India Solar Market September 2019 An Overview · Energy, and Data Centers, Kehua covers over 13% of...
Transcript of India Solar Market September 2019 An Overview · Energy, and Data Centers, Kehua covers over 13% of...
India Solar Market – September 2019
An Overview
Research provided by
Gold Partners
©2019 Mercom Capital Group, llc. ALL RIGHTS RESERVED. I www.mercomindia.com I [email protected]
Index
Executive Summary………………………………………………………………………………………………..………………………………...….……… 4
Current Solar Market – Installations, Pipeline…………………………..…………..…………………………………………………………..……………. 5
Policy Drivers…………………………………………………………………………………………………………….………...…………………….……… 8
Tenders & Auctions…………………………………………………………………………………………………..…………….…………….…….…..…… 13
Share of Solar…………………………………………………………………..…………….……………..…………..…………..…………..…………..…… 16
Project Development by State……………………………………………………………………………..…………………………………………………… 19
Solar Trade…………………………………………………………………..………………….………………………………………………………...……... 22
Rooftop Solar……………………………………………………………………………………………………………..……………….…………………….. 24
Market Leaders…………………………………………………………………………………………………………………………………...……………… 26
Solar Market Outlook……………………………………………………………………….……………………..…………………..………………………… 28
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Executive Summary
• Indian solar market added ~3.2 GW of solar in 1H 2019, with cumulative solar installations crossing 31.5 GW as of Q2 2019. Mercom India Research
forecasts India to install over 8 GW of solar capacity in the calendar year 2019. The report estimates solar installations in India to reach approximately 70
GW by the end of 2022 based on current market dynamics. The solar project pipeline in India is now approximately 22.3 GW, according to Mercom’s India
Solar Project Tracker. Currently, about 37.4 GW of tendered projects are awaiting auction.
• By the end of Jun 2019, utility scale solar projects accounted for 88% of the total solar installed capacity with ~27.8 GW and solar rooftop accounted for
12% with ~3.8 GW installed capacity.
• In 1H 2019, ~30 GW of solar PV projects were tendered by state and government agencies, according to tender tracker. Over 7.3 GW of solar PV projects
were auctioned during 1H of 2019. Even though there were plenty of tenders issued in the country, tariff caps have added a new challenge for developers.
Developers are reluctant to bid at the levels prescribed by state agencies instead of a market-based auction in which the lowest bid wins. This has caused
several developers to refrain from participating in these auctions, and several auctions have been undersubscribed recently.
• Renewable energy (including large-hydro) now accounts for over 35% of the total power installed capacity in India, with solar comprising nearly 8.7% as of
Jun 2019. Within renewables, solar accounted for ~25% of the installed capacity.
• Karnataka is the top state for solar PV installations with over 6 GW of cumulative installed capacity as of Q2 2019. The state accounts for 22% of the total
installed solar capacity in the country.
• In Q2 2019, the Indian solar sector received investments to the tune of $1.85 billion (~₹132.66 billion).
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Current Solar Market – Installations, Pipeline
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India Solar Cumulative Installations By Policy (MW)
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0
1,000
2,000
3,000
4,000
All India Cumulative Utility-scale Solar Installations By Policy Type (MW)
Cumulative Large-Scale Solar Installations ~27.8 GW
Source: Mercom India Research (Jun 2019)
©2019 Mercom Capital Group, llc. ALL RIGHTS RESERVED. I www.mercomindia.com I [email protected]
India Solar Project Pipeline By Policy (MW)
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0
5,000
10,000
15,000
20,000
25,000
30,000
India Utility-scale Solar Project Pipeline (MW)
Projects Tendered, Pending Auctions (~34.4 GW)
Projects Under Development (~22.3 GW)
Source: Mercom India Research (Jun 2019)
Policy Drivers
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Policy Updates
❑ DISCOMs Mandated to Maintain Letter of Credit as a Payment Security Mechanism to Buy Power – The Minister for Power and New & Renewable
Energy (MNRE) announced the approval of a proposal to make it mandatory for distribution licensees to open and maintain an adequate Letter of Credit
(LoC) as a payment security mechanism under power purchase agreements. Power generators in India have battled the challenge of delayed or non-
payments by distribution companies (DISCOMS) for decades.
❑ Draft Guidelines for Grouping Solar PV Inverters for Testing in Labs - MNRE issued draft guidelines for series approval (grouping) of solar PV inverters
to conduct testing in labs for the implementation of “Quality Control Order on Solar PV Systems, Devices and Components Goods 2017.” These guidelines
are applicable for solar PV based off-grid, grid-tied, and hybrid inverters of capacities up to 150 kW. This draft guideline is specific to testing approval of
‘series’ of products instead of approving each product model individually. This was a sticking point as there was no clarity when the original order was
issued and manufacturers complained that getting approval for individual models was expensive, cumbersome and caused delays.
❑ MNRE Orders Setting Up of Dispute Resolution Committee for Solar and Wind Sectors - MNRE issued an order to establish a system to resolve
disputes between solar and wind energy developers and the Solar Energy Corporation of India (SECI) and National Thermal Power Corporation (NTPC).
The Dispute Resolution Committee (DRC) will be handling cases pertaining mostly to time request extensions along with various other common issues.
These would be cases wherein time extension decisions by SECI are challenged based on contract terms.
❑ CERC Finalized the Fifth Amendment to its Deviation Settlement Mechanism Regulations – The Central Electricity Regulatory Commission (CERC)
issued its fifth amendment to the deviation settlement regulations which include two new clauses: a daily base deviation sett lement mechanism (DSM) and
a time block DSM. The commission has provided relief to generators through exemption from additional charges.
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❑ CERC Issued Draft Regulations for Power System Development Fund - CERC issued draft regulations for the Power System Development Fund (PSDF).
The National Load Despatch Center will be the nodal agency for the implementation of the projects or schemes under these regulations. The fund is to be
utilized to fund projects or programs for the creation of necessary infrastructure, necessary transmission systems of strategic importance based on operational
feedback by load despatch centers for relieving congestion in the interstate transmission system and intrastate systems which are incidental to the ISTS. The
PSDF will be maintained and operated through the public account of India.
❑ PGCIL Proposes Blueprint for Solar and Wind Power Evacuation from Western Region – The Power Grid Corporation of India Limited (PGCIL), came up
with a proposal to establish a transmission system for the evacuation of power from potential solar and wind energy zones in the country’s western region. The
proposal is to develop the transmission infrastructure in two phases. A total of 20 GW of solar and 9 GW of wind projects have been planned in Phase-I (up to
December 2020), and 30 GW of solar and 7.5 GW of wind are planned for Phase-II (December 2021).
❑ MNRE Asks Developers to Use Robotics for Efficient Use of Water in Solar Projects - The MNRE issued a letter recommending the efficient utilization of
water for cleaning utility-scale solar projects. The ministry noted that the project developers are currently using too much water for cleaning solar modules, and
they should try and minimize wastage and recommends the use of robotic cleaning technology, which uses less water for cleaning solar projects.
❑ Clarification on Import Conditions for Lead-Acid Batteries Used in Solar Projects - MNRE issued guidelines for the import of secondary cells and
batteries of lead-acid and nickel-based chemistries that are utilized in solar project development. It clarifies that secondary cells and batteries of lead-acid or
nickel-based chemistry type, are covered under the Indian Standard (IS) 16270 for storage batteries that are used in solar projects. The ministry has also
issued draft guidelines for performance testing of batteries (lead-acid and nickel-based chemistry type) series approval for mandatory registration with the
Bureau of Indian Standards (BIS).
Policy Updates
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Challenges Faced By Industry
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Availability of
Financing
Landand
Transmission
PPA Renegotiations and
CurtailmentTariff Caps Payment Delays
©2019 Mercom Capital Group, llc. ALL RIGHTS RESERVED. I www.mercomindia.com I [email protected]
Case for Solar in India
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StrongGovernment
Support for Solar
Transition to Renewables is
Happening Now
Large Domestic Market
Solar Cheaper than Coal in the
Country
Top 3Solar Market
Globally
Tenders and Auctions
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Solar Tender & Auction Activity in 1H 2019
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• In 1H 2019, approximately 30 GW of solar projects
were tendered by state and government agencies.
• Over 7.3 GW of solar PV projects were auctioned
during the period Jan-Jun of 2019.
• Even though there were plenty of tenders issued in
the country, tariff caps have added a new
challenge for developers. Developers are reluctant
to bid at the levels prescribed by state agencies
instead of a market-based auction in which the
lowest bid wins. This has caused several
developers to refrain from participating in these
auctions, and several auctions have been
undersubscribed recently.
• In the interim, we may continue to see auctions
getting postponed and tariff caps adjusted multiple
times until they are viable enough for developers to
bid.
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
Jan-19 Feb-19 Mar-19 Apr-19 May-19 Jun-19
India Solar Tenders and Auctions in 1H 2019 (Jan-Jun)
Tenders (MW)
Auctions (MW)
Source: Mercom India Solar Tender Tracker
©2019 Mercom Capital Group, llc. ALL RIGHTS RESERVED. I www.mercomindia.com I [email protected]
Solar Bidding Trends
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2.8
7
2.5
4
2.5
0
3.0
2
2.0
2.5
3.0
3.5
4.0
4.5
5.0
5.5
NSM
PII
B2
(Kar
)-A
pr
16
NSM
PII
B2
(Tel
anga
na)
-May
16
Jhar
khan
d-M
ay 1
6
Kar
nat
aka
P-V
(G
en)-
May
16
NSM
PII
B2
(Raj
)-Ju
l 16
Rew
a So
lar
Pro
ject
(M
P)
- Fe
b 1
7
NSM
PII
B2,
Kad
apa
(AP
) -
Ap
r 17
NSM
PII
B4,
Bh
adla
P4
(R
aj)
- M
ay 1
7
NSM
PII
B4,
Bh
adla
P3
(R
aj)
- M
ay 1
7
GU
VN
L (G
uj)
- S
ep 1
7
NSM
PII
B4,
Bh
adla
P3
, T X
I (R
aj)
- D
ec 1
7
NSM
PII
B4,
Bh
adla
P4
, T X
II (R
aj)
- D
ec 1
7
KR
EDL
P-V
I Tal
ukw
ise
(Kar
) -
Feb
18
KR
EDL,
Pav
agad
a P
ark
(Kar
) -
Mar
18
NTP
C, A
nan
thap
ura
m S
ola
r P
ark
(AP
) -
May
18
MSE
DC
L (M
ah)-
May
18
SEC
I, P
avag
ada
Sola
r P
ark
(Kar
) -
May
18
Mah
agen
co A
G F
eed
er
(Mah
) -
May
18
AP
DC
L (A
ssam
) -
May
18
KR
EDL,
Pav
agad
a So
lar
Par
k (K
ar)
- Ju
n 1
8
SEC
I, IS
TS (
Acr
oss
Ind
ia)
- Ju
l 18
SEC
I, K
adap
a So
lar
Par
k (A
P)
- Ju
l 18
SEC
I, IS
TS -
II (
Acr
oss
Ind
ia)
- Ju
l 18
GR
IDC
O (
Od
ish
a) -
Ju
l 18
NTP
C, I
STS
(Acr
oss
Ind
ia)
- A
ug
18
GU
VN
L P
II (
Gu
j) -
Sep
18
UP
NED
A (
UP
) -
Oct
18
KR
EDL
Talu
kwis
e (K
ar)
- O
ct 1
8
KR
EDL
Pav
agad
a So
lar
Par
k (K
ar)
- O
ct 1
8
SEC
I Flo
atin
g So
lar
(UP
) -
No
v 1
8
UP
NED
A (
UP
) -
Dec
18
MSE
DC
L, P
2 (M
ah)
- Fe
b 1
9
GU
VN
L P
IV (
Gu
j) -
Feb
19
SEC
I, IS
TS -
III (
Acr
oss
Ind
ia)
- Fe
b 1
9
SEC
I, (R
ajas
than
) -
Mar
19
GU
VN
L, R
agh
anes
da
Par
k, P
III-
R (
Gu
j) -
May
19
GU
VN
L, D
ho
lera
So
lar
Par
k, P
-V (
Gu
j) -
May
19
SEC
I, D
on
dai
cha
Sola
r P
ark
(Mah
) -
May
19
SEC
I, IS
TS -
IV (
Acr
oss
Ind
ia)
- Ju
n 1
9
SEC
I, T-
II (R
ajas
than
) -
Jun
19
UP
NED
A (
UP
) -
Jun
19
2016-17 2017-18 2018-19 2019-20
Low
Tar
iff/
Bid
s (₹
/kW
h) Low Tariff (₹/kWh)
Source: Mercom India Research (Jun 2019)
Lowest Solar Bids in Reverse Auctions in India (₹/kWh)
Safeguard Duty Imposition
Share of Solar
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Solar Accounts for 51% of New Power Capacity Additions in 2018
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27.5%
14.0%
50.7%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2010 2011 2012 2013 2014 2015 2016 2017 2018
Shar
e o
f N
ew C
apci
ty A
dd
itio
ns
%
Other Renewables
Small Hydro
Solar Power
Wind Power
Hydro
Nuclear
Gas
Coal
Share of New Power Capacity Additions in India (2010-2018)Solar and Wind account for ~65% of New Power Capacity Additions in 2018
Source: Mercom India Research (Jun 2019)Data from CEA, MNRE, Mercom India Solar Project Tracker
©2019 Mercom Capital Group, llc. ALL RIGHTS RESERVED. I www.mercomindia.com I [email protected] - 18 -
Solar Makes Up ~8.7% of India’s Total Installed Energy Capacity
Coal53.9%
Gas6.9%
Nuclear1.9%
Lignite1.7%
Diesel0.2%
Large Hydro 12.6%
Wind Power 10.1%
Solar Power 8.7%
Bio-Power 2.7%
Small Hydro 1.3%Waste to Power 0.04%
Renewable Energy35.4%
India - Cumulative Installed Power Capacity Mix (%)Renewables (including Large Hydro) comprise over 35% of India's total installed capacity, with solar accounting for ~8.7%. Among renewables, solar accounts for ~25% of the installed capacity
Source: Mercom India ResearchData from CEA, MNRE, Mercom India Solar Project Tracker (Installed Capacity as on 30 Jun 2019)
• Renewable energy sources (including
large hydro) accounted for ~35.4% of the
India’s power capacity mix at the end of
Jun 2019.
• Cumulative solar installations at the end of
June 2019 reached 31.5 GW, representing
8.73% of the total power capacity in India.
• Among the renewables, solar accounted
for approximately 25% of the installed
capacity.
• India added a total power capacity of
around 8 GW in the first half of 2019.
Solar and wind accounted for 56% of the
new power capacity added during the
period.
Project Development by State
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India Solar Cumulative Installations By State (MW)
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0 2,000 4,000 6,000 8,000
PuducherryAssam
LakshadweepJammu & Kashmir
Arunachal PradeshGoa
TripuraAndaman & Nicobar
Dadra and Nagar HaveliChandigarh
Himachal PradeshDaman and Diu
New DelhiJharkhand
HaryanaWest Bengal
KeralaBihar
ChhattisgarhUttarakhand
OdishaPunjab
Uttar PradeshMaharashtra
Madhya PradeshGujarat
Tamil NaduAndhra Pradesh
TelanganaRajasthanKarnataka
<20 MW
20-100 MW
100-1,000 MW
1,000-2,500 MW
2,500-5,000 MW
Source: Mercom India Research (Jun 2019)
India Utility-scale Cumulative Solar Installations by States (MW)
Cumulative installed large-scale solar capacity now
stands at ~27.8 GW
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Solar Project Development Pipeline By State (MW)
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0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000
Haryana
Andaman & Nicobar
Kerala
Punjab
West Bengal
Odisha
Assam
Telangana
Madhya Pradesh
Tamil Nadu
Uttar Pradesh
Andhra Pradesh
Gujarat
Karnataka
Rajasthan
Maharashtra
Across India
Source: Mercom India Research (Jun 2019)
Large-scale Solar Project Development Pipeline by State (MW)
Solar projects under development pipeline total about 22.3 GW
Solar Trade
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Import-Export Trends in the Indian Solar Market
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• Solar modules and cells worth $399 million (~₹27.75 billion) were imported by India in Q2 2019, a steep decline of 39% when compared with ~$650 million (~₹45.80
billion) of solar cells and modules that were imported by India in Q1 2019. YoY, the solar imports also decreased by 9% in comparison to Q2 2018.
• In Q2 2019, India exported solar cells and modules worth $34.8 million (~₹2.42 billion), a 4% rise when compared to the previous quarter. In Q1 2019, India had exported
solar cells and modules worth $33.3 million (~₹2.34 billion).
China
Vietnam
Thailand
Singapore
Taiwan
Hong Kong
Others
Country-wise Breakdown of Indian Solar Imports (%)Q2 2019 (Apr-Jun 2019)
Data from Department of Commerce
USA
Belgium
South Africa
Somalia
UAE
Korea
Spain
Oman
Others
Country-wise Breakdown of Indian Solar Exports (%)Q2 2019 (Apr-Jun 2019)
Source: Mercom India Research
Rooftop Solar
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Rooftop Solar Installation Growth
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• Rooftop solar installations increased slightly in Q2
2019 with 292 MW, when compared to 263 MW of
rooftop solar projects added in Q1 2019.
• India needs to accelerate the growth of its rooftop
solar segment compared to large-scale solar.
• Cumulative solar rooftop installations in India
totaled ~3.8 GW as of June 2019. Rooftop
installations still only make up 12% of total solar
installations in the country.
• Most of the growth in the rooftop segment is
currently coming from C&I market.
• Mercom forecasts around 1 GW of rooftop solar
capacity to be added by the end of 2019, primarily
due to the disruption and slowdown caused by
general elections, financing challenges, and net-
metering issues.
0
100
200
300
400
500
Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19
Rooftop Solar Installations by Quarter (MW)
Source: Mercom India Research (Jun 2019)
Market Leaders
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Indian Solar Market Leaders
Indian Solar Market Leaders 2018
© 2019 by Mercom Capital Group, LLC. All Rights Reserved.Source: Mercom India Solar Market Share Tracker
Solar Market Outlook
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India’s Solar Installation Outlook
-29-
6 12 177
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
50,000
0
2,000
4,000
6,000
8,000
10,000
12,000
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019F 2020F
Cu
mu
lati
ve In
stal
lati
on
s (M
W)
An
nu
al In
stal
lati
on
s (M
W)
Annual Rooftop Solar Installations (MW)
Annual Utility-scale Solar Installations (MW)
Cumulative Solar Installations (MW)
Source: Mercom India Research (Jun 2019)
India Solar Demand Forecast (MW)
4,313
9,782
8,338
2,313
9851,044998
Note: 'F' represents forecast
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About Mercom India
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Mercom Communications India (Mercom India) is the go-to source for information and insight into India’s cleantech industry. A subsidiary of U.S.-based Mercom Capital Group – a global clean energy communications and consulting firm – Mercom India is widely recognized for its leadership and influence in helping to shape India’s rapidly growing clean energy sector.
For clean energy organizations looking to expand market influence or eyeing initial entry into India’s renewable energy industry, Mercom India provides invaluable research, news, consultation, and communications services.
www.MercomIndia.com
@MercomIndia
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Contact Us
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