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India wants to install

by 2022

© BRIDGE TO INDIA, 2015Illustration by tiffinbox

Sponsors

India Solar Opportunity2015

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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

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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

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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

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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

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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

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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

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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

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