Intersolar India ConferenceNovember 11th, 2013

FROM NSM TO GRID PARITY MODELS:

FEED-BACK FROM EXPERIENCE

SOLAIREDIRECT, GLOBAL PIONEER OF COMPETITIVE SOLAR POWER ENGINEERING AND GENERATION

2006: foundation of Solairedirect

2013: in the global top 10 solar power companies with 400 MW in operation/construction and 2 000 MW under development

Innovative integrated business model designed to cut costs and risks : project development, design and EPC, structured financing and legal engineering, O&M, power sales and grid services

Mission: making solar power competitive with other sources of energy

Public/private partnerships and local content manufacturing

Innovative approach in engaging communities

Presence across 5 continents

Competitive bidder in government tenders and PPAs in France, India, South Africa, Chile and the US with prices down to less than 6 Rs/kWh

Revenues of 126 M€ and net profit of 10 M€ (2012) with 250 employees

700 M€ raised in equity and project finance

SOLAIREDIRECT INDIA: SETTING THE STANDARDS IN COMPETITIVENESS AND DOMESTIC CONTENT

Competitive solar power generation

December 2011: best bidder in the NSM with a 7.49 Rs/kWh bid June 2013: selected in Punjab tender (20 MW)

Domestic content manufacturing

First projects (Pokaran, 16 MW) with cells, modules and inverters 100% made in India

Official recognition

Inauguration by his Excellency Dr. Farooq Abdullah in June 2013

Innovative offers and business models

Private PPAs, hybrid power offers…

FEEDBACK FROM EXPERIENCE: HIGHLIGHTS AND CHALLENGES

HIGHLIGHTS

Record timing for development, construction, grid connection and debt financing

December 2011: selection of Solairedirect India as the best bidder in the NSM auction

April 2012: securing of land and conversion June 2012: procurement of locally manufactured electrical systems

(Schneider Electric), cells and modules (PV, crystalline silicon) August 2012: launch of construction of double 16 MW project by

Solairedirect teams January 2013: completion of grid transmission line February 2013: commissioning of the solar park March 2013: closing of non recourse debt financing with State Bank of

India

Optimal quality standards (joint Indian/European approach)

Record EPC costing (especially BOS)

CHALLENGES

Availability of proper evacuation capacity

Availability/affordability of land in certain states (Punjab)

Maturity of equity markets (matching the risk/return profile of solar generation assets)

BEYOND GOVERNMENT TENDERS: INDIA’S POWER DEFICIT AS A CHANCE TO LEAPFROG

Solar power generation still minuscule in India

Only 1.7 GW installed at FYE 2013 (1.5% of world capacity, 0.2% of India’s total power generation)

Present industry focus: government tenders

NSM Phase 2 (750 MW), state programs (with mixed experience such as in Gujarat, Tamil Nadu…)

The real opportunity: India’s growing power deficit

Compelling case for an abundant, competitive, quick-to-deploy energy source, displacing imports (diesel…)

How to unlock this extraordinarily huge potential?

At around 6 Rs/kWh (escalated), everything becomes possible if…

Global power shortfall(in GW, exc. OECD and China, source: Aggreko)

THE PATH TO GRID PARITY: DEVELOPING NEW BUSINESS MODELS, OVERCOMING CHALLENGES

DEVELOPING NEW BUSINESS MODELS

PPAs with large power users: private (cement, steel, manufacturing, retailers…) or public (municipalities, townships, business parks, utilities…)

Trading on power markets (electricity and RECs)

Energy services (hybrid power offers, rooftop leasing, demand response, mini-grids, smart grids…)

Solar IPP and/or service provider, third-party financing

OVERCOMING CHALLENGES

Competitiveness versus otherwise subsidized energies

Load profile matching

Bankability of revenue models and counterparties

Access to land and power evacuation

Open access regulation and terms