Solar Rooftop Targets – Status, Opportunities &...

Solar Rooftop Targets – Status, Opportunities & Challenges

Presented by:Randeep Bora 20th July’17

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AGENDA

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2. JNNSM- Government Vision, Initiatives and Schemes

1.About CleanMax Solar

3. Rooftop Current Status, Challenges & Opportunities

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CMES – Company Overview

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o Clean Max Enviro Energy Solutions Pvt Ltd (CMES) is promoted by top industry professional(Kuldeep Jain – Ex Partner, McKinsey & Co) and backed by team of professionals having strongoperating experience in renewable energy industry

o Largest player in B2B onsite solar market (24% market share)

o 80MW of onsite plants for players including GE, Nestle, Tata Motors, Asahi Glass, SKF, TataCommunications, Tata Reality & Infrastructure, HCL, Pune University, Tata Motors, Gabriel, NBC,Manipal Group, BHU , AMU, NIT, etc.

o Strong customer recall with repeat business from its clients like SKF, Asahi, Tata Group companies,NBC, Manipal Group etc.

o Operating power plant in key industrial clusters of the country including Pune, Delhi, Chennai,Bangalore and in process of adding additional cluster such as Ahmedabad, Jaipur, Baroda &Hyderabad

o Over 120+ employee strength

o The company has PAN India presence with headquarter in Mumbai and offices in Pune, Bangalore,Gurgaon & Chennai

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Select client list of CleanMax Solar

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Enabler – Best Quality Team

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Kuldeep Jain

Founder & Managing Director

MBA from IIM Ahmedabad and a qualified CA

Prior experience as Partner at McKinsey & Company (Head of Energy and Corporate Finance in India)

Kuldeep Jain

Founder & Managing Director

MBA from IIM Ahmedabad and a qualified CA

Prior experience as Partner at McKinsey & Company (Head of Energy and Corporate Finance in India)

Nikunj Ghodawat

Finance Head

PGDBA, M.S. (Finance) and level III CFA candidate

Prior experience with Yes Bank (renewable energy advisory in Investment Banking Division)

Nikunj Ghodawat

Finance Head

PGDBA, M.S. (Finance) and level III CFA candidate

Prior experience with Yes Bank (renewable energy advisory in Investment Banking Division)

Andrew Hines

Business Development Head – South India

MBA from the University of Pennsylvania (The Wharton School) in Strategic Management

Prior experience with Suzlon and BP Alternative Energy

Andrew Hines

Business Development Head – South India

MBA from the University of Pennsylvania (The Wharton School) in Strategic Management

Prior experience with Suzlon and BP Alternative Energy

Sushant Arora

Business Development Head – West & North India

Engineering graduate from IIT Bombay

Previously worked with Milestone Ecofirst, a cleantech firm specializing in environment solutions

Sushant Arora

Business Development Head – West & North India

Engineering graduate from IIT Bombay

Previously worked with Milestone Ecofirst, a cleantech firm specializing in environment solutions

Randeep Bora

AGM - Business Development & Regulatory Affairs

Master’s degree in Energy Efficiency from University Of Petroleum & Energy Studies, Dehradun and PGDM in Financial

Management

Prior experience with Centre for Alternate Energy Research (CAER), FICCI and Mahindra Cleantech

Randeep Bora

AGM - Business Development & Regulatory Affairs

Master’s degree in Energy Efficiency from University Of Petroleum & Energy Studies, Dehradun and PGDM in Financial

Management

Prior experience with Centre for Alternate Energy Research (CAER), FICCI and Mahindra Cleantech

Indukalpa Saikia

AGM – Business Development

M.S. from University of Pertroleum and Energy Studies

9 + years of experience in solar, cleantech and carbon markets ; precviously worked with Bridge to India

Indukalpa Saikia

AGM – Business Development

M.S. from University of Pertroleum and Energy Studies

9 + years of experience in solar, cleantech and carbon markets ; precviously worked with Bridge to India

Nitai Vijay

Senior Vice President

MBA from ISB Hyderabad, Chartered Accountant

Prior experience with several equity hedge funds and KPMG

Nitai Vijay

Senior Vice President

MBA from ISB Hyderabad, Chartered Accountant

Prior experience with several equity hedge funds and KPMG

Manu Karan

Vice President – Business Development

MBA from ISB, Hyderabad, M.S. from North Carolina State University

12+ years of experience in renewable energy and semiconductor field; worked with Sun Edison, India

Manu Karan

Vice President – Business Development

MBA from ISB, Hyderabad, M.S. from North Carolina State University

12+ years of experience in renewable energy and semiconductor field; worked with Sun Edison, India

R Raja Singarayar

Senior Manager – Sales (TN & Kerala)

BE., MBA with 10+ years of experience in Renewable power project cum energy sales

Previously worked with global renewable majors Vestas, Gamesa Wind and SunEdison

R Raja Singarayar

Senior Manager – Sales (TN & Kerala)

BE., MBA with 10+ years of experience in Renewable power project cum energy sales

Previously worked with global renewable majors Vestas, Gamesa Wind and SunEdison

Umakant Shende

COO

PMP certified by PMI USA and MBA from NMIMS

25+ years of experience in operations management

Prior experience with Thermax (Solar PV Business)

Umakant Shende

COO

PMP certified by PMI USA and MBA from NMIMS

25+ years of experience in operations management

Prior experience with Thermax (Solar PV Business)

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Pan India Presence Ensures Highest Client Service, Standard & Project Management

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MumbaiHQ with finance, accounts, legal &

business development (west & north) functions

PuneHQ for EPC function

with COO office & regional office for

business development

DelhiRegional HQ – north

region business development & project management functions

BangaloreRegional HQ - south

region business development & project management functions

ChennaiRegional office for

project management & business development

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IIT-BHU (1.5 MWp)

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Manipal University, Jaipur (800 kWp)

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Aligarh Muslim University (1.5MWp)

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Asahi Glass, Taloja (1 MWp)

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GE, Pune (500 kWp)

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Gabriel, Hosur (265 kWp)

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NBC Bearings, Jaipur (500 kWp)

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AGENDA

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2. Government Vision & Current Status

3. Challenges & Opportunities

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GOVERNMENT VISION100GW by 2022

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60 GW Grid

connected projects

Total Target2010-2022

40 GW Rooftop

Solar Projects

5GWRooftop Target

2015-20179 GW

Grid connected

target

48 GW Grid

connected target

2017-202235 GW Rooftop Target

Source: Kapoor, Tarun (1 July 2015). "Scaling up of Grid Connected Solar Power Projects" (PDF). Ministry of New and Renewable Energy. Archived from the original (PDF) on February 26, 2017

Utility + Rooftop

Targets

2010-13 1-2 GW

2013-17 4-10 GW

2017-2022 20 GW

Initial targets

Revised targets

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0

2000

4000

6000

8000

10000

12000

15-16 16-17 17-18 18-19 19-20 20-21 21-22

Year-wise targets (in MW)

Rooftop Solar Ground Mount Solar Projects

• According to the year-wise targets announced by MNRE show that there is an expected rise in the growth of the rooftop solar segment.

Source: Bridge to India Solar Rooftop Map 2016 and future growth estimates

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Total solar energy installed in 2016-17 was ~5,525 MW Almost 50% more than 2015-16

Cumulative capacity reached ~12,300 MW

Fell short by ~4,700 MW of target set for FY 2016-17

CURRENT SOLAR STATUS

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CURRENT ROOFTOP SOLAR STATUS

India added 678 MW of rooftop capacity in the year 2016-17, growing at 81% Y-o-Y

Total installed rooftop capacity is approximately 1396 MW as of March 31, 2017

Capex has been the more popular model, but Opex has been gaining popularity over the last few years. Resco/Opex mode has share of around 25% and is likely to increase further

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DISTRIBUTION OF CAPACITY

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42%

21%

23%

14%

Rooftop Solar Annual Capacity Addition

INDUSTRIAL

RESIDENTIAL

COMMERCIAL

GOVERNMENT

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CURRENT MARKET SHARE

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State-wise capacity installed

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AGENDA

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3. Challenges & Opportunities

2. Government Vision & Current Status

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CHALLENGESInadequate implementation of net metering and grid integration

of renewable capacity. Restriction on size, no flexibility.

Financially unstable DISCOM’s, despite UDAY scheme.

Contract enforceability - India ranks amongst the worst in-terms of contract enforceability. This needs to improve to build

investor confidence

Lack of awareness amongst consumers about benefits available to them on adoption of solar as well as the quality of

components, in their premises.

Creating Level playing field for Solar - Timeline paymentsEnforcing quality

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India’s stretch aspiration require greater efforts to reach global averages of rooftop solar

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Rooftop volumes lag targets … … and India’s share of rooftop solar in overall solar mix is low


~ 1300

40000

15000

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

2012 - March 2017

2022 Target Industry 2022 Estimates

MWp capacity

< 10%

65%

40%35%

0%

10%

20%

30%

40%

50%

60%

70%

India Germany USA Spain

Percent, rooftop solar/total solar

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Indian rooftop market likely to see greater growth in industrial, educational and commercial segments

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18.30 18.7615.30

18.00

11.416.15 8.06

13.30

05

101520

New England New York Michigan California

Cen

ts/k

Wh

USA

Residential Industrial

Due to tariff differentials, initial rooftop solar take-off likely in educational, industrial and commercial

segments

4.465.37

3.87 3.895.30

8.206.70 6.90

02468

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Karnataka Maharashtra Tamil Nadu Gujarat

INR

/kW

h

India**

Electricity Price by Segment: India vs. USA*

* Source: EIA (USA), Individual discoms (India)** India residential rates are on a slab system; rates shown are

weighted average cost per kWh for 150 kWh consumption/month

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Targets Vs Actual projected

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• Rooftop solar is poised to grow rapidly. However, reaching 40GW looks impossible

• Currently, the growth has been triggered by industrial & commercial segment

• Unless the residential market is trapped as well, growth in tier- & tier-3 cities will not happen as expected.

• Concurrence of Central & State policies is crucial to the overall growth


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OPPORTUNITIES

Several financial

incentives and schemes made

available by GoI to

promote RTS

Provision of REC benefits to RTS projects,, strong pull in

terms of enforcing RPO

Expansion into energy storage

systems will allow for grid-parity status

by 2022

Decrease in module prices by more than 50% in 3 years

Consumers are fast adopting

and implementing solar rooftop

programs

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OPPORTUNITIES- Clients

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• Govt. allocated subsidy of INR 5000Cr for 4200MW (on opex basis) in December 2015: Of this, 3300MW is allocated for Government buildings by 2019-2020.

• SECI has already announced 1000MW with government buildings identified (revised to realistic capacity of 500MW in 9 ministries. However there are 53 ministries identified for rooftop solar, and a total of 9 PSUs (including SECI) have been identified to help the Ministries to implement the solar projects.

• Indian Railway announced 7.7 GW to be executed immediately. Over 100MW allocated. Another 200 MW under various stages of tendering

• Commercial & Industrial has huge potential. Over 2000 customer who can be still trapped for Opex/Resco model. For capex, potential is unlimited.

• Institutional customers – Entities like Amity & Manipal have taken a leap ahead and installed multiple MWs of rooftop projects. This will have a ripple effect on our institutions across the country, with several other institutions adopting the solar.

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OPPORTUNITIES- Discom’s

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Surplus Summer time power

•Universities represent large possible rooftop consumers (200 MWp already identified in govt segment). Net metering coupled with their summer holidays means that much free generation during summers for discoms – and discoms give them power during rainy/ winter seasons which is a win-win

Avoided Capex and lowered T&D

losses

•Localised generation reduces systemic T&D losses (reduced transmission and distribution requirements)

•Select capacity additions can be avoided •USA discoms saved USD 1.5 billion in avoided capex last year through solar/ storage based peak shaving

• India example: Congested IT areas (e.g. Hinjewadi, Pune/ Whitefield, Bangalore) can meet day time peak load requirements through rooftop solar

Fiscal / green compliance

benefits

•Central government financial assistance scheme for discoms providing net metering benefits to consumers launched

• In most cases, discoms can account for net metered energy in their RPO benefits

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Discoms need three key moves to accelerate net metering which is a key measure for growth of rooftop solar sector

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Make technical restrictions on net

metering cost economical

• Net metering up to 2 MWp can be allowed on LT basis (technically feasible and cost beneficial) – many states today allow net metering above 250 kWp only on HT basis

• Avoid difficult implementation requirements, such as: - All solar meters should be next to discom meter at factory gate (creates losses and costs) – can be done through remote monitoring as well

Remove artificial capacity constraints on

net metering; only technical restrictions

• Capacity allowed in net metering restricted to low values (e.g. 0.5/ 1 MWp in most states). Restrictions on capacity, if any, should be technical (e.g. allotments restricted to 40% of transformer rated capacity).

• Very large university complexes (e.g. BHU, AMU, Pune University, ShivajiUniversity) that can do 20-30 MWp of rooftop are getting constrained by this restriction

Measures for timely approval and

implementation of net metering

• Quicker implementation can be managed through: - Online/ single stop approval for net metering within 3 weeks vs. 4-6 months. In many states, no approval is granted or response provided though policy allows it. - Training for linesmen/ Discom staff through ITIs/ NPTI in how to implement net metering (today it takes over 6 months leading to commercial losses)

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THREE KEY MEASURES TO ACHIEVE 2022 TARGET

Recognise net metering as a

consumer right and measure/ enforce

accordingly

• Regard net metering as a consumer right (similar to access to electricity) and evaluate Discom’s performance (# days) on grant of application permission and also on providing net metering connection; with penalties imposed from June 2017 on failure to provide timely approval/ connection

Extra incentives for Discoms / consumers

with rooftop solar

• Incentivise consumers/ discoms with a tariff rebate (e.g. Haryana’s 25p/ kwh discount for rooftop solar generated power)

• Count all of rooftop solar power generated for self- consumption in Discoms RPO obligation (not just net metered electricity). Will bring Discom's cost of meeting RPO down dramatically (Rs. 4.5 per kwh tariff vs. free compliance)

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2

Enforce consumer friendly rooftop solar

guidelines

• Evaluate discom guidelines on net metering and benchmark to international/ other state guidelines on consumer friendliness

-Technical restrictions only, not capacity restrictions - Connectivity at LT levels

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Contact detailsMUMBAI• Sushant Arora – Head of Business Development in West India

+91-9870056580; [email protected]

Delhi/ NCR • Randeep Bora – AGM, Business Development +91-9910084922; [email protected]

BANGALORE• Andrew Hines – Head of Business Development in South India

+91-9483539660; [email protected]

CHENNAI• Dinesh Soundappa – City Head, Chennai+91-9994514689; [email protected]

PUNE• Ayush Misra – City Head, Pune +91-9769369624; [email protected]

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