The India Solar Handbook

7/30/2019 The India Solar Handbook

1/44 BRIDGE TO INDIA, 2012

BRIDGE TO INDIA, 2012Illustration by Dwarka Nath Sinha

The IndiaSoar

HandbooJne 2012 edition

A complete industry overview

or solar energy in India

With spport ro:



The IndiaSoar

HandbooJne 2012 edition

A complete industry overview

or solar energy in India



BRIDGE TO INDIA

THE INDIA SOlARHANDBOOk

June 2012 edition

2012 BRIDGE TO INDIA Energ Pvt. ltd.

A rights reserved

Jne 2012, New Dehi

No part o the INDIA SOLAR HANDBOOK

may be used or reproduced in any manneror in any orm or by any means without

mentioning its original source.

BRIDGE TO INDIA is not herein engagedin rendering proessional advice and

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to the ownership, accuracy, or adequacyo the content o this product. BRIDGE TO

INDIA shall not be liable or any indirect,incidental, consequential, or punitive

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the theory o liability.

For urther enquiries, please contact:[email protected]

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DISclAImER

cover Istration

Dwarka Nath Sinha

Design & laot

Manasi Lamba

To sponsor

the November 2012 edition othe INDIA SOlAR HANDBOOk,

contactNehat kar

[email protected]



The PV market opportunity in IndiaInternationa poi oparison

Soar irradiation in India

Indian soar poiies

Nonpoi projet aoations

Renewabe Prhase Obigations

REc ehanis

Deand growth and projetions

The PV manuacturing industry in IndiaStats

Doesti ontent reqireent

maret opportnit or oreign anatrers

PV anatring oreast

InterviewsDr. Thoas A. lois, SGS Grop manageent

mr. Ravi khanna, Adita Bira Grop

mr. maro Winsberger, Stron Energ

mr. Jens Brgtor, GIZ

mr. Jan mar Raitz, IBc Soar

mr. Oiver Herzog and Dr. Tobias Engeeier,

BRIDGE TO INDIA

Annexure

cONTENTS

01

03

05

08

12

12

15

19

20

20

21

22

24

26

28

29

31

33



THE PV mARkETOPPORTuNITy

IN INDIAINTERNATIONAl

POlIcycOmPARISON

In the initial, Feed-in-Tari (FiT)driven phase o the global PV market,

European countries, especiallyGermany, Spain and Italy, have taken

the lead. The concept o compulsoryconsumption quotas o renewable

energy (RPOs) has also rst beenintroduced in Europe. Both market

instruments have subsequently beenreplicated and urther developed by

other countries across the world.

As the solar PV industry entersinto its second phase o nearing

commercial parity with other energysources - new markets, with new

policy support and high irradiationlevels are increasingly coming into

ocus.

matre marets

The PV market in these countries

is based on two main drivers: theircommitment to reduce their carbon

ootprint and their desire to reduce thedependency on imported ossil uel.

The average solar irradiation levels

tend to be lower in these countries.

The introduction o highly attractiveFiTs and the maturing o the industryhave contributed to large-scale

capacity additions in these markets.

The current economic slowdown inmany European countries, especially

Spain and Italy, has contributed to asignicant reduction o FiTs, making

these markets less attractive. Also,with large capacities o solar power

already installed, the growth in these

markets has been declining or thepast ew years. As a result, the PVindustry is now engaging with new

markets that oer opportunities oruture growth and give them a more

diversied portolio o market risks.

New marets

Many new markets like India, Australiaor South Arica have the advantage o

high solar irradiation. Their current

installed capacities are still negligibleas compared to the mature markets.

Growth o solar power in thesemarkets has been initiated by new

government initiatives through FiTsand Renewable Purchase Obligations

(RPOs).

Fndaenta Driver

Irradiation

Wh/2/

per da

long Ter

Energ

Defit

FiT per Wh RPO capita

Sbsid

matre arets

caiornia uS

Geran

5.2

2.7

No

No

~M10 (0.15)

~M09 (0.14)

Yes

No

Tax credit

Yes

Ita 3.3 No ~M11 (0.17) Yes Yes

Spain 3.7 No ~M11 (0.17) Yes Yes

New marets

India 5.5 Yes (High) M08 (0.12) Yes Yes

Soth Aria 5.2 Yes M11 (0.17) Yes Yes

Astraia 5.5 No M12 (0.18) Yes Yes

Ontariocanada 3.1 No M16 (0.25)* No Yes

Source: REN 21 Global Status Report, BRIDGE TO INDIA analysis*For projects less than 10MW

The current economic

slowdown in many

European countries,

especially Spain and

Italy, has contributed to

a signicant reduction

o FiTs, making

these markets less

attractive.

01


7/44 BRIDGE TO INDIA, 2012 02

Soth Aria has high solar resources

and is an upcoming market orsolar. The country has opted to buy

alternate energy rom private playersto alleviate their energy constraints.

So ar, 1,450MW o solar PV and

200MW o CSP has been allocatedby the government. This allocationhas been done under two windows.

Recently, nine solar PV projectstotaling 417MW and one 50MW CSP

project have been allocated underthe second window. An additional

401.47MW is still to be allocated.

Astraia has some o the highestaverage solar irradiation levels in

the world and has a competitive,open electricity market. The remote

locations in Australia, which oer thebest solar resource, however, oten

lack grid and road inrastructure. TheAustralian solar market is dominated

by rootop installations. There areover 500,000 solar PV installations on

Australian homes and schools.

Ontario (Canada) is a ast emergingsolar market with an expectedinstalled solar PV capacity o

2,800MW by 2015. The capacity

addition is mainly driven by the FiT

policy. The FiT policy was introducedin 2009 but is only applicable or

projects less than 10MW. The tarioered or ground mounted solar PV

project is around M16 (O 0.24)/kWh,

which is one o the highest in theworld. The market potential or largesolar PV projects without government

support is low.

India, with liberal policies or thepower sector, a high potential or

solar power and a variety o centraland state-level incentive schemes

presents a particularly goodopportunity or the solar industry.

The market is supported by FiTs toprovide an initial thrust. Further, by

introducing the Renewable EnergyCerticate (REC) mechanism and

RPOs, the government is keento create demand-driven market

or solar power in India. Reverse-bidding auctions in some programs

have signicantly reduced the FiTs,aecting the protability o projects. In

the long-term, however, solar power isa key strategic choice or this energy-strapped, large and high growth

economy.

India, with liberalized

policies or the power

sector, a high potential

or solar power and a

variety o central and

state-level incentive

systems, presents

a particularly goodopportunity or the

solar industry.

Mature markets

New markets

cAlIFORNIA



SOlARIRRADIATION ININDIA

03


9/44 BRIDGE TO INDIA, 2012 04



INDIAN SOlARPOlIcIES

Nationa Soar mission

Since its launch in 2009, the NationalSolar Mission (NSM) has been the

key-driver o the growth o the Indiansolar industry. It targets installations

o 20GW o grid-connected solarpower generation, 2GW o o-grid

applications, 20m sq. meters o solarthermal collector area or industrial

applications and 20m solar lightingsystems or rural areas by the year

2022. The mission aims to achieve

these objectives through internationalnance, technology transer anddomestic manuacturing, as well as

through the implementation o RPOsand by preerential taris.

In the rst o its three phases,

rom 2010 to 2013, the governmentannounced the broad policy

ramework to achieve the objectiveso the NSM by 2022. This ramework

incentivizes the construction o

1,000MW o grid-connected powerplants, encouraging the moredeveloped PV technology as well as

CSP equally with 500MW each1.

The rst batch o projects under

phase one o the NSM was oeredin autumn 2010. As many as 333

project developers had put orwardbids worth 1,815MW or 150MW o PV

projects. Due to the over-subscription

o the projects, a competitive, reverse

bidding process was initiated or the

allocation o the projects. This processhas since been made the norm or

project allocations under the NSM.Based on this, developers that oered

the highest discount on the initial tari

o M17.91 (0.27)/kWh were awardedthe projects. As a result, taris ellby around 30% to an average o M12

(0.18)/kWh. From the rst batch oallocations, 125MW o PV was installed

and commissioned as o May 2012and an additional 20MW is expected to

come up in the months ahead.

Project allocations or batch two ophase one o the NSM were made

in early December 2011. For this, acapacity o 350MW o PV was allocated

and PPAs were signed or 340MW inJanuary 2012. In this batch, due to

competitive bidding, the taris ell bya urther 30% to an average tari oM8.2 (0.12)/kWh. The deadline or thecompletion o these projects is

March 2013.

The NSM has also introduced theconcept o bundling, where the

government (through the state-ownedpower trading company NVVN) willbuy the high cost solar power rom

developers and then bundle it with un-allocated low cost thermal power rom

the ederally owned power generatorNTPC. This power will then be sold at

an average cost o around M4 (0.06)/kWh to the state utilities.

In order to reduce the payment deault

risks inherent in Power Purchase

Bnding o soar power

Each ederal power generatorsuch as NTPC has to sell 90%

o its generated power to statedistribution companies (DISCOMS)

as mandated by the government.The other 10% is termed as un-

allocated power which can be sold

by NTPC through NVVN in the openmarket.

Currently NTPC has 6,000MW ounallocated power, which can be

bundled with as much solar powerrom projects under the NSM. It

bundles the power at a ratio o 4units o existing power to 1 unit o

solar power.

THE INDIA SOlARcOmPASSAs part o Market Intelligence

at BRIDGE TO INDIA, we provide

comprehensive, analytical and up-to-

date research on the Indian market

to our customers through the INDIA

SOLAR COMPASS our quarterly

solar market report. The INDIA

SOLAR COMPASS covers all latest

developments on the key market

undamentals o policy, projects,

nancing and the upstream industry

and oers insights on the direction

o the market.

The India Solar Compass is an

essential tool or all companies and

investors engaging with the Indian

solar market. Subscribers include

some o the leading international

solar companies, such as Bosch,

IBC, Siemens and Samsung.

The July 2012 edition o the INDIA

SOLAR COMPASS

content

I. Indias Soar maret

Overview and Latest Market

Developments

Status o the States

Focus on Resale o PPAs in Gujarat

Industry Developments

Challenges and Outlook

II. Indepth Epert Interview

III. ke Qestion Answered

What is the uture o the Domestic

Content Requirement in India?

To purchase our reports or subscribe

to the India Solar Compass, please

visit the Reports section on www.

bridgetoindia.o or send an email

to [email protected]

05

1 MNRE National Solar Mission, Guidelines or New Grid Connected Solar Power Projects, July 2010

INDIASOlAR

cOmPASSJ 2012 Edition

A Brie Otine

BRIDGETO INDIA,2012Photograph courtesy Istock photo

maret DashboardA snapshot o the markets

undamentals

latest maret InsightsAn analysis o the policies,

projects, industry and fnance

A ke Qestion AnsweredWhat is the uture o the Domestic

Content Requirement in India?

OtooQuarterly projections or the

Indian solar PV market



* Approximate - actual tari could vary rom project to project

PV @ K12.5 per kWh

COAL+PV @ K4.5 per kWh

Bnding o soar power

06

Agreements (PPAs) with the nanciallyweak State Electricity Boards (SEBs),

the ederal government later approveda Payment Security Scheme worthM4.86 billion (74m) or projects under

phase one o the NSM. The scheme isimplemented by the Ministry o New

and Renewable Energy (MNRE), whichwill allocate the unds to the NVVN

through a Solar Payment SecurityAccount (SPSA).

Gjarat Soar PoiThe state o Gujarat was the rst Indian

state to launch its own solar policy in2009. The current policy is operative

until 2014 but a new policy is expectedbeore it ends. The initial target was

to achieve an installed capacity o500MW. Given the interest rom a

large number o developers and anassumption that some projects may

not be implemented, the government

allocated projects worth 958.5MWo PV. Most projects were delayedand only about 132MW o PV met the

original commissioning deadline o

December 31st 2011. A capacity o654.81MW o PV has been installed as

o May 2012.

The Gujarat Solar Policy is the only

policy, which has awarded projectswith a xed FiT, unlike the NSM.

Land acquisition, availability ogrid inrastructure and nancial

closure have proved to be the biggestchallenges in project execution

in Gujarat. Only about 14% o theallocated capacity had come online by

the scheduled deadline o December31st 2011. Thereater, a new tari

regime was applied to projects tobe commissioned ater January 28th

2012. These taris are lower thanthose under the rst two phases o the

Gujarat solar policy.

Due to delays in project execution,some developers ailed to notiy

the Gujarat Energy TransmissionCorporation Limited (GETCO) to

provide or grid connectivity on time.Though these projects were installed

beore the deadline o January 28th2012, they could not be commissioned.



The state authorities allowed orthese projects to be considered

as provisionally commissioned,exempting them rom the new and

lower tari regime. A total o 604.9MWo PV projects were given ocial

commissioning certicates in April2012 during the inauguration o the

Charanka Solar Park in Patan districto Gujarat. As o May 2012, 654.81MW

has been commissioned in Gujarat.Gujarat is a power surplus state

and does not need to allocate more

projects this year to meet its RPOrequirements. In spite o this, certainstate ocials have communicated

publicly that Gujarat will continueto promote solar power. Developers

are now awaiting new phase threeallocations in Gujarat, expected orall o 2012. More than a 1,000MW

worth o projects have pre-registeredwith the government or any uture

allocations.

Rajasthan Soar PoiThe Rajasthan Solar Policy, launched

in July 2011, has a long-term targeto 12GW o installed solar power in

the state by 2022. It aims to achieve200MW by 2013 and an additional

400MW by 2017, split equallybetween PV and CSP projects, or

the direct sale o power to the statesdistribution companies. In addition, it

aims to achieve 50MW o rootop andsmall scale PV installations by 2013.

Projects will be awarded through aprocess o competitive bidding.

Gjarat taris or the new ontro period starting Jan 29th 2012

*The levelized tari is not applicable or MW scale projects; only applicable or kilowatt scale projects

Proposed Tari in M/Wh 12 ears 13 earsl eveized*l

megawatt Sae PV Projets

kiowatt Sae PV Projets

Soar Thera Projets

NA

11.25

With AD

Without AD

With AD

Without AD

With AD

Without AD

9.98 (9.28)

(10.37)

11.14

12.44

(11.55)

(12.91)

7.00

7.50

The submission o the Requestor Selection (RS) or plants was

expected to take place by February2012 but the process has been delayed

indenitely. According to the RSdocument, the competitive bidding

or the 250MW worth o projects willinclude 50 rootop projects o 1MW

each, 100MW o Solar PV and 100MWworth o CSP projects. Plant sizes will

be a minimum o 5MW and maximumo 10MW or PV and a maximum o

50MW or CSP.

The Rajasthan Solar Policy hasincorporated some lessons romorerunners like the NSM and the

Gujarat Solar Policy. It does not havethe 5MW limit on individual PV projects

which made the NSM less attractive tolarge players but, unlike the Gujaratpolicy, it has placed xed limits o

61MW on the total capacity allocationto encourage competition among

developers. The policy also addresses

the concerns o developers with regardto the allocation o land and water,availability o a transmission network

and the localized supply chain.

The policy promotes domesticmanuacturing by providing incentives

or developers with manuacturingacilities in Rajasthan. PV projects

worth 200MW have been plannedor allotment to developers planning

to build manuacturing acilities inRajasthan. These projects are required

to use the modules manuactured in-house. These projects have yet to be

made available or allocations.

BRIDGE TO INDIA, 2012Source: BRIDGE TO INDIA

07



Due to its high irradiation levels and

availability o space, Rajasthan willlikely become the hub o solar power

generation in India. Under NSMphase one batch one, out o 145MW

o solar PV projects selected, 70% are

in Rajasthan. Under phase one batchtwo o the NSM the state has alreadyattracted around 60% o the bids or

projects and is likely to attract moredevelopers under its state policy.

karnataa Soar PoiKarnataka announced its solar policy

in July 2011 and targets 350MW oprojects by 2016. The state had called

or bids or 80MW worth o projectslast year. The winning bids were

announced with a delay due to a legalcomplication (reer to BRIDGE TO

INDIAs April 2012 edition o the IndiaSolar Compass). Due to the delay in

announcements, the developers weregiven a chance to re-submit their bids.

The results were then announced inApril 2012 and 60MW o solar PV and

20MW o solar thermal was allocated.The lowest bid, which stood at M7.94

(0.12)/kWh, was submitted by HelenaPower Private Limited (allotted 10MW

PV) and the highest successul bidat M8.50 (0.13)/KWh was submitted

by Welspun Solar AP Private Limited(allotted 7MW PV). The policy has no

domestic content requirement.

NON-POlIcyPROJEcT

AllOcATIONSOdishaThe Indian state o Odisha (ormerlyOrissa) has allocated projects without

a state specic solar policy in place toulll the RPO. The Odisha Renewable

Energy Development Agency (OREDA)oered ve solar PV projects worth

5MW each through a competitivebidding process in December 2011.

A single bidder was allowed to bid

or only one 5MW project. Ater the

determination o the L1 price (thelowest quoted selling price in M per

kWh o electricity) the successulbidder had the option to take the

additional our projects (each o 5MW)at the L1 price. To avail this option, the

bidder would have to show a net worthequal to ve times o the net worth

that was required or a single projecto 5MW. The aggregate net worth

required or being selected or all veunits (a total o 25MW) was M700m

(10.8m). The potential to obtain all25MW has driven companies to bid

very aggressively. The bid results wereannounced on February 7th 2012.

A record M7 (0.1)/kWh rom AlexGreen Energy has been the lowestbid and they have taken up all o the

25MW allocated.

madha PradeshMadhya Pradesh came out with atender to allocate 200MW o solar PV

projects through a reverse biddingprocess on December 14th 2011.

This allocation was not guided by a

comprehensive solar policy. MadhyaPradesh received bids totalling 430MWrom twelve developers. Out o the

proposed 200MW only 125MW hasbeen allocated and 75MW has been

reserved or previously signed MoUs.Alpha Inra emerged as the lowest

bidder quoting a tari o M7.90/kWh(0.121/kWh) or a 20MW project.

Welspun quoted M8.05/kWh (0.124/kWh) or two projects o 50MW each

and one project o 25MW. Welspunwas nally allocated 105MW capacity.

These were the only two developersthat were allocated projects. List

o bidders who were not allocatedprojects included ACME, Azure,

Simplex Inra, Sai Sudheer, ArjunGreen Power, ESSEL Inra and IL&FS.

08



Poi Target Projetaotentethod

FiT ProjetSizes

Doestiontentgideine

Epetedinstaedapaitb 2013

NSm 500MW by2013 Reversecompetitivebidding

AverageFiT or rstbatch:M12.5(0.19)per kWhFor secondbatch: M8.20(0.12) perkWh

Batch 1:5MWBatch 2:Min: 5Max: 20MW

Yes (cellsand mod-ules)Exception:Thin-lmmodules

480MW

Gjarat 500MW by2014

Fixed FiT onrst comebasis

M15 (0.23)per kWh orthe rst 12years andM5 (0.07)per kWh or

the next13years. Newtari ordelayedprojects

Min 5MW;Max no cap

No 700MW

Rajasthan 300MW by2013

Reversecompetitivebidding

Biddingprocess or150MW PVindenitelydelayed

Min: 1MWMax: 61MW

No.Exception:200MWprojectsor modulemanuactur-ers

250MW

karnataa 126MW by

2013

Reverse

competitivebidding

Bidding

results an-nounced or80MW

Min: 3MW

Max: 10MW

No 80MW


Poi projet aotents

Poi Target Projetaotentethod

FiT ProjetSizes

Doestiontentgideine

Epetedinstaedapaitb 2013

Odisha 50MW an-nounced;25MWallocated

Reversebidding

FiT or sin-gle 25MWallocation:M7 (0.1)/kWh

Min: 5MWMax: 25MW

No 25MW

madhaPradesh

200MWannouncedand al-located

Reversebidding

AverageFiT: M9.5(0.14)/kWh

Min: 5MWMax: no cap

YesException:Thin-lmmodules

55MW

Projet aotents b states withot a soar poi

09



STATE SOlAR POlIcy STATuSPPAs

SIGNED

FINANcIAlclOSuRE/

cONSTRucTIONcOmmISSIONED

PV PROJEcTS

GuJARAT

RAJASTHAN

kARNATAkA

mADHyA PRADESH

ODISHA

mAHARASHTRA

TAmIl NADu

ANDHRA PRADESH

HARyANA

uTTAR PRADESH

State Solar Policy under executionPhase 1: deadline Dec. 2010

Phase 2: deadline Dec. 2011

Phase 3: To be announced by end o 2011

State Solar Policy announced in April 2011

Base FiTs announced.

Bidding results expected by August 2012

(150MW to be allotted)

State Solar Policy announced in July 2011

Allocations announced in April 2012

(60MW solar PV and 20MW solar thermal)

Deadline or commissioning October 2013

Allocation through reverse bidding. Not

guided by policy.

Deadline or commissioning is Jun 2013

or projects up to 25MW and June 2014 or

projects greater than 25MW

Allocation through reverse bidding. Notguided by policy.

Deadline or commissioning is August

2013

Broad Renewable Energy Policy, No policy

specic to solar energy

State Solar Policy likely to be released

soon

Direct agreements likely

Memorandum signed with welspun or

a 100MW project

Broad renewable energy policy, No policyspecic to solar energy

No state solar policy

968.5MW

105MW

295MW

36MW

12MW

5MW

100MW

10MW

6MW

60MW

200MW

5.25MW

5MW8MW

25MW

5MW

25MW

11.2MW

5MW

153MW

5MW

7MW

5MW

15MW

20MW

10.5MW

100MW

2MW

8.8MW

5MW

8MW

50MW

235 MW

5.25MW

5MW

20MW

150MW

5MW

5MW

5MW

20MW

0.75MW

1MW

654.81MW

105MW

0MW

35MW

12MW

5MW

40MW

10MW

6MW

0MW

2MW

5MW8MW

11.2MW

5MW

3MW

2MW

2MW

10MW

9.75MW

2MW

7.8MW

2MW

2MW

State Policy

NSM batch I

NSM batch II

Migration

projects

RPSSGP

GBI

Direct RPO

NSM batch I

GBI

State Policy

State

allocations

RPSSGP

REC

Mechanism

NSM batch IRPSSGP

State

allocations

NSM batch I

NSM batch II

Migration

projects

RPSSGP

Direct RPO

NSM batch I

RPSSGP

GBI

NSM batch I

NSM batch II

RPSSGP

Direct

Agreement

GBI

RPSSGP

NSM batch I

RPSSGP

TOPPERFORmERS

STATuS OF THE STATES

POTENTIAl

RISERS

10



PuNJAB

uTTARAkHAND

WESTBENGAl

cHATTISGARH

JHARkHAND

mANIPuR

DElHI

JAmmu AND

kASHmIR

kERAlA

TRIPuRA

mIZORAm

PuDucHERRy

ASSAm

HImAcHAl PRADESH

ARuNAcHAlPRADESH

NAGAlAND

mEGHAlAyA

SIkkIm

GOA

uNION TERRITORIES


Existing broad renewable energy policy




No state solar policy (Rootop projects

initiated by MIREDA)

No solar policy yet, notied their RPO

requirments. Solar rootop policy

expected.

Drat solar policy (Not ormalized)

Projects to be developed under NSM

o-grid and RPSSGP

Existing broad renewable energy policy



No state solar policy.








Only central renewable energy policy

RPSSGP

Migration

projects

RPSSGP

GBI

RPSSGP

RPSSGP

Direct RPO

Direct RPO

Tota

8.5MW

7MW

7MW

2MW

4MW

16MW

1.5MW

2MW

2,274.25mW

2.5MW

12MW

1.5MW

515mW

6MW

2MW

5MW

2MW

4MW

4MW

2MW

976.56mW

No development so ar












STATE SOlAR POlIcy STATuSPPAs

SIGNED

FINANcIAlclOSuRE/

cONSTRucTIONcOmmISSIONED

PV PROJEcTS

Diret RPO: Projects initiated to ulll RPO obligations (project specic FiTs negotiated between utility &

developers) NSm: First batch o projects allotted under phase-1 o the NSM (includes migration projects)

RPSSGP: Rootop & Small Solar Power Generation Program under NSM GBI: Projects under MNRE GBI scheme

* We do not expect that all projects that have attained nancial closure will be constructed and commissioned.

NONmOVERS

BRIDGE TO INDIA, 2012

Source: BRIDGE TO INDIA

SlOWm

OVERS

11



RENEWABlEPuRcHASEOBlIGATIONS(RPOs)In order to urther encourage powergeneration rom renewable sources,

the ederal government, throughthe Central Electricity Regulatory

Commission (CERC), has introducedRPOs or both renewable power in

general and solar power in particular.

Solar RPOs are the minimum amounto solar energy that obligated entities

- distribution licensees, open access

and captive consumers (1MW andabove) - have to have as a percentage

o their total available electricity.

Currently, these are set at around0.25% o the total consumption ostate utilities and vary across states.

A distribution utility, which distributes1 million kWh o electricity in a year, is

obligated to obtain 2,500 kWh o theserom solar energy. It can meet this

obligation by purchasing the requiredquantity o solar power directly rom

producers. Alternatively,it can buy solar RECs to ulll its

RPOs.


Soar RPO targets in seeted states Apri 2012marh 2013STATE RPO Target Target in mW

Gjarat 1.00% 451

Harana 0.75% 366

madha Pradesh 0.60% 166

Rajasthan 0.50% 152

karnataa 0.25% 87

maharashtra 0.25% 182

Tai Nad 0.25% 45

Pnjab 0.07% 6

RENEWABlEENERGycERTIFIcATES(REcs) mEcHANISm

RECs can be generated by any

developer who sells solar power tothe public grid at the Average Pooled

Purchase Cost (APPC) o the relevantdistribution utility or sells solar power

to third-party consumers at a mutuallydecided price. RECs are not applicable

or projects in which power is soldto the grid at a preerential tari.

Further, power producers that have

begun to sell power at a preerentialFIT are not allowed to later switch to

the REC mechanism.

The REC market is yet to pick up inIndia. The main challenge it aces, is

the lack o a long-term predictabilityo REC pricing. The CERC has set

a foor price o M9,300 (143) and aorbearance price o M13,400 (206)

per REC or the period o 2012-2017. The current REC foor and

orbearance prices are only applicablethrough 2017. As a result, developers

who build their case on RECs aceproblems in raising debt because they

are unable to project their returnsaccurately or the loan repayment

period, which in India is typically upto ten years.

12

A distribution utility,

which distributes

1 million kWh o

electricity in a year,

is obligated to obtain

2,500 kWh o theserom solar energy.

The current REC foor

and orbearance prices

are only applicablethrough 2017.



REc Fraewor: Eigibiit

commercially. Such players wouldrather buy the RECs on the exchangethan develop solar capacity.

The REC market will grow once the

solar market strengthens in India andwhen longer-term price signals are

available. The market is also lookingto the government or making changesin the REC policy. Currently the RPOs

which create the primary market or

the RECs have to be ullled on a yearlybasis. As a result, obligated entities goto the market to purchase RECs only at

the end o a nancial year. This createsa spike in the cash fows o projects

rather than continuous cash fowsthroughout the year.


At the moment players are unclearabout the expected demand andsupply o RECs. This is closely

linked to the enorcement o theRPOs on distribution licensees,

captive consumers and open accessconsumers. I RPOs are enorced

eectively, distribution licensees likeTata Power and Maharashtra StateElectricity Distribution Company Ltd.

(MSEDCL) will develop their own

projects to meet their obligations.This is because they have a very highdemand or power and have the know-

how to execute power projects. On theother hand, captive consumers and

open access consumers with smalldemand will preer to buy RECs. This

is because solar RPOs are only 0.25%o total electricity consumption. For

a 1MW captive consumer, this wouldtranslate to 2.5 kW o solar RPO. Such

capacity is too small to be developed

13



REcs an boost retrns signifant

BRIDGE TO INDIA, 2012


Doesti Indstria coeria70

60

50

40

30

20

10

0

5.5 6 6.5 7 7.5 8 8.5 9 9.5 10

lcOE INR

IRR(%)

IRR w/o REC

IRR with REC

Finania Investor

Strategi Investor

CAPEX= M90m/MW

REC revenue period = 5yrs

Rate o debt = 13%

14



DEmAND GROWTHAND PROJEcTIONS

capait additionis rrent drivenaost esive bgovernent sbsidies

The installed capacity or grid-

connected solar power under thevarious policies by the end o 2012

will be close to 1GW up rom a mere22MW at the beginning o 2011 (all

PV). The growth has been driven bythe launch o the NSM and GujaratSolar Policy and the preerential

FiTs they oer. Currently, growth iscentering on grid-connected plants.

This trend is expected to continueover the next three years because

o a lack o incentives outside thepolicies and because solar power is

not yet commercially viable on a largescale. Growth o captive solar power

installations will be dependent on the

solar REC market in the short term.

Overview o SegentsFeed in Tari FiT

This segment has provided the viable

project development opportunitiesin the market until now. FiT project

installation in India has been drivenby the NSM and the Gujarat SolarPolicy. Gujarat has been the largest

contributor o Indias total installedcapacity. States like Karnataka, Odisha

and Madhya Pradesh have allocatedprojects under the FiT mechanism.

Going orward, NSM will be the biggestcontributor to capacity addition or the

FiT segment. More than 200 projectsdevelopers have been allocated

projects under preerential FiT inIndia. Welspun, Azure Power, ACME

Telepower, Mahindra Solar One, Lanco,Green Inra and Sun Edison among

others have been the leading projectdevelopers in India.

Projected market size till 2016is 4.5GW

FiT driven

RPO (REC)RPO (SP)

RPO (thermal-captive)

Grid-parity (commercial)

Diesel-parity (captive)

Diesel-parity (backup)

Telecom towers

2012 2013 2014 2015 2016

4000

3500

3000

2500

2000

1500

1000

500

0


B

RIDGETOINDIA,2012

Epeted soar instaed apait ear on ear

1,266

1,696

Tota: 12,053mW

STRATEGIccONSulTINGBRIDGE TO INDIAs Strategic

Consulting expertise lies in

assisting international clients to

engage the Indian market in the

eld o renewable energy, especially

solar energy. We combine strong

subject specic knowledge with an

interdisciplinary approach, and bring

together the nancial, technical,socio-economic, regulatory and

entrepreneurial aspects o business.

We develop viable, successul and

customized business models,

strategies and specic opportunities

that are adapted to the Indian

market. Our clients include REC,

BOSCH, IBC Solar and Pairan

amongst others.

With its extensive industry network,

market insights and projectknowledge on demand growth and

projections, BRIDGE TO INDIA is

able to provide customized solutions

to generate tangible success for its

clients. Our work encompasses the

following areas:

Market entry advisory

Competitive analysis

Business model development

Partnerships

M&A advisory

For more inormation, visit: www.

bridgetoindia.o/onsting

or contact tobias.engeeier@

bridgetoindia.o

15



RPO REc

This segment consists o projectsthat will generate solar RECs and

sell them on the power exchange.Such projects are driven by RPOs o

states and are thus termed as RPO

(REC). This segment is yet to take obecause o a lack o nancing or suchprojects. The biggest hurdle has been

the clarity on revenue beyond 2017.The countrys rst solar Renewable

Energy Certicates were issued onMay 24th 2012 to M&B Switchgear.

Getting the certicates is a two-stepprocess - rst is the accreditation

with the State Load Dispatch Centre(SLDC) and then the registration by

the National Load Dispatch Centre(NLDC). M&B Switchgear is the rst

project to be registerd and our otherprojects have been registered since.

Jain Irrigation has been registeredor a 8.5 MW project in Maharashtra,

Kanoria Chemicals or a 5 MW projectin Rajasthan, Gupta Suns or a 0.5

MW project in Madhya Pradesh andNumeric Power Systems or a 1 MW

project in Tamil Nadu.Projected market size till 2016

is 0.3GW

RPO SP

Each state has a yearly RenewablePurchase Obligation (RPO). This is

guided by the aim to source 3% o thetotal power through solar by 2022.

States may set up their own plants togenerate solar power in order to meet

this requirement. BRIDGE TO INDIAterms such projects as RPO Solar

Power or RPO (SP). NTPC is workingon projects planned in Uttar Pradesh,

Odisha, Madhya Pradesh and AndhraPradesh. Mahagenco is constructing a

solar project in Maharashtra to meetthe states RPO.Projected market size till 2016

is 1.0GW

RPO thera aptive

Captive thermal power producers have

a solar specic RPO requirement.Requirements or thermal captive

power producers are enorced by

the state regulators. Industrieslike mining, chemicals and cement

have large captive power generationcapacities. Vedanta Aluminium, Jindal

Stainless, SAIL, Aditya Birla Group,

NALCO and BALCO among others arethe largest obligated entities in India.Projected market size till 2016 is 1.0GW

coeria captive

Commercial taris in India are ashigh as M9/kWh ( 0.14/kWh) in

certain states and commercial hubs.Solar power has already reached

commercial parity in some locationsacross India. This combined with REC

mechanism, makes or nanciallyattractive plants. As per BRIDGE TO

INDIA analysis, this market is poisedto take o rom 2014 onwards as

Renewable Energy Service Companies(RESCOs) start selling power with this

business model. Net metering will bea key driving actor o this business

model.Projected market size till 2016 is 2.3GW

Teeo towers

India will have 550,000 telecom towers

by 2015. 33% o the currently installedtowers are completely o-grid and

23% o them are situated in regionswith less than14 hours o grid supply

on average. Based on the currentcosts o diesel generated-units o

electricity and the Levelized Cost oEnergy (LCOE) o solar PV-generated

units, there already exists a signicantgap between the costs per unit

generated rom the two sources. Thishappens to be the case or both o-

grid tower sites as well as the grid-interactive sites with poor grid supply.

This has made telecom tower segmentas a ront-runner among diesel-parity

based market segments or solar PVsolutions.Projected market size till 2016 is 1.9GW

BRIDGE TOINDIA ProjetDeveopent

BRIDGE TO INDIA oerssolar PV project development

services. We engage technology

companies, investors and real

estate owners in solar PV project

development with a strong ocus

on commercially attractive rootop

business models. This includes

project scouting, technical and

commercial due diligence, energy

concepts or captive projects,

and site development including

permits. BRIDGE TO INDIA is

also developing independent

commercially attractive captive PV

projects.

For more inormation, visit: www.

bridgetoindia.o/projets

or contact oiver.herzog@

bridgetoindia.o

16


23/44



THE PVmANuFAcTuR-ING INDuSTRy

IN INDIA STATuSThe Indian manuacturing industry

currently has an overall productioncapacity o about 1,250MW or

modules and 700MW or cells.

Indian manuacturing is mostlydependent on exports to international

solar markets. Indian manuacturershave been exporting 70% o their cell

capacity and 80% o their module

production capacity. The cutbacko FiTs in Europe and the excessivecompetition rom Chinese suppliers

has hit Indian module manuacturersadversely. In the growing domestic

market driven by the NSM and the

Gujarat state policy, Indian modulesuppliers have been able to gain a very

small market share. This has led to anunderutilization o the Indian module

manuacturing capacity.

In order to become globallycompetitive in an increasingly tough

market, Indian manuacturers willneed to change their business model.

They must reduce their costs in

production through a capacity rampup and vertical integration. MaharishiSolar is currently the only Indian

company with manuacturing acilitiesor ingots and waers; though it has a

total capacity o only 15MW.

ce anatrersin India*

mode anatrersin India*

* Data is only indicative based on industry interviews ; valid as on May 2012

The Indian

manuacturing industry

currently has an

overall production

capacity o about

1,250MW or modulesand 700MW or cells.

19



Indian Soar PV Spp chain

DOmESTIccONTENTGuIDElINESFor the rst phase o the NSM aDomestic Content Requirement

(DCR) was introduced. In batch one ophase one o the NSM, the DCR was

restricted to c-Si modules. In batch

two o phase one, the restriction wasenhanced to c-Si cells too. Thin-lmmodules have been allowed to be

sourced globally or the entire phaseone o the NSM. The guidelines or

the second phase o the NSM (2013-2017) are likely to be announced in

the last quarter o 2012. Despitethe intentions, the industry realizes

that the DCR has been ineective inpromoting manuacturing in India. At

this point, it is unclear i the DCR willbe extended to phase two o the NSM.

The state policies o Gujarat,Rajasthan and Karnataka do not have

a domestic content requirement.Other states such as Tamil Nadu,

Orissa and Andhra Pradesh are alsoexpected to avoid mandating domestic

content or projects. Madhya Pradeshhas been the only state that has a

domestic content restriction. Thepolicy also includes a non-location

clause. Projects can be located allover India, to prot rom higher

irradiation or lower land-prices.The success o this policy can be

trend-setting or upcoming policies.

OPPORTuNITIESFOR FOREIGNmODulESuPPlIERSGoing by the current allocations or

2013, Indias solar market will seeprojects covering 985MW under the

NSM and various state policies. Amajority o the PV projects under

execution in India are using modulesrom oreign suppliers. Although

the NSMs domestic contentrequirement encourages the domestic

manuacturing industry, allowing theimports o thin lm modules has been

crucial or project development inIndia. At the moment, close to 55% o

commissioned projects in India haveinstalled thin lm modules. Thin lm

has also been pitched as a betterperormer or the Indian climate,

however this is yet to be proven underIndian conditions.

The duty regulations applied to the

import o materials or a PV project inIndia also serve as an encouragement

or oreign suppliers. The developersare entitled to discounts on the base

duty on the import and the excise.

Eectively, the only extra cost borneby developers in importing is that oshipping.

THE DOmESTIc

cONTENT

REQuIREmENTTackling module sales in India

INDIA SOlAR STRATEGy BRIEF

BRIDGE TO INDIAs Market

Intelligence expertise lies in

combining keen market insight with

in-depth and precise knowledge o

the industry and policy ramework

in India. We publish this knowledge

through short and topical strategy

bries. Our latest strategy brie oers

insight on the Domestic Content

Requirement (DCR) in India and how

international crystalline module

suppliers can succeed in the Indian

solar market in the presence o the

DCR.

20



PVmANuFAcTuRINGFOREcASTThe PV manuacturing industry in

India had grown six-old rom under200MW in 2007 to a 1,250MW in 2011.This momentum has been broken due

to a global oversupply.

Large Indian business conglomeratessuch as Lanco Solar and Birla Surya

were planning to build completelyintegrated manuacturing acilities

o capacities as large as 600MW.Currently, most module and up-

stream expansion plans have eitherbeen cancelled or are on hold.

Manuacturing in India is expectedto regain the growth trajectory ater

2014 as the commercial and industrialparity projects in the domestic market

take o. Few large manuacturers who

are vertically integrated are expected

to dominate the market going orward.Module manuacturers who have been

providing EPC and other downstreamservices are more likely to survive a

consolidation. Going orward, a strong

domestic supply chain will bring downthe cost o raw materials or moduleproduction in India. As a result, the

domestic ingot and waer productioncapacity will be directly refected in

new domestic module manuacturingcapacities. New module production

capacities worth 2GW or more couldbe realized rom 2015 to 2020.

There is no domestic industry or

manuacturing equipment in India yet.The Indian PV manuacturing industry

is expected to provide an opportunityto the suppliers o PV manuacturing

equipment and the turnkey solutionproviders as and when the market

regains momentum.

PV manatring Foreast India

cuSTOmIZEDREPORTSBRIDGE TO INDIA provides in depth

market knowledge to clients through

customized reports to cover theIndian energy markets. Past, publicly

available reports include, among

others, an analysis o the Indian

energy market or the German

Environment Ministry, support or

REN21s Global Renewables Status

Report, an analysis o the Indian

Renewable Energy Market with

NREL, GIZ and IRADe, a report on

the Indian project development

processes or DENA and a report

on the Indian solar market with

Greentech Media.

New module

production capacities

worth 2GW or more

could be realized rom

2015 to 2020.


B

RIDGETOINDIA,2012

21



INTERVIEWS Dr. Thomas A. Louis joined SGSIndustrial Services as GlobalBusiness Development Manager or

Renewable Energy in 2012. He has a20 years track record managing large

international programs in renewable

energy and power generation andmore than 10 years o experience inmanagement consulting and nancial

services

What potential do you see in the Indian

solar market and how is India dierent

rom other markets?

As the largest independentproessional services provider in the

world with a global reach, a local

presence and a strategic interestin renewable power generation, wesee major trends avoring growth

in the Indian solar market. First,there is increasing electricity

consumption per capita, populationgrowth and hence demand or

building new power generationcapacity. Second, the levelized cost

o electricity generation (LCOE)using solar power, whether using

photovoltaic (PV) or concentratingsolar thermal technology (CST),

continues to decrease rapidly, in linewith reductions in the cost o core

components and overall systemcost. Third, India has high levels o

irradiation.

A avorable legal ramework, largeareas o suitable land and vast

numbers o technically skilledpeople can potentially contribute

to developing, manuacturingand deploying large numbers o

power generation plants in India.This could be both grid-connected

and standalone plants over awide geographic area and using

state-o-the-art renewable powergeneration technologies. However,

the Indian solar market is verydierent rom European markets

with regards to the ability to nance

signicant investments, reliabilityo the transmission and distributionnetwork and the experience o key

players. The eective collaborationo all the stakeholders is required in

Dr. Thoas A. loisGlobal Business

Development ManagerRenewable Energy, SGS

Group Management Ltd.

order to design, nance, build and

connect signicant renewable powergeneration capacity.

What module technology is best suited

to Indian conditions?

The best technology or a solar powerplant depends critically on the specic

application and circumstances.In some cases, where the tari

structure is progressive and theability to generate revenues rom

electricity sold at peak demand isdominant, CST with thermal storage

capability has the ability to matchelectricity supply to demand. Despite

CSTs higher LCOE, it may be moreattractive to decision-makers than

PV. In the case o ground mountedinstallations and where the cost o

land is low, thin-lm PV technology isavored due to its low cost per Watt-

peak. This is in contrast with the besttechnology or small, roo-mounted,

grid-connected PV installations,dominant in many European countries.

In such cases, the cost per m2 andlimited space availability avor theuse o higher eciency crystalline

silicon PV technology. In addition tothe above mentioned considerations

(tari structure, meteorologicalconditions, availability o land, area

related cost) the choice o particularsolar power technology that is best

or a large country like India will alsorefect the uture role the country

aspires to play in the global supplychain. The question as to what solar

power generation technology bestmeets Indias needs thus cannot be

addressed rom a single point o view.It all depends on which perspective

you take.

Do you think solar PV plants in India

will perorm as per expectations?

Whether individual solar power plants

perorm as per expectations is a

matter o proessional execution. SGSprovides a range o services, such astechnical and nancial due diligence,

which are designed to assure keystakeholders (owners, investors,

lenders, regulators) that their

SGS assists in assessing investmentsin solar power generation projects

and assures the quality o solarpower plants. SGS works as an

independent global service providercarrying out consultancy, inspection,

testing, supervision, monitoring,management, verication and

certication services or concentratingsolar thermal as well as photovoltaic

projects. Our services include siteassessment, project development,

core component manuacturing,construction and operation.

We have more than 70,000 employeesand operate a network o over 1,350

oces and laboratories aroundthe world.

Tel: +49 (40) 30 10 15 74

Eai

[email protected]

www.sgs.o

22



success in every solar project. Project

developers can improve this bankabilityby subjecting their work to verication

by an independent proessional servicespartner. The cost o engaging such

a partner, whether by the projects

developer, investor or owner, lender orbank, or EPC contractor, will certainlybe oset by the benets gained in the

orm o securing attractive projectnancing switly.

What are the key challenges with regard

to project execution in India?

The choice o local partners, the abilityto handle administrative processes,

to obtain permits and to eectivelydeal with counterparty risk, are key

to successul project execution. Thisapplies everywhere, but specically

in ast growing markets, which otenattract new and inexperienced players.

This may be the case in emerging solarpower markets such as in India. Here,

the price sensitivity o the solar powermarket and its potential or growth not

only attract large, experienced and wellknown players but also those whosewillingness to oer the lowest price

may not be matched by their abilityto deliver and provide guarantees or

lasting solutions at the lowest cost.The challenge is or decision makers

to distinguish what appears to be alow price rom a genuine low cost oer

rom a partner with a strategicallydeendable position and resulting cost

advantage. SGS oers independentproessional services and support

throughout project execution to decisionmakers when they need to be sure.

requirements are being addressed

and perormance expectations willbe ullled. Whether solar power

can make a signicant contributionto addressing Indias growing

demand or electricity, is a more

complex question. The success opublic incentive programs designedto stimulate the adoption o solar

power technologies is oten linked tothe generation o jobs in respective

industries. Such programs requiremore than projects being diligently

planned and proessionally executed.The need is to have independent

advisors and contracted third partyservice providers to support public

and private players on key decisions.

What can project developers do to

improve the bankability o their

projects in India?

The cost o solar power generated

electricity is ront-loaded, i.e.determined largely by the cost o the

system to be built and the weightedaverage cost o capital (WACC) used

or nancing the project. The systemcost is determined by the choice o

technology, suppliers and projectpartners and their proessional

execution. The WACC is determinedby the debt to equity ratio and the

respective cost o debt and equity.The more experienced and stronger

the partners in the project, thelower the project risk and the more

attractive project nancing termswill be. The ability to secure project

nancing through loans, with longpayback times and low interest rates,

in other words bankability, is a key to

Project developers

can improve this

bankability by

subjecting their

work to verication

by an independent

proessional services

partner.

The more experiencedand stronger the

partners in the project,

the lower the project

risk and the more

attractive project

nancing terms will be.

23



mr. Ravi khannaCEO, Solar Business,

Aditya Birla Group

Mr. Ravi Khanna serves as Chie

Executive Ocer o the Solar PowerBusiness o the Aditya Birla Group- a

US$35billion corporation and is basedin Mumbai, India. Prior to joining the

Aditya Birla Group, Ravi worked as

the CEO and President o Scatec SolarOslo, Norway and served as DirectorScatec AS.

Ravi has also served as Chie

Executive Ocer o Moser BaerPhotovoltaic Ltd., and PV Technologies

India Limited. In Moser Baer PV Raviwas responsible or the acquisitions

o technology rms and setting upo the technology inrastructure

while creating one o the astestmanuacturing capacities in Asia .

Ravi served as a member o the Indian

PMs solar technology mission andalso engaged very closely with MNRE,

IREDA and NORAD on development othe uture renewable and sustainable

energy platorms in India.

He has also served on the board oUS rms HelioVolt Corporation, SolFocus, Solaria and Stion Corporation.

Why has the Aditya Birla Group decided

to develop solar power projects in

India?

The Aditya Birla Group, US$40 billionpremium global corporation operating

in 36 countries, is committed tosustainable business practices and

environmental conservation.

Towards sustainable resourcemanagement and urthering the

growth o alternative energy in India,the Group has decided to participate

in the development o solar powerin India. The Group is engaged in

many power intensive sectors suchas aluminium, cement, carbon black,

VSF and chemicals. We have taken aconscious decision to voluntarily align

our energy portolio and ensure that a

sizable portion o energy comes romrenewable sources.

What are the size o projects that you

are looking to develop? Will these be

under the NSM or state policies?

We are looking at various

opportunities independent o scale.

Among small scale projects, we haveevaluated setting up decentralizedsolar power projects or community

development in and around ourindustrial townships, mining acilities

as well as or our telecom towers.We are also keen on developing

large scale projects under the gridconnected policies be it National

Solar Mission, existing or orthcomingstate policies as well as the

independent REC/RPO mechanism.

As a large business conglomerate,

you ace RPOs or your dierent

businesses. What is your strategy to

meet these obligations?

As one o the largest private

consumers and captive generatorso power, we will o course adhere to

all regulatory obligations as they aremandated in the uture. However, weare seeking to move proactively to

make sure that we can address theseobligations promptly and eciently.

In any large corporation, there willbe a mix o activities to meet the

stated target including purchase ocerticates, own generation, purchase

o renewable power and so on.

Is the solar REC market viable? Are you

looking to develop projects based on

the REC mechanism?

For a business venture a stableregulatory environment is essential.

This enables a air analysis o themarket risks to be managed. The REC

market today aces certain challenges- the key being the lack o clarity

on the enorcement o RPOs and itsimpact on the REC prices in the uture.

The regulation itsel is a well thought

out document, but due to enorcementissues businesses are slow incommitting capital on the scale that

is required. The market will remain

A US $40 billion corporation, theAditya Birla Group is in the League

o Fortune 500. It is anchored byan extraordinary orce o over

133,000 employees, belonging to 42

nationalities. The Aditya Birla Grouphas been ranked 4th in the worldand 1st in Asia Pacic in the Top

Companies or Leaders study 2011,conducted by Aon Hewitt, FortuneMagazine and RBL (a strategic HR

and leadership Advisory rm).

Over 60 per cent o the Groupsrevenues fow rom its overseas

operations. It operates in36 countries.

Tel: +91 (22) 24 99 50 00

Eai

[email protected]

www.adtabira.o

24



stunted without access to capital or

nance until the concerns relating toenorcement are addressed. Other

problems that are systemic to thepower sector such as the development

o evacuation inrastructure, intra

and interstate transer o energyand payment rom the statedistribution companies (DISCOMS)

can all be addressed in parallel aterthe resolution o the key issue o

enorcement. We, at the Aditya BirlaGroup, are keen to develop projects

under the REC/RPO mechanism bothor sale o power to our units and to

other companies that may requiresuch power as well as to supply

certicates to the exchange to helpacilitate the REC process.

What are the key actors that govern

your decision on the purchase o

modules?

The key considerations that we look

at or the purchase o modules all

under three broad heads quality,eectiveness and price. Under qualitywe look at the warranty and guarantee

conditions that the module supplierprovides, the rate o degradation and

the health o the company backingthe module. In cases where we have

limited land availability or whereland is costly, the eciency becomes

important. Under eectiveness weexplore the type o guarantee provided

whether it is linear or fat, thesize o the bankability reports o the

company providing the module and therelated balance o system costs or

that particular module. Under priceconsiderations, cost, payment terms

and delivery schedule are key.

The key considerations

that we look at or the

purchase o modulesall under three

broad heads quality,

eectiveness and price.

25



mr. maroWirnsberger

Managing Director,

Skytron Energy

Mr. Winsbegers proessional

experience spans a period o 11 yearsin the solar photovoltaic industry. He

started his career as an R&D Engineerat Wuseltronik (predecessor company

o Skytron Energy). He has spent 4

years in the position o Sales Directorat Skytron Energy and has beenManaging Director o Skytron Energy

since 2011.

According to you, how crucial

are monitoring systems to the

perormance o PV plants in India?

Ecient monitoring and supervision isthe very backbone o a PV power plant,

i considering its 25 years o operatinglie. In India, we have to cope with a

number o adverse environmentaleects, such as high temperatures

and dust. There are local challengeslike limited inrastructure, lack

o technical experience, irregularmaintenance and the tendency to cut

corners on construction to reduce theplant costs. All these are acts that

spiral the running costs over the liecycle o the plant.

Utility-scale PV power plants consisto thousands o interconnected

components. In practice, this makesit extremely dicult to detect or

maintain system aults using manualmethods. Without a remote, real-

time and high-precision monitoringand control system, you will not be

able to pinpoint the ailure or lowperormance o a particular string

or subsection o the PV plant. Everyminute o down-time reduces the

plants yield and, in the end, cuts intothe owners return on investment.

A reliable and accurate monitoringsystem is a strong and eective tool to

secure the investment.

Monitoring and supervision systemsdetect ailures and reduced

perormance instantly, and send

alarms to the plant operator. Thisenables quick ault diagnosis whichin turn is the basis or a proper and

ecient repair and maintenancemanagement. In this way, technical

problems can be detected and

corrected immediately. In addition,

monitoring systems provide a reliableprognosis o the energy yield. This

helps plant owners or investors whohave a keen interest in monitoring

their assets and investments.

What is the response o Indian

developers to the use o monitoring

systems or projects in India?

Indian project developers are notcompletely aware yet o the real

importance o a monitoring system.They underestimate the requirement

and consider monitoring and remotesupervision as a non-essential

investment.

Quite oten, they rely on the simplemonitoring eatures provided by

inverters without considering thelong-term solution that would oer

remote supervision o several plantson a single platorm, and the added

benet o comprehensive analysisand comparison eatures. In India,

very ew project developers seemto be aware o the long term eectson energy yields o utility-scale PV

power plants that are running withouta ully integrated monitoring system.

They oten consider such monitoringsolutions as rather expensive. Yet,

they overlook the losses in thenormalized yield due to the lack

o precise monitoring. In Europe,initially, utility scale plants were

typically built without a monitoringsystem. Later, when monitoring was

made mandatory by the utilities, theseplants had to be retrotted. This is

gradually changing now as more andmore project developers are learning

rom this past experience with theiralready commissioned and retrotted

plants. However, even today somelarge-size plants are being built

without monitoring systems dueto low budgets and the pressure o

completing and commissioning these

plants on tight deadlines.

Are there a large number o companies

oering monitoring systems in India

or is the market only just beginning to

expand?

Monitoring, Control & Supervision oPhotovoltaic Power Plants - More than

2GWp worldwide rely on skytronsmonitoring solutions Our integrated

system includes: high-precisionPV string current measurement,sensorics or ambient condition

measurement, intelligent dc combinerboxes, real-time high-resolution

data logging, SCADA platorm ormulti-vendor multi-site power plant

supervision, closed-loop controlo active and reactive power by

measuring all relevant physical valuesat the grid connection point as well as

a complete lie-cycle O&M.

Skytrons monitoring conceptenables you to increase the

availability, fexibility and protabilityo your solar installation. We protect

your investments!

Tel: +49 (30) 68 83 15 90Fax: +49 (30) 68 83 15 99 9

Eai

[email protected]

www.stronenerg.o

26



The Indian market or monitoring

systems is picking up slowly. Manytraining programs across the country

add to the awareness o photovoltaicsystems, resulting in increasing

demand compared to the past.

Large size companies with procientengineering teams will most likelydemand high-end monitoring eatures

or their PV projects. At the sametime, the number o companies

providing monitoring solutions is alsoon the rise in India. Some o them are

starting with very little experience,whereas others quite oten collaborate

with an established solution provider.EPC companies increasingly expect

a complete package comprising boththe solar inverters and the monitoring

system monitoring. The current trendis to buy dierent components rom

dierent providers, put them togetherinto a sort o system and sell this to

the customer with cost-eectivenessalways being the crucial aspect.

There are hardly any companieswho have developed a monitoring,

control and supervision system asan integrated system solution, whichcovers all the aspects o monitoring

and control o both the DC and AC sideo the PV plant.

What are the challenges Skytron

energy has aced as a oreign company

entering the Indian market?

The Indian market is quite dierent

rom the European or Americanmarket. New PV project developers

need detailed inormation not onlyabout theproviding company, but

also about the PV technology oered.Then, ater realizing the importance

o a monitoringsystem, the Indiancustomer usually goes looking around

or a cheaper option, orgettingabout the quality, the comprehensive

unctional range and the long-termand reassuring experience that

comes with a system solution rom

our company. I am convinced, though,that only in a ew years, PV projectcompanies will ully comprehend

the important dierence between amere monitoring unction,on the one

hand, and a reliable, ully integrated

real-time remote monitoring, control

and supervision systemsolution, onthe other hand.Other concerns voiced

by PV project developers are thingslike round-the-clock service, local

manuacturing and local presence in

India.In the current scenario, low costand quick delivery are the two mainchallenges that skytron energy is

acing. Prior to our local presence, wehad high transport costs and extended

delivery due to overseas shipping andcustoms clearance time. But inspite

o this, we have already successullyinstalled and commissioned over

200MW o PV power with dierentcustomers in dierent states in

2011,and we expect at least aredoubling in 2012.

What has been the advantage in

partnering with AEG in India? How has

it helped both companies?

Local presence is essential to being

successul in the Indian market. AEGis the parent company o Skytron

Energy. This partnership has helpedus in increasing the customer baseand getting orders or monitoring

solutions. By June 2012 we willbe ready to manuacture 80% o

our monitoring equipment locallyin Bangalore where AEG already

manuactures their central inverters.This makes a huge impact on reducing

delivery time and import costs orour customers. Also, the local service

team trained or our system is crucialor us as it allows us to be close to

our Indian customers and supportthem with short reaction times and

excellent quality. In addition, AEG hasa considerable advantage over several

other competitors as it oers thecomplete solution requested by EPCs,

that is to say, they oer both, the solarinverters and the ully integrated

monitoring, control and supervisionsolutions. AEG, in turn, has beneted

rom Skytrons long-term photovoltaic

experience o more than 35 years.All this is essential or a successuland sustainable relationship with our

Indian customers.

The Indian marketor monitoring

systems is picking up

slowly. With growing

project development

volumes, the number

o experienced

technicians in the

eld o PV is steadilyincreasing.

Local presence is

essential to being

successul in theIndian market.

27



mr. Jens BrgtorCSO, Director, Indo-

German Energy

Program, GIZ

Since March 2008, Mr. Jens Burgtor

is the Director o the Indo- GermanEnergy Programme (IGEN) o

GIZ Deutsche Gesellschat uerInternationale Zusammenarbeit

GmbH, i. e. German Development

Cooperation based in New Delhi.Beore joining GIZ, Jens Burgtor hasbeen Head o the Department Asset

Management Energy Production andWaste-to- Energy at City o Munich

Municipal Utilities (2004 to 2007)and worked as a reelance energy

consultant. From 2005 to 2008, hehas been member o the extended

Presidency o the German GeothermalSociety.

How do you rate the Indian solar

market in the international context?

India is with no doubt one o the mostpromising markets or solar energy

in the world. Nevertheless it will stilltake some time and eorts to become

as attractive as or instance theGerman PV market has been in the

last years.

Where do you see the role o PV and

CSP technology respectively in India?

PV is the technology o choice iyou want to invest in solar in India

today. Large on-ground PV plants arealready under construction and much

more in the planning phase. But ahugh potential still lies more or less

untouched. This is the sector o rootop mounted PV which added most

o the capacity or instance in theGerman market. I see CSP more as

a uture market as the technology asmuch larger requirements with regard

to the construction and operationo the plants. This is currently more

expensive and restricted to certainareas in India. Nevertheless CSP

should come with the option o energystorage, which could supply solar

energy on a more continuous basis.

What challenge does the lack o

irradiation data hold or bankability

o projects in India? What do you see

as possible steps to address this

challenge?

The lack o irradiation currentlyincreases the risk or the investorin solar power plants in India. I

you do not know exactly what theirradiation is at the proposed project

site the bankability o the projectaces signicant uncertainties and

a possible all o up to 30 % on theexpected power generation. The

challenge is already addressed bythe Ministry o New and Renewable

Energy, which is already installing agrid o monitoring stations all over

India. GIZ is supporting this projectand the data received will be made

public soon.Will the uture o the solar market

in India be in the on-grid or o-grid

space?

The main market will denitely be

in the on-grid sector. The electricitydemand in India is still growing veryast. Only on-grid installations will

be able to contribute to this marketsignicantly. Nevertheless there is a

huge potential or o-grid applicationsas well, be it or remote villages or

telecom towers.

When and where will solar power be

able to compete on purely commercial

terms i.e. without government support?

We already see examples where solarpower can without government

support compete or example withdiesel-generated electricity. I we

see that the price or PV moduleswill urther come down and the cost

or ossil uel on the other handwill continue to rise, it will not take

long till competitive solar power isavailable on a broader basis.

28

GIZ is a ederal enterprise, whichsupports the German Government

in achieving its objectives in theeld o international cooperation or

sustainable development.

GIZ operates in many elds: economicdevelopment and employment

promotion; governance anddemocracy; security, reconstruction,

peace building and civil conficttransormation; ood security,

health and basic education; andenvironmental protection, resource

conservation and climate changemitigation. We support our partners

with management and logisticalservices, and act as an intermediary,

balancing diverse interests insensitive contexts.

Tel: +49 61 96 79-0Fax: +49 61 96 79-11 15

Eai

[email protected]

www.giz.de



mr. Jan mar RaitzDirector, Commercial

Department, PV Projects,

IBC Solar

Mr. Jan-Marc Raitz joined IBC

SOLAR AG as Director Commercial

Department PV-Projects in

January 2011. In this position he

is in charge o the teams Sales,

International Project Development,Commercial Management and Sales

Coordination within the business

unit PV-Projects. His task is to

urther develop and to strengthen

IBC SOLARs current business

internationally. Beore joining IBC

SOLAR he gathered vast experience in

the eld o renewable energies.

Is there a market or turnkey solar

solutions in India? What is IBC SOLARsstrategy or the market?

We are already considering today the

Indian PV solar market, beside our

German core market, as one o the

strongest international markets with

a substantial growth or the coming

years. We have successully executed

large scale photovoltaic power plants

last year under the National Solar

Mission Migration Scheme. With thesewe have proven our competitiveness

under demanding market conditions.

We intend to continue on this road

and strengthen our EPC capabilities

by opening our own oce in the city

o Mumbai within summer 2012. This

will give us more fexibility and control

over the so-called local content such

as civil works, substructures and

erection services. Following that,

we intend to develop our own MW

scale rootop projects or which we

oresee a bright uture in the Indian

PV market. Such projects shall be

ully developed, pre-nanced and built

under an EPC regime by us beore

we nally sell them to interested

investors, who are seeking projects on

a balance sheet nancing approach

only. We believe that our combination

o rst class German engineeringand project execution capabilities

combined with a pricing competitive in

local market conditions will be highly

accepted within the Indian PV industry.

What has been the perormance o your

plants in India so ar? Have they met

your expectations?

Yes, the plants perormances have not

only exceeded our expectations; the

expectations o our clients have beenmet by 100% or more. We are proudin receiving eedback rom the market

stating that our PV installations areamong the top perorming plants

within all o India with a perormanceratio by ar above 80%. Additionally, we

were happy to see that all installationswere grid connected in time so

that our clients were not acing thedanger o losing their initial tari. Our

compact and proven design has beenone o the key success actors or the

overall excellent perormance o thesystems. All this could be achieved

without any compromise on our IBCquality standards and philosophy.

What has been your experience in

adapting the technology and Balance o

Systems or projects in India? What are

the challenges you have aced?

It was necessary to adapt ourselves

to the Indian market environment andto be willing to learn also rom our

Indian partners and customers, whohave kindly guided us on these rst

projects within the India PV market.It would not have been wise to simply

stick to our German approach onproject execution. The openness o our

partners, customers and our team tolearn rom each other has been one

o the driving success actors. Duringthe nal installation phases we were

required to send a high number ohighly qualied engineers and site

managers to India to guarantee thatthe systems were set-up in a proper

manner and then nally guarantee ourquality.

What are the EPC and module price

developments that you expect in the

months ahead in India?

The prices will be dictated by the

market anyway, but as o today we

believe in being competitive with a

Established in 1982 in BadStaelstein, Germany, IBC SOLAR is

one o the worlds leading photovoltaicsystems integrator. Globally, IBC

SOLAR has already implementedmore than 120,000 ready-to-usephotovoltaic installations with a total

power o more than 1.7GWp. Thescope o these ranges rom large-scale power plants to on-grid and

o-grid systems that supply privateresidences. Engineering, delivery

o all components and construction(EPC) o turnkey power plants

make up the project businessescore competencies, in addition,

comprehensive consultancy services

as well as operation and maintenanceo the installations are key services.Since 2008 IBC SOLAR has

constructed several multi megawattpower plants under the NSM Policies

or leading Indian multinationalenterprises such as the

Videocon Group.

Tel: +49 95 73 92 24 51 9

Eai

[email protected]

www.ibsoar.o



system price o around M84.5 (1.3)

/Wp on a turnkey basis or large

scale installations. We will be in

the position to oer clients a single

source solution with product and

plant perormance guarantees. Inaddition, these will be backed by

rst-class bank guarantees. As a

result, we expect to be successul in

India. Furthermore, we intend to oer

operation and maintenance services

via our Mumbai oces. This careree

package will provide our customers

and their nanciers with the required

trust to work with IBC SOLAR as one

o the leading PV solution providers.

Importantly, we have also engaged an

Indian cell and module manuacturer

or supplying us with IBC crystalline

modules that are going to be

manuactured in accordance with our

specications and under our quality

regime. This partner will undertake

contract manuacturing or us. This

will help us to be active in projects

with local content requirement without

any compromise on plant our product

quality.

How important are o-grid, rootop PVsolutions or India? When do you think

this segment o the market will take

o?

This market segment is still in its early

stages, but can already be regarded as

the next growth segment. Large scale

rootop installations are especially

attractive to us. Nevertheless, such

projects will be a bit more complicated

in development and execution. Herewe believe we will already have the

key answers in hand due to our long-

lasting experience abroad in this

eld. O-grid solutions on a kit basis

will also become a standard the next

years. Here it will be important to

build a good distribution network or

being close to the nal customer.

30


36/44



Dr. Engelmeier

Over the last two years, the cost o

solar has allen dramatically. Whilethis is a global phenomenon, India

has, through the auction process,

been able to closely mirror that dropin prices and reduced margins to abare minimum. All players along the

value chain have stretched themselvesmore than ever beore. This has

advanced the case or solar poweras it has brought it into the vicinity

o parity with other sources o powerand has strengthened the case or this

technology in India.

What is the market potential o theIndian solar industry? How realistic are

the growth projections?

Mr. Herzog

The NSM and various state policies at

present have capacity addition planso more than 20GW until 2022. While

still at an early stage with currentlyaround 1GW o installed capacity,

we believe that India is on course to

reach that target. Commercial paritywill urther boost the solar market.Our estimate is that by 2016 we willhave a total, cumulative installed

capacity o more than 12GW acrossvarious market segments. Currently,

the overall energy structure under theNSM is ocussed on larger MW-scale

power plants eeding into the grid.The captive market will take o, once

a stronger regulatory ramework withe.g. net-metering is in place.

Dr. Engelmeier

Reaching grid parity or commercial

parity is going to change the

market signicantly. This will be an

infection point, and will reset themarket potential o solar industry in

India, given Indias massive energydemand. Innovation in energy storage

technologies will bring a second

infexion point which will boost thedecentral systems urther. In theshort term, a lot will also depend on

whether the Renewable PurchaseObligations market will take o and

whether there will be a domesticcontent requirement. We have just

written reports on these topics toanalyse them in-depth.

What are the challenges or the

industry at the moment and what canbe done to overcome them?

Dr. Engelmeier

The greatest push would come roma urther de-regulation o electricity

prices. Indias electricity prices atpresent are not refecting the actual

costs o generation. A liberation othis market would have two proound

eects: it would lead to signicant

and much-needed investment intogrid-inrastructure and it would leadto a rise in power prices, thus making

solar a more attractive option.

Mr. Herzog

The Indian government should also

invest more in research. For India tobecome a global technology leader,

the ocus should be on de-centralapplications, low cost applications,

mini-grids, rural applications, andstorage. Around these challenges

and skills, a world class industry canbe ormed, with a view to replicating

Indian models internationally.

Over the last twoyears, the cost o

solar has allen

dramatically.

The Indian government

should also invest more

in research. For India

to become a global

technology leader, the

ocus should be on de-

central applications, low

cost applications, mini-

grids, rural applications,and storage.

32


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39/44

NSm

Gjarat

Rajasthan

karnataa

Phase

miestones

Deadine

PartiesInvoved

Deadine

PartiesInvoved

Deadine

PartiesInvoved

Deadine

PartiesInvoved

RS

RequestorSelection

X

NVVN

X

GERC

X

RRECL

X

KREDL

SubmissionoProposal

X+30days

ProjectDeveloper

notdefned

GERC,Project

Developer

X+30days

RRECL,Project

Developer

N/A

ProjectDevloper

Reselection

X+75days

NVVN

notdefned

GERC,Project

Developer

X+75days

RRECL,Project

Developer

N/A

KREDL

Seetion

AuctionProcedure

X+90days

ProjectDeveloper

N/A

N/A

X+105days

RR

Documents

The India Solar Handbook