

In India, the differences between debt and equity are particularly striking. In general, we find

that equity appears to be readily available at a reasonable cost, while renewable energy

debt is both limited and expensive.

To compound the problem, access to potentially lowercost international debt is limited due to regulatory barriers, the cost and risks associated

with long-term currency swaps, and perceived country risks.As a result, the cost of debt to a

renewable energy project in India will typically be in the 10-14% range, as compared to the 5-

7% range typical in the United States. Despite the higher cost, debt in India also suffers from

inferior terms, including shorter tenors and variable rather than fixed interest rates.

There are many factors that influence the total finance cost. Here are five common factors:

The cost of debtThe tenor of debt that is, the length of time over which the debt is repaid

Whether the debt is variable or fixed

Extra risk that will be taken on by equity in the event that debt rates are variable

The cost of equity, or the required return on equity (ROE)


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LENDERS

The advent of IPPs in the wind power sector has helped to establish project financing as the

new normal. Today an increasing number of domestic banks are considering renewable

energy projects on a non-recourse basis. This shift in the attitude of financiers is reflected inextended maturities and tenor of loans and lower borrowing costs.

Venture capital and private equity firms are also viewing renewables as an emerging

opportunity. Deals worth $437.3 million (~ INR 2348.30 crores) were struck during the third

quarter this year and included project finance, debt financing and venture capital funds.


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Changing market perception is also endorsed by the participation of renewable energy

generation companies in the equity market through the IPO route. For example most

recently the Indian firm Infrastructure Leasing and Financial Services announced its plans to

list its wind power business through an approximately $325-$406 million business trust IPO

in Singapore by early 2013.

Multilateral funding institutions are offering new avenues for investors in key developing

country markets as part of their climate finance obligations and broader energy strategies.

According to BNEF, development bank financing of renewable energy projects rose from

$4.5 billion in 2007 to $13.5 billion in 2010, led by multilateral development banks (MDBs)

such as the European Investment Bank, Asian Development Bank and the World Bank Group

as well as national development banks (NDBs) such as KfW Bankengruppe (Germany), ChinaDevelopment Bank and BNDES (Brazil).

Bilateral funding agencies are also extending support to wind power development across

Asia. To name a few, the United States Agency for International Development (USAID) has

been actively promoting development of renewable energy through its Market

Development for Renewable Energy programme, the Chinese Development Bank and the

KfW (German development bank) have been financing clean energy investments in various

developing countries including India.Development banks have a key role to play in mobilizing capital when and where it is needed

most. Commercial lenders, faced with global economic uncertainty and investments in

unfamiliar markets often look to development banks to share various risks, whether

perceived or real. An on-going positive dialogue between project developers,

manufacturers, political and regulatory stakeholders and public funding institutes is the way

forward to secure sustainable growth both from a financial and environmental point of

view.


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LENDING CRITERIA OF BANK

A considerable amount of work is carried out before the loan is agreed, to check that the

project is well planned and that it can actually make the necessary repayments by the

required date. This process is called due diligence, and it is carried out on behalf of the

bank. The investors will make careful consideration of technical, financial and political risks,

as well as considering how investment in a project fits in with the banks own investment

strategy. The due diligence of the project will include the following criteria:

Site assessment


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Resources available

Assessment of technology

Estimation of annual yield

Plant layout Project technical details and layout

Permits and clearances

Financial analysis

Risk assessment and mitigation of the project

Generally, a bank will not lend 100 per cent of the project value and will expect to see a cash

contribution from the borrower this is usually referred to as equity. It is typical to see 25

30 per cent equity and 7075 per cent loan (money provided by the bank as their

investment). Occasionally, a loan of 80 per cent is possible.

The size of the loan depends on the expected project revenue, although it is typical for

investors to take a cautious approach and to assume that the long-term income will be

lower than assumed for normal operation. This ensures that the loan does not immediately

run into problems in a year with poor wind conditions or other technical problems, and also

takes into account the uncertainty associated with income prediction.

The bank after considering the project viability it decides upon the revenue generation per

unit and adjusts it with the prevalent tariff rates. Another criteria of bank is if the project is

unable to generate requisite amount energy then the bank will collect the remaining amount

from the sponsorer of the project.

PROSPECTS OF SOLAR

SOLAR POWER IN INDIA

India is committed towards increasing the share of renewable power in the electricity mix to

15 per cent by the year 2020. Indian energy sector is expected to be at par with the global

stipulations on carbon emissions and sustainability through various changes in the current

set-up. The launch of Jawaharlal Nehru National Solar Mission, a joint initiative of the

Ministry of New and Renewable Energy and Ministry of Power, is one of the most important

environment friendly energy solutions available in India.


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The National Solar Mission targeting 20,000 MW grid solar Power, 2,000 MW of off-grid

capacity including 20 million solar lighting systems and 20 million square meters solar

thermal collector area by 2022 is under implementation.

Last year witnessed a significant growth in number of new initiatives in the renewable

energy sector. The wind energy sector picked up momentum by adding over 2,800 MW

capacities resulting in grid-connected renewable power capacity crossing the 22,000 MW

milestones during 2011, grid-connected solar power plants crossed the 100 MW milestones

as well. Further, over 1000 remote villages were electrified through renewable energy

systems during this year. Wind power is the fastest growing renewable energy sectors in

India. A total capacity of 15,880 MW of wind power has been installed in the country. A

capacity of around 2827 MW has been installed during 2011. Following the CentralGovernments decision to enforce the Energy Conservation Building Code in new buildings

to minimize the use of energy and recommendations to the state governments to follow the

same with suitable amendments warranted by local circumstances and requirements, the

state of Haryana has enforced the provisions of the code. The code is applicable to all

buildings and complexes having a connected load of 500 KW and more, or having a contract

demand of 600 KVA and more.

The development and deployment of renewable energy, products, and services in India isdriven by the need to

decrease dependence on energy imports

sustain accelerated deployment of renewable energy system and devices

expand cost-effective energy supply

augment energy supply to remote and deficient areas to provide normative consumption

levels to all section of the population across the country

And finally, switch fuels through new and renewable energy system/device deployment.India has one of the worlds largest programs for deployment of renewable energy products

and systems, with wind energy being one of the highest with 11087MW installed.

States with strong potential: (potential MW /installed MW


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FUTURE MARKET POTENTIAL

It is believed that Indian Photovoltaic market have huge potential. The future generation of

gadgets will mostly comprise those powered by the solar energy. Depleting non-renewableenergy resources, rising electricity bill and increasing awareness about green energy

sources, have prompted people to adopt technologies to harness the abundantly available

solar energy.


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It is clean, reliable and safe and if used skillfully, can reduce our dependency on conventional

form of energy and save money as well as environment. Today, there is a wide range of solar

devices available in the market including solar mobile phones, solar chargers, solar shaver,

solar candles, solar lamps, solar headphones, solar exhaust fans, solar heating devices, solar

energy saver etc.

India today is the worlds fourth largest economy. Its economy has grown steadily over the

last 30 years, averaging 7% annually since 2000. Electricity demand is growing at 8% annually,

similar to the growth of the economy. According to some articles, there is 92 GW electricity

demand over the next 10 years. India has a power generation capacity of about 170k MW of

which only about 8 10% is generated through renewable sources. The country has an

estimated renewable energy potential of around 85 GW from commercially exploitablesources: wind: 45 GW, small hydro: 15 GW and biomass/bio-energy: 25 GW. India has the

potential to generate 35 MW/km2 using solar photovoltaic and solar thermal energy.

The Government of India and its state governments have created a major initiative called

The National Solar Mission. One of the main features of the Mission is to make India a

global leader in solar energy and the mission envisages an installed solar generation capacity

of 20 GW by 2022. This could in fact be much larger due to private initiatives that will no

longer need state aid.

FUTURE DEMAND

There is an immense potential for solar gadgets in India, but certain hurdles prevent the rise

in their demand. Environmental awareness is a prime factor fueling the demand of solar

gadgets; however, in India this awareness is not as high as it should be. About 70 per cent of

India lives in villages with very poor or no electricity supply. The demand for solar gadgets

has increased in the past two to three years and the solar market has gained momentum.


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During the last quarter we have noticed a 25 to 30 percent rise in sales. However, this

demand has mostly come from small scale industries and villages. Although the market

potential for solar products is huge, availability of coal generated electricity at Rs. 2.80/Kwh

is the biggest hindrance for selling solar generated electricity that costs Rs 15/Kwh. It implies

that when it comes to spending money, people prefer to save rather than care for the

environment.

Based on likely predictions of growth for the next decade, the solar module demand

worldwide until is forecast as follows:

2010 2011 2012 2014 2017 2020

13.6 20.2 23.8 33 85 200

The JNNSM guidelines stipulate that the entire grid connected Solar PV plants in India

coming under the scheme will have to use Solar PV modules that are made in India.

COMPANYS PROFITABILITY

Investment opportunities:

There is a large scope for investments in solar energy sector and Government of India is

taking all the necessary measures to promote the solar energy generation in the country.

The policy measures and incentives taken by the government of India to promote

investment in solar energy sector are as follows:


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Joint Ventures: A number of companies have entered into joint ventures with leading

global PV manufacturers. There are no specific conditions laid down by MNES for the

formation of joint ventures. General conditions lay down by the Ministry of Industry,

Secretariat for Industrial Approvals and the Reserve Bank of India are applicable for this

sector.

Export-oriented Units (EOQ): It is possible to set up a manufacturing plant as a 100 percent EOU. Generally, these are permitted duty-free import of raw materials and

components. They are also eligible to sell up to 20% of their production in domestic markets.

Technology Transfer Indian PV industry is interested in seeking technology for the

manufacture of PV modules especially based on thin film materials, and is able to offer

technology for the manufacture of silicon solar cells, PV modules and PV systems. Technology Development: R&D projects are supported by the government at

Central/state government research organizations, autonomous societies, universities,

recognized colleges, IITs, industries (with suitable infrastructure for R&D) and NGOs.

CURRENT NEWS -2013

The central Electricity Regulatory Commission (cerc) has extended the validity of

renewable energy certificates (recs) from 365 days to 730 days from the date of

issuance.


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Appellate Tribunal for Electricity (APTEL), cogeneration power plants are not

required to meet RPOs, even if they generate electricity using fossil fuels.

The Union Budget 2013-14 has proposed to reintroduce the generation based

incentive scheme for wind energy projects and allocate Rs 8 bln to the Ministry of

Renewable Energy (MNRE) for the purpose.

As per the Railway Budget 2013-14 Indian Railways will set up 75 MW of windmills and

energize 1000 level crossing with solar power during the year.

The Tamil Nadu Generation and Distribution Corporation (TANGEDCO) has selected

29 firms for setting up solar power plants, aggregating 226 MW of capacity as part of

its 1 GW solar tender.

The Andhra Pradesh Government has received 294 bids aggregating 1350 MW from

184 bidders in response to its tender for setting up 1000 MW of solar power plants.

Rajasthan Renewable Energy Corporation Limited (RRECL) has received bids

aggregating 185 MW from 23 qualified bidders.

Indore based M and B Switch Gears Ltd became first solar power developer in India

to be issued Solar Renewable Energy Certificate by the National Load Dispatch centre

(NDLC) on May24,2012.

For renewable energy there is increase in budget 15.34 bln (13-14) as compared to

11.63 bln (12-13)

The Kerala government has formally launched its 10000 Solar Rooftop Power Plants

Programme 2012-13.

Refex Energy commissioned two large-scale grid-connected solar PV plants with a

total installed capacity of 20 MW in Bikaner district of Rajasthan, on February 25,

2013.

Azure Power has commissioned 35 MW of solar power capacity in Kathauti village on

Nagpur, Rajasthan, under Batch II of the JNNSM Phase I, ahead of the commissioning

deadline.

The Madhya Pradesh Government has earmarked 1000 acres of land in Neemuch

district to set up Indias biggest solar power plant of 130 MW.


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Kiran Energy has commissioned three solar PV projects, aggregating 55MW, at Rawra

village in Jodhpur district of Rajasthan under Batch II of the JNNSM. L&T and

Mahindra EPC were the engineering, procurement and construction contractors for

the project, which is expected to produce about 90000MWh of electricity per year,

thereby reducing carbon emissions of about 80000 tonnes annually. Apart from this,

the company is also building clusters of solar projects in several states including

Maharashtra, Gujarat, Karnataka, Rajasthan and Tamil Nadu, with capacities ranging

from 50 MW to 100MW.

Domestic and International lenders are looking to invest in the sector, which is

expected to witness a capacity addition of 30 GW during the 12 th plan period (2012-

17). As per conservatives estimates, about $600 mln of foreign direct investments are

estimated to have come into the Indian Renewable Energy sector 2012-13 ($467.07

mln has already come in during the nine-month period ended December 2012).

The Punjab Energy Development Agency has invited requests for proposal for setting

up 300 MW of solar photovoltaic projects under the first phase of the states New

and Renewable Sources of Energy Policy,2012

Uttar Pradesh has issued a tender for 200 MW of solar PV capacity, following the

finalization of its solar policy, which aims at installing 500 MW of capacity in the state

by March 2017.

The Maharashtra State Power Generation Company has proposed a performance-

linked revenue sharing model for setting up solar projects, under which developers

would build, operate and maintain a solar power plant on a quasi-ownership basis.

The Solar Energy Corporation of India has selected three solar power companies

SunEdison, Thermax and Azure Power to set up rooftop solar power projects inBengaluru, Chennai, Delhi and Gurgaon.

NTPC has commissioned two solar power projects in the Andaman and Nicobar Island

and Dadri (Uttar Pradesh), with a capacity of 5MW each.


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State-owned common salt manufacturing firm Hindustan Salts Ltd is looking to

partner with Bharat Heavy Electricals Ltd for installing a 2500 MW solar generation

integrated plant in Rajasthan.

The Ministry of New and Renewable Energy has directed telecom operators to use

solar power to energize at least 50000 towers on an immediate basis.

The ADB has agreed to provide $2 mln of equity to Simpa Networks for helping the

latter scale up the sales of its off-grid-pay-as-you-go solar energy solutions in India.

Mytrah Energy Ltd has agreed to conditional terms for acquiring 59.75 MW of

existing and operational wind power assets in Maharashtra and Tamil Nadu.

MEL has secured funds aggregating Rs 11 bln from the State Bank of India, PTC India

Financial Services Ltd and a consortium of senior debt providers.

Developer Planned Capacity Addition(MW)

Mytrah Energy India Ltd 5,000.0

NTPC 1,025.0

Indian Energy Ltd 1000.0

Welspun Energy Ltd 850.0

Greenko Energies Private Ltd 665.0

RS India Wind Energy Ltd 500.0

Inox Renewables Ltd 400.0

Tata Power Company Ltd 388.0

Beta Wind Farm Private Ltd 300.0

Suryachakra Green Power Pvt Ltd 300.0

Gujarat State Petroleum Corporation Ltd 200.0

Reliance Wind Energy Ltd 200.0

CLP India Pvt Ltd 163.2

CAPACITY ADDITION PLANS OF KEY PLAYERS UPTO 2018


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Gamesa Wind Turbines Pvt Ltd 160.0

Indowind Energy Ltd 128.0

Green Infra Ltd 125.0

GAIL (India) Ltd 115.0Oil and Natural Gas Corporation 102.0

NHDC Limited 100.0

TEECL (Simran Wind Project Pvt Ltd) 100.0

Others 1,065.6

Total 12,886.8

Source: Centre for Monitoring India Economy; Renewable Watch Research

Azure Power has expanded the capacity of its existing 5 MW plant in Nagpur,

Rajasthan by 35 MW, becoming the largest solar power capacities to be

commissioned at a single location under the JNNSM.

The Economy Energy Connect

Even after the global economic meltdown, India registered a GDP growth of 6.5% in 2011-12.

Though modest, compared to its blockbuster performance of 8.4% in the previous two years,

it is still respectable, given the dire economic breakdown in developed countries. Growth

forecast for GDP for 2012-13 has been put at 6.7%, by the Economic Advisory Council to Prime


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Minister, in their report of August 2012. Planning Commission has estimated that during XII

Five Year plan period (2012-13to 2016-17), for a GDP growth of 9% per year, energy supply hasto grow at 6.5% per year. The ability to meet the energy requirement will depend upon

Indias ability to expand domestic production in the critical subsectors such as petroleum,

natural gas and coal, and meeting the balance requirement through imports.

Drivers for Energy Demand

Indias per capita energy consumption has grown at CAGR of 3.44% during 1970-71 to 2010-

11.At the current level of 4816 KWH (2010-11), this is lowest amongst all major developing

economies in the world. Though this can be partly attributed to the service oriented nature

of Indian economy, the per capita energy consumption is low even when compared to

countries such as Brazil, Argentina and Mexico that have a GDP composition similar to thatof India. The fact that India is dominated by a rural population at 69%, which largely depends

on non commercial sources to meet its energy needs also contributes to the low recorded

per capita energy consumption. As per 2011 Census data, percentage of rural households

using firewood, crop residue and cow dung as primary cooking fuel are 62.5%, 12.3% and

10.9%, respectively. Percentage ofhouseholds owning 2 wheelers and 4 wheelers is 21% and4.7%, respectively. Only 47.2% households use televisions. As this segment of India, otherwise

known as bottom of the pyramid moves towards urbanization with higher disposable

income for better standard of living, the energy demand is set to go up significantly. Energy

Development Index (EDI), devised by International Energy Agency (IEA), value for India has

declined from 0.295 in 2007 to 0.294 in 2011. In the last decade, while Indias GDP and

primary energy consumption have grown at a CAGR of 7.6% and 6.6%, respectively, its energy

intensity has decreased by -0.23% over 1970-71 to 2010-11 and is currently at 0.1167 KWH per

rupee, very low as compared to its peer countries. The ability of India to grow at such

attractive levels of energy intensity is laudable; albeit it is consistently driven by energy

deprivation. If India is to service the ambition of providing employment to growing

employable demographic constituents and maintain social harmony, an increase in energy

intensity is perhaps unavoidable.


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METHODOLOGY

The method of collection of data was through the Detailed Project Report given by mentor,

various periodicals of Renewable Watch of 2012 2013. Research reports of various

researchers etc.


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CONCLUSION

The future of renewable energy in India is limitless. Indias leadership in the clean energy

program is scaling new heights which is supported and facilitated by economic & legal

policy. Although, the renewable energy scenario in India is in nascent stage; the trend keeps

growing. The existing laws and policies have made it easier for this sector to flourish. A


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developed India fuelled on solar power will be a model state for the world community.

Howsoever, a dedicated uniform policy like that of Gujarat for the solar power generation

can really help in harnessing solar energy at massive scale. Majority states in India receive a

considerable amount of solar radiation; therefore there is a scope for tapping solar energy

at the commercial level. Thus, there is a need to have a uniform national policy for the

setting up of solar power plants in India.

The energy sector in India can face challenges and gain prospects by fostering technological

innovations in collaboration with global partners. Conditions required are: a) regulatory

environment in energy sectors, including coordination and synergy amongst ministries of

the federal government and b) investment climate including capital market regulation. The

third requirement is people aspect of innovation. Innovation fosters best in a diverse workenvironment where people with different background and viewpoints mix, but Indian

energy industries have been slow to recognize this need for diversity. A survey by the Global

Energy management Institute indicated that bringing leadership from outside the energy

sector will provide fresh perspectives and can help resolve the issues facin

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