1
India wants to install
by 2022
© BRIDGE TO INDIA, 2015Illustration by tiffinbox
Sponsors
India Solar Opportunity2015
2
3
Introduction
India is perhaps the most exciting solar market in the world helped by rapidly improving commercial viability of solar PV technology, its huge need for power and of course, its social and environmental imperatives. Solar technology has many unique attributes which make it one of the most preferred sources of power particularly in India, a densely populated country with high energy deficit – it can be rapidly deployed across most parts of the country, it is modular in nature and it is environmentally friendly.
The strong fundamentals are matched by the bold vision of the new government which has already taken several decisive steps to grow solar power:• Solar capacity target revised upwards to 100 GW by 2022 and aim to
provide power to all citizens by 2019 (there are 300 million people in India without access to grid power);
• Amendments proposed to Electricity Act including open access reforms and enhancement of Renewable Purchase Obligations;
• Solar parks policy announced removing 2 key execution bottlenecks ie land and power evacuation;
• Setting up of dedicated transmission corridors;• Rationalisation of Renewable Energy Certificate regime;• Low cost financing support from bilateral and multilateral agencies.
Given the scale of ambition and challenge, many of these steps are understandably still work-in-progress. But there is little margin for error. The transmission grid needs strengthening and financing costs need to be reduced. Most important of all, the policy framework needs to become consistent, stable, predictable and business friendly.
The government has a key role to play in the sector particularly in the formative years but its focus needs to gradually shift to enabling private business models. For example, by ensuring that grid pricing is free of subsidies and improving relative competitiveness of solar power, retail adoption rates can be boosted. Similarly, fundamental reform of open access can unleash market forces by opening up private development and trading of solar power.
For international investors and project developers, unnerved by past policy uncertainties and bureaucratic delays, the critical question is – is this the right time to bet on the Indian solar market? Our definitive belief is YES. No doubt there will be short term challenges but the sheer fundamental attractiveness of this market and first mover advantage is compelling enough.
Pranav MehtaChairman
National Solar Energy Federation of India
4
Utility scale projects
Installed capacity by state
Bihar
Andaman &Nicobar 5
PC
Jharkhand 18PC
West Bengal 7
PC
Madhya PradeshPC
240
2074.5
17510
25
PUD
Punjab47
21
PC
250
PUD
Tamil Nadu 105 123
PC PUD
Chattisgarh 606
PC PUD
Uttar Pradesh 5 26
PC140
15
PUD
Delhi 4.5PC
Rajasthan375
65
31
PUD535
326
25
PC
Uttarakhand 29PUD
5
PC
Gujarat60865
48
PUDPC
Karnataka5 46 10
12
PC PUD
642
4
Maharashtra3130PC PUD
302 43
Andhra Pradesh 32
915
PC10
500
9
PUD
Telangana 18PC
584
53
PUD
28
Haryana14
PC
Odisha 5 21
PC20
PUD
Source: BRIDGE TO INDIA project database
5
NSM
Target of 15 GW by 2022
Offtake by central government entities on reverse bidding basis
Financial support in the form of feed in tariffs or Viability Gap Funding or interest rate subvention
State policies
3.2 GW projects currently under development
Offtake by state government entities on reverse bidding basis
Bankability of state distribution companies major concern
Public sector
1 GW projects by public sector with offtake by
central or state government entities
Viability gap funding of $167k per MW
Module/cell sourcing from within India
Private sale of power
Bilaterally negotiated projects with offtake by
private consumers
Driven by commercial parity of solar power
Unpredictable open access policies
Payment risk of private consumers
Solar parksGovernment of India plans to set up 20 solar parks, each with a capacity of over 500 MW
Project types
Source: Solar Energy Corporation of India; Gujarat Power Corporation
Capacity: 2,700 MWSites: Bhadla and
Jaisalmer
Capacity: 700 MWSites: Vav, Banaskantha
Charanka Capacity: 590 MW
Bhadla phase ICapacity: 100 MW
Capacity: 1,600 MWSites: Belagavi, Bellary,
Tumkur
Ultra mega solar power project of 750 MW at Rewa
Capacity: 1,500 MWSites: Anantpur, Kurnool
Ultra mega solar power project of 1,000 MW at Kurnool
Capacity: 1000 MWSites: Mehboobnagar
Capacity: 50 MWSites: Guwahati
Ultra mega solar power project of 7,500 MW
Capacity: 500 MWSites: Jalaun, Allahabad, Mirjapur, Sonbhadra
Capacity: 2,000 MWSites: NA
Gujarat
Madhya Pradesh
Karnataka
Rajasthan
Punjab
Uttar Pradesh
Jammu & Kashmir
Meghalaya
Andhra Pradesh
Telangana
6
First state to execute net metering based installations in India
Solar policy aims to install 300 MW rooftop solar plants
Only state to introduce gross-metering for setting up 25 MW rooftop solar projects
400 MW rooftop solar targetby 2018
20 MW rooftop solar target by 2017
5 MW rooftop solar target by 2005
20 MW rooftop solar target by 2018
Bidding underway for 100 MWrooftop solar installations
Mandatory for all buildings over 500 sq. yards to install
rooftop solar power
Kerala
Gujarat
Karnataka
Rajasthan
Chandigarh
Uttarakhand
Delhi
West Bengal
Odisha
Andhra Pradesh
Tamil Nadu
Punjab
Haryana
Telangana
Chattisgarh
Uttar Pradesh
Meghalaya
Himachal Pradesh
Bidding underway for 5 MW rooftop solar installations on
government buildings in 3 cities
Madhya Pradesh
Rooftop solar
Rooftop policy by state
Commercial & Industrial Customers
Driven by commercial parity of solar power
High upfront cost of ownership; long pay back period
Poor bankability of private consumers
Residential Customers
High cost of solar power vs residential grid tariffs
Poor customer affordability
Poor supply of grid power in many areas
Customer types
7
Financial viability for commercial customers
Financial viability for industrial customers
Financial viability for residential customers
Residential tariffs in India are highly subsidized and below the cost of rooftop
solar power
Solar power has achieved grid parity with industrial tariffs
in three states and in another eight states with AD benefit
Solar power has achieved grid parity with commercial tariffs
in nine states and in another four states with accelerated
depreciation (AD) benefit
Source: BRIDGE TO INDIA research
8
Transmission charges, wheeling charges and cross subsidy
surcharge waived for 10 years, banking charges waived
Transmission charges reduced to 2% of energy injected, wheeling charges and
cross subsidy surcharge waived
Transmission charges, wheeling charges and cross subsidy surcharge waived
Cross subsidy surcharge waived
Cross subsidy surcharge waived
Transmission and wheeling charges reduced to 2% of energy injected,
banking charges waived
50% of transmission and wheeling charges waived, 75% of cross subsidy
surcharge waived
50% of transmission and wheeling charges and cross subsidy surcharge waived
Madhya Pradesh
Maharashtra
Karnataka
Punjab
Uttarakhand
Odisha
Andhra Pradesh
Tamil Nadu
Open access regulations
Open access charges and losses
Open access incentives for solar projects
In the recently announced amendments to Electricity Act,
cross subsidy surcharge has been removed for
renewable projects
Source: MNRE website,BRIDGE TO INDIA research
9
Off grid solar
Micro/mini gridsSource: MNRE, BRIDGE TO INDIA analysis
Water pumpsSource: MNRE, BRIDGE TO INDIA analysis
Telecom towersSource: Tata Strategic Management Group, Telecom Regulatory Authority of India
10
11
Disclaimer© 2015 BRIDGE TO INDIA Energy Private LimitedAll rights reserved February 2015, New Delhi
This report is owned by BRIDGE TO INDIA and is protected by Indian copyright and international copyright/intellectual property laws under applicable treaties and/or conventions. The user agrees not to export this report into a country that does not have copyright/intellectual property laws that will protect BRIDGE TO INDIA’s rights therein.
BRIDGE TO INDIA hereby grants the user a personal, non-exclusive, non-refundable, non-transferable license to use the report for research purposes only pursuant to the terms and conditions of this agreement. BRIDGE TO INDIA retains exclusive and sole ownership of each report disseminated under this agreement. The user cannot engage in any unauthorized use, reproduction, distribution, publication or electronic transmission of this report or the information/forecasts therein without the express written permission of BRIDGE TO INDIA.
No part of this report may be used or reproduced in any manner or in any form or by any means without mentioning its original source.
The information contained in this report is of a general nature and is not intended to address the requirements of any particular individual or entity. BRIDGE TO INDIA aims to provide accurate and up-to-date information, but is not legally liable for the accuracy of such information.
BRIDGE TO INDIA is a specialist consulting company focusing on renewable energy in the Indian market. Founded in 2008, the company is based in New Delhi and Munich. BRIDGE TO INDIA offers strategy consulting, transaction advisory and market intelligence services to equipment and technology suppliers, contractors, investors, financial institutions and developmental agencies.
Contact us at:
www.bridgetoindia.com
Follow us on facebook.com/bridgetoindia
www.bridgetoindia.com/blog
C 8/5, DLF Phase 1, Gurgaon 122 001, Haryana, INDIA