NRDC India Solar Report Executive Summary Lowres

7/31/2019 NRDC India Solar Report Executive Summary Lowres

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Laying the Foundation for a Bright FutureAssessing Progress Under Phase 1of Indias National Solar Mission

For more information, please contact:

IndiaFa

Dr. Arunabha Ghosh

[email protected]

Tel: +91 11 4169 9270

Anjali Jaiswal

[email protected]

Tel: 415-875-6100 Tel: +91 97178 12808

CREDIT: (phoTo aT lET) punj lloy

From tentative beginnings, Indias solar energy market is picking up steam. From 17.8 megawatts (MW) in

early 2010, cumulative installed capacity reached 506.9 MW at the end of March 2012.1 The Jawaharlal Nehru

National Solar Mission (NSM or Mission), launched in 2010, has catalyzed much of this growth. Even with 300

sunny days a year in most regions, creating a new solar energy market in India is no easy task.

Making headlines in late 2011, competitive bidding or theMissions second batch o projects under Phase 1 droveprices or grid-connected solar energy as low as `7.49($0.15) per kilowatt-hour, approaching grid parity withossil uel-powered electricity. Phase 1 also attracted largeconglomerates and new players into the solar market. Bideuphoria, however, is wearing o, and serious doubtsremain as to whether the Missions Phase 1 projects willmeet commissioning deadlines. Although several projectshave been commissioned since January 2012, concernsabout project delays are expected to overow into uturestages o the Mission. As the Mission heads into Phase 2,

larger questions loom. It is unclear whether it is on course toachieve 20 gigawatts (GW) o installed solar capacity by 2022,and how the Ministry o New and Renewable Energy (MNRE,the nodal agency or the Mission) and other governmentagencies, as well as stakeholdersincluding developers,

fnancial intermediaries, manuacturers and communitiescan be more eective in scaling solar energy to power one othe worlds astest-growing economies.

The Solar Mission ollows a phased approach thatallows the government to modiy guidelines and policiesbased on the experiences gained and lessons learned inearlier phases. This interim report adopts a whole-o-system approach, which identifes multiple stakeholdersoperating within the Mission and analyzes their successesand challenges. The report examines the commissioningo Phase 1 projects, eorts to increase bankability, thedevelopment o a manuacturing base, and the creation

o an enabling environment. Addressing these challenges,the report presents fndings and recommendations to scalegrid-connected solar energy development. The report drawsrom extensive individual and group stakeholder discussionsas well as research and analysis o national, state, andinternational programs.

The full report can be found online at:

.nd.g/innaina/indiaand ..in/a


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PhAse 1 oF the NAtIoNAl solAr MIssIoN:BuIlDING solAr INDIA

During the Missions frst phase, more than 500 bidderscompeted or 63 projects allocated during two reverseauctions, driving prices to record lows. New solar energyinvestments in India increased to more than `12,000 crore($2.5 billion) in 2011. Phase 1 activities have ocused largelyon achieving 1,000 MW o solar energy through an equalsplit between solar thermal and solar PV project technology.

Although Indian industries have responded positively to theSolar Mission, it aces several hurdles in moving ahead. Toscale solar energy, the central governmentwith coordinatedaction by states, developers, fnancial institutions,manuacturers, research institutes, and communitiesneedsto develop eective solutions or more credible projectbids, enorceable Renewable Purchase Obligations (RPOs)and Renewable Energy Certifcates (RECs), strong fnancialstructures, increased domestic manuacturing, and reliablepower evacuation and transmission. Moreover, o-grid solarenergy, largely a missed opportunity so ar, is ripeor investment.

overAll FINDINGs

1. The sophistication o solar energy stakeholdersis increasing. However, a much greater degree ocoordinated stakeholder action is needed to unleash thesolar energy markets potential.

2. As an overarching policy ramework, the National SolarMission (NSM) aims to increase deployed capacity,enorce regulatory obligations or using renewableenergy, create a manuacturing hub in India, and

promote research and development (R&D) or newsolar technologies. These objectives will be achieved indierent time rames and thereore should be correctlyprioritized by the central government.

3. Inrastructure, policy, and market conditions are shapingIndias solar market dierently rom other solar markets.Unique attributes include the prevalence o ground-mounted solar parks, thin flm PV technology used inmore than hal the projects, and low bid prices that make

grid parity possible in the near uture.4. Overall, stakeholders viewed the reverse auction bidding

process as transparent and successul in driving downprices. However, fnancial institutions, civil societygroups, and some developers suggested that in orderto draw serious players with an ability to ensure projectcompletion, and attract fnancing, project selectioncriteria should be more rigorous. Moreover, or theMission to remain credible, fnancial due diligenceand continuous monitoring are needed to ensure thatcommissioned projects are operational at contractedcapacity and generating solar power that is transmittedto the grid.

5. Indian bankers still perceive signifcant risks in the solarenergy market and are largely hesitant to make substantialinvestments in solar technologies. Internationallenders, less risk-averse on the technology ront, oerlower interest rates but remain skeptical about projectcompletion. To bolster confdence among fnanciers, arange o unding channels, fnancial institutions, andother stakeholders must coordinate at program andproject levels and provide ancillary support, such as R&Dand skill development, to help the solar market mature.

STRATEGIC

LEVEL

SUPPORTING

ENVIRONMENT

P

ROJECT

LEVEL

NATIONAL SOLAR MISSIONe.g.

MNRE MOP

NVVN NTPC

IREDA

VARIOUS STATE POLICIESe.g.

Gujarat Karnataka

Rajasthan Tamil Nadu

NON-NSM NATIONALPOLICIESe.g.

RPOs RECs

DEVELOPERSe.g.

Azure Power Green Infra

Kiran Mahindra Welspun Solar

EPCse.g.

Lanco Infratech Mahindra EPC

Shriram Punj Lloyd

Tata BP Solar

FINANCIERSe.g.

Axis Bank Bank of Baroda

ICICI State Bank of India U.S. Ex-Im Bank

OPIC

FIGURE 1: A successful solar ecosystem depends on the effectiveness of various individual

enablers and stakeholders and coordination among these

PROJECT IMPLEMENTATION (bidding, selection, financing, commissioning, monitoring)

BROADER ENABLING ENVIRONMENT (infrastructure, policies, industry network)

RESEARCH AND DEVELOPMENT

COMMUNITIES

MANUFACTURERS (solar PV, balance of system) Domestic: e.g., Moser Baer, PLG Power, Tata BP Solar, Websol, EMMVEE

Various international

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6. State policies have contributed to boosting solarprojects in the past two years, especially in Gujarat andRajasthan. For Phase 2, the central government needsto increase collaboration with states to acilitate RPOand REC compliance, project bidding, fnancing, powerevacuation, transmission, and land acquisition.

7. While the domestic content requirement (DCR) hasgarnered international attention and raised concernsamong some oreign stakeholders, most developers donot identiy it as a major barrier to project development.The case or a robust domestic manuacturing base

rests on multiple objectives: energy security, technologydevelopment, energy access, ensuring productstandards, attracting oreign investment, and creating

jobs. Even so, many manuacturers expressed the viewthat the DCR, as currently structured, is not sufcientlystimulating local manuacturing. Manuacturers aceother systemic limitations, such as poor inrastructure,lack o raw materials, an undeveloped supply chain, andlack o fnancing.

8. Many developers have aced difculties in obtainingclearances to convert land use or solar projectdevelopment and encountered claims by other partiesto government-allocated land. In terms o inrastructure,

some developers have experienced difculties withpower evacuation and transmission lines to substations.Limited availability o skilled labor also remains a barrierto wide-scale project development.

9. To protect local interests and the environment,developers and government agencies need to increasecommunity involvement in the decision-making processrom project planning to operations.

10. All stakeholders agree that while Phase 1 ocuses ongrid-connected projects, o-grid solar energy providesan even larger opportunity. They state urther that

stakeholders should work collectively to develop bothpublic and private strategies or large-scale deploymento o-grid projects.

BANkABIlIty: FINANcING solAr eNerGy ProJects

In 2011, investments in Indias renewable energy marketsrose to approximately`51,000 crore ($10.3 billion),2 withmore than one-third o the investments directed to solarprojects. Investments are expected to double or Phase 2. Yetthe greatest challenge or solar energy is project fnancing.Even or smaller Phase 1 projects, developers struggled toraise capital rom multiple domestic, international, and sel-

FIGURE 2: rajaan and Gjaa, i a ndd i ig iadiain, dPa 1 inaain

Srce: SrGIS; Vris rerts cmig sr isttis

RAJASTHANBtc 1acted: pV - 100 MW, ST - 400 MW

Btc 2acted: pV - 295 MW

GUJARATBtc 1acted: ST - 20 MW

Btc 2acted: n/a

MAHARASHTRABtc 1acted: pV - 5 MW

Btc 2

acted: pV - 25 MW

KARNATAKABtc 1acted: pV - 5 MW

Btc 2acted: n/a

ANDHRA PRADESHBtc 1

acted: pV - 15 MW, ST - 50 MWBtc 2acted: pV - 20 MW

ODISHABtc 1acted: pV - 5 MW

Btc 2acted: n/a

TAMIL NADUBtc 1acted: pV - 5 MW

Btc 2acted: pV - 10 MW

UTTAR PRADESHBtc 1acted: pV - 5 MW

Btc 2acted: n/a

rajaan and Gjaa, i a ndd i ig iadiain, d

Pa 1 inaain

pV = tvtic

ST = sr term


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fnancing sources. While there has been some improvement,most domestic banks still perceive signifcant risks in solarinvestments. International and bilateral lending institutionsthat supported several Phase 1 projects remain interestedin supporting additional projects but want more rigorousproject selection requirements, such as balance sheets andvetted collateral. Well-structured RPOs, RECs, and innovativeunding mechanisms are opportunities or increasinginvestments in solar energy. In short, with major inormationgaps and potential market ailures, fnancial markets will not

automatically warm up to the solar market without strategicinterventions to create a fnancing ecosystem.

k Finding f Banabii

1. Indias high interest rates impede project development,especially as the costs o solar plants are largely in up-ront capital. Overseas fnancing is more attractive, bothor lower interest rates and or longer-term debt, whichmatch the longer payback period o solar loans.

2. Banks have a low comort level with solar investmentsbecause o the lack o inormation available, and needmore data and statistics on project development,

deployment, and perormance. They also needirradiance measurements rom local settings, which arecurrently not recorded.

: , . , , ,

, , : . . . , .

:

TABLE 4: A range of private and public institutions have a role in enhancing bankability and overall

solar market development

Indian Public Sector (non-bank) Financial Intermediaries:Reserve Bank of India; IREDA; Life Insurance Corporation

Non-Financial Supporting Institutions: Solar Energy Corporation of India;

Indian Banks Association; Solar Energy Centre; BEE; C-WET

Multilateral Funding Channels: International Finance Corporation; AsianDevelopment Bank; World Bank; Clean Technology Fund; Green Climate Fund (potentially)

STRATEGICLEVEL

INSTITUTIONAL EXAMPLES ACTUAL/POTENTIAL ROLE

Indian Banks: Axis Bank; Bank of Baroda; ICICI; IDBI; Indian Overseas Bank;State Bank of India

Non-Bank Financial Institutions: IDFC; Infrastructure Debt Funds

Overseas Funding: US-EXIM; US-OPIC; KfW (Germany);Multilateral Funding ChannelsP

ROJECTLEVEL

Other: Venture Capital; Private Equity (Domestic and Overseas);Other early stage investors

Priority sector lending; Concessional loans;

Long-term debt

Channeling funds; Information provision;

Skills; R&D; Component certification

Payment guarantees; Capacity building

(esp. due diligence); R&D

Lowering costs; Incentivizing investment;

Increasing market confidence

Additional revenue support to incentivize

investment

R&D; Skills development and training

Debt financing; Non-recourse project finance;

Innovative finance (such as IDFs)

Project finance; Support for market upscaling;

Bridging finance gaps

Concessional finance; Long-term debt

Market entry support; Market upscaling; R&D

Fiscal support: NVVN/NTPC (Bundling); CERC (FiT); MNRE(Payment Guarantee Scheme)

Market Mechanisms: Carbon Market (CDM and Voluntary Market);Renewable Energy Certificates

Other: Bilateral Funding; Private Companies; Educational Institutions;National Skill Development Corporation

ANCILLARY

MECHANISMS

ANDMEASURES

3. Financial institutions perceive solar energy in India asa riskier investment because it is a edgling industry

without a proven track record in meeting commissioningdeadlines, perormance benchmarks, and deliveringpower.

4. RECs represent an opportunity to support thesolar market, but regulators need to strengthen themechanisms or trading and enorcement sinceuncertainty about enorcement diminishes investor

confdence.5. Capacity building and networking among banks and

other fnancial intermediaries are needed to increaseinormation sharing and awareness within the fnancialcommunity. The Ministry o New and Renewable Energy(MNRE) has initiated activities toward awarenessbuilding and inormation dissemination, but much morecan be done.

k rmmndain f Banabii

1. Regulators should diligently enorce RPO mandates andthe REC market. National and state agencies should

work together closely to ensure eective RPO and REC

systems.

A ang f pia and pbi iniin a a in naning banabii and a a

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2. With the Reserve Bank o India and the Ministry oFinance, MNRE should encourage priority sector lendingor large-scale solar projects to help reduce lendingrates to as low as 10 percent and to provide higheremployment potential or downstream solar activities.

6.36

-

1.00

2.00

3.00

4.00

5.00

6.00

7.00

Polysilicon Wafer Cell Module Inverter Other Installation

~70%of value$

/W

Silicon PV value distribution*

Balance of system InstallationsSilicon ingots Wafers Cells Modules

~30%of value

15% TO 40% JOBS IN MANUFACTURING 60% TO 85% JOBS IN DESIGN, INSTALLATION, SALES, OTHER

FIGURE 4: More than half the jobs and value generated lie downstream of modules

. , : : . . . , : ,

. , : : . . . , : : . .: : . . .

*Based on unsubsidized value chain analysis of U.S. silicon PV market. Roughly similar value distribution for thin film technologies.

Source: GTM Research prepared for Solar Energy Industries Association (U.S.A), U.S. Solar Energy Trade Assessment 2011: Trade Flows and Domestic Content for Solar Energy-Related Goods and Services in the

United States.August 2011; European Photovoltaic Industry Association and Greenpeace, Solar Generation: Solar Electricity for Over One Billion People and Two Million Jobs by 2020 Sept 2006;EPIA, Greenpeace.

Solar Generation 6: Solar Photovoltaic Electricity Empowering the World. 2011; Rutovitz, J. and Atherton, A., Institute for Sustainable Future, University of Technology Sydney, Energy Sector Jobs to 2030:

A Global Analysis 2009; The Solar Foundation. National Solar Jobs Census 2011. 2011.

3. To provide longer-term debt, the government shouldenhance unding mechanisms, including the proposedInrastructure Debt Funds. To urther reassurefnanciers, MNRE should share inormation on thepayment security mechanism (PSM) and clariy how thePSM has been calculated to eectively cover potentialdeault on payment.

4. Government agencies and private groups should provide

solar resource and project deployment data as soonas they become available. MNRE and the Solar EnergyCorporation o India (SECI) should work with developersto establish monitoring and reporting processes that canbe implemented beore Phase 2. SECI should become acentral clearinghouse or all inormation disseminationrelating to the solar ecosystem. A sharing platormor improved irradiance data should be created todisseminate inormation as it is generated.

5. The Solar Advisory Panel and leading fnancialinstitutions should create a network o solar fnanceleaders to develop bank products that support solarenergy. Such a network could work together to syndicate

loans, share inormation, and conduct workshops wherebankers, developers, manuacturers, and entities inengineering, procurement, and construction (EPC) cancome together to exchange knowledge and experiencesabout solar investments.

MANuFActurING: suPPortINGA DoMestIc INDustry

Solar cell and module manuacturing oers India a long-term opportunity to become a major manuacturing player,accelerate grid-parity, and build a sustainable solar industry.The Missions Phase 1 domestic content requirementmandated local manuacturing o crystalline PV modulesor Batch I projects, and both cells and modules or Batch

II projects, while exempting thin flm PV. While most localstakeholders strongly avor domestic manuacturing policies,at this stage it seems that the DCR has been only marginallyeective in creating a vibrant domestic manuacturing base.

k Finding f Manfaing

1. Phase 1s domestic content requirement has contributedto shiting the market toward thin flm PV projectsdue to their exemption rom the DCR. Fity-percento Batch I projects use thin flm and crystalline cells, alarger proportion than in the global PV market. Batch IIprojects use even more thin flm technology, probablybecause Batch II requirements or domestic crystalline

M an af jb and a gnad i dnam f md


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cell manuacturing have made lower-priced, importedthin flm, oten coupled with low-cost internationalfnancing, more attractive to developers.

2. The Phase 1 domestic content requirement as currentlystructured has not eectively created the market

conditions or local solar PV manuacturing envisionedby the NSM. The DCR has not created a level playingfeld. Instead it has contributed to a strong thin flm biasand has possibly been a detriment to Indian crystalline-based manuacturing.

3. The Indian solar cell manuacturing system requiressystemic improvements in inrastructure, domestic low-cost fnancing, and raw materials.

4. More than hal the jobs in the solar value chain and valuecreation are not in solar manuacturing, nor specifcallyin cell and module manuacturing. Severe environmentalcosts linked to unregulated solar manuacturing also exist.

5. A modifed DCR could have a positive inuence ondomestic manuacturing i it is technology-neutral andnot overly restrictive.

k rmmndain f Manfaing

1. The central government, with stakeholder input, shouldexplore whether incentivizing policies with a broaderscope than solely cell and module manuacturing wouldcapture more value and create more solar jobs within theIndian context.

2. MNRE should tailor the DCR to be technology-neutraland market-enabling. MNRE could explore two options:(a) a DCR requiring that all PV modules be manuactured

FIGURE 5: The mix of PV technologies deployed in the Indian market is markedly different

from the mix deployed globally

*Based on information on 28 Batch I PV projects totaling 140 MW, as of January 2012, obtained from NVVN. **Based on a subset of 9 PV Batch II projects totaling 185 MW from publicly availableinformation and NRDC/CEEW conversations with developers as of February 2012. Note that developers can change technology until MNRE deadlines.

Sources: MNRE 5 Year Plan; GBI Research; PV News and GTM Research May 2011; European Photovoltaic Industry Association 2011; Down to Earth, National Solar Mission: bidders quote lowtariff, bag projects Dec. 7, 2011: http://www.downtoearth.org.in/content/national-solar-mission-bidders-quote-low-tariff-bag-projects; Hindu Business Line, GAIL, Mahindra, Welspun to develop

solar PV projects Jan. 2, 2012: http://www.thehindubusinessline.com/companies/article2769056.ece; Hindu Business Line, Solar mission: We wanted to send out a message, says Solairedirect

Dec. 7, 2011: http://www.thehindubusinessline.com/companies/article2695432.ece; The E conomic Times, Welspun Solar: http://economictimes.indiatimes.com/topic/Welspun-Solar;

Energy Alternatives India: http://www.eai.in/.

. . . .

GLOBAL: PV INSTALLATIONS

The trend toward thin film PV in India has

likely been caused by:

Unintended consequences of theDomestic Content Requirement (DCR)

Greater access of thin film technologies

to lower-cost financing DCR for silicon modules only DCR for silicon modules & cells

INDIA: PV INSTALLATIONS2010, 2011

(total ~325 MW)

Cumulative

(total ~67,000 MW)

Batch 1* (total 140 MW) Batch 2** (total 185 MW)

2010 TO 2011

(total ~44,000 MW)

14%

86%

14%

55%

50% 50% 59% 41%

45%86%

Thin film

Silicon

in India, uniormly enorced across all PV technologies,or (b) a DCR speciying that a certain percentage o solarPV components be manuactured in India.

3. To avoid being restrictive and to lessen the potentialor international controversy or trade disputes, MNRE

could consider incentives other than a DCR, such as apreerential tari, to promote domestic manuacturing.

4. Manuacturers should strengthen existing networks,such as SEMI, to explore ways to ease barriers tomanuacturing in India. The manuacturing networkscould develop policy proposals to address naturalresource, fnance, and trade limitations.

5. MNRE should work with the Ministry o Environmentand Forests to strengthen environmental saeguardsto ensure that manuacturing can continue to growrapidly while protecting community health and theenvironment.

eNABlING eNvIroNMeNt: FAcIlItAtINGlAND AcquIsItIoN, PerMIttING, AND PowerevAcuAtIoN

One o Phase 1s immediate goals is to create an enablingenvironment or solar technology penetration in India.In addition to the broader areas o bankability andmanuacturing, our discussions with stakeholders identifedour main causes or delays in project implementation: landacquisition issues, concerns with power evacuation, thelack o eective community involvement, and the lack o acomprehensive Solar Mission implementation plan.

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k Finding f enabing eninmn

1. Land acquisition issues, including siting, clearances,and grid proximity, are delaying projects. Currently, landcosts represent a small share o total project costs andare not the most signifcant barrier to land acquisition.

While in early stages, solar parks have proved to beeective in acilitating project development andreducing delays.

2. Several developers and fnanciers have identifed power

evacuation and access to the grid as issues o concern,and in their absence, it has been difcult to securefnancing or projects.

3. Developers are conused about which entity or agencyis responsible or last-mile inrastructure, resulting inproject delays.

4. Actively involving communities in every stage, romplanning to operation, will strengthen solar energyprojects. Project developers already recognize thatthere are co-benefts that can be shared with localcommunities and that problems can arise i localcommunities are not engaged throughout the process.

5. To enable industry progress, developers, banks, andother stakeholders have identifed the need or a long-term implementation plan that ocuses on the entiresupply chain, investment in research and development,labor orce training, and the provision o sufcient andcustomized fnancial incentives.

k rmmndain f enabing eninmn

1. The central government should closely andsystematically coordinate with state governmentson project allotment, land acquisition, and projectdevelopment, particularly or the larger Phase 2 projects.Specifcally, MNRE should work with states to developeective land allocation strategies or solar projects,including strategies to acilitate siting and planningrequirements.

2. MNRE should also collaborate closely with the Ministryo Power to plan or transmission inrastructure upgrades

within a long-term power planning ramework ocusedon scaling renewable energy.

3. Beore bidding or Phase 2 projects begins, MNRE anddevelopers should work together to resolve whether last-mile inrastructure costs should be included in projectestimates.

4. To strengthen solar projects, developers should integratelocal communities at the planning stage through regularcommunity meetings and engagement.

5. The solar industry should create a network o solar

energy groups ocused on resolving common industryconcerns, interacting with government agencies,developing solutions or the entire solar supply chain,investing in research and development, and increasingthe solar energy workorce.

sa pj and dpmn pin

Land

Ownership

Key Features Advantages for Developers Disadvantages for Developers

Developer

Purchased &

SPV Owned

prect deveer rcses d

d seci rse veice (SpV)

etit ws te d s sset

its bce seet

deveer exibiit i cice cti ccrdig t

sr resrce d ter sitig criteri

use d s rt cter r rect fce

oti se r reew t ed rect ie

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Cegig rcse rcess i d se mst

be cged, e.g., rm grictr t -

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Deveer s ressibiit r site de

diigece d ermittig

Lease by

Government

Gvermet rcses, cqires

r terwise ermrks d r

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lese erids tic mtc

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ermits

exibe gvermet icetives d eses

lesser exibiit i sitig d cice cti

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Icresed gvermet iterctis d

rcesses

Solar Park Gvermet r rivte deveer

rcses r cqires d

Sr rks s icde

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deveers d rvide dedicted

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Sr rks rvide ecmies sce i rcremet,

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1 MnRE ress sttemet, Geerti Sr pwer, Mrc 19, 2012, ib.ic.i/ewsite/mreeses.sx?micde=28 (503.9 MW Mrc 19, 2012; ccessed ari 2, 2012); Cmmicti

rm MnRE, Mrc 26, 2012 (criig 3 MW icrese t 506.9 MW); ntie obik pers, Idi Misses Sr Trget Wit 20-d jm i Ccit i yer, Bloomberg, jr 2012,

bmberg.cm/ews/2012-01-20/idi-misses-sr-trget-wit-20-d-m-i-ccit-i-er.tm (17.8 MW i 2010; ccessed ari 2, 2012).

2 2011 Wrdwide Reewbe Ivestmets Set Recrd, Todays Energy Solutions, jr 25, 2012, ietes.cm/wrdwide-reewbe-eerg-ivestmets-tes-012512.sx

(ccessed ari 2, 2012).

lookING AheAD: three PolIcy PrIorItIes

While the Indian government and solar energy stakeholdershave made signifcant progress, much more needs to bedone. Implementing three key policy priorities this year

would enable strong growth under the Solar Mission:

Benchmarks, Transparency, and Monitoring: There is anurgent need to increase the level o inormation availableon the Missions progress. The government should enorceperiodic updates on each projects progress, without

which its project selection process and due diligence willbe called into question. The government should adopt acommon defnition o commissioning as well as commonbenchmarks or commissioning projects under the state andnational Missions. Moreover, or fnanciers to become moreamiliar with technologies, and or component standards tobe closely monitored, project technology choices need to betransparent. Finally, irradiance data must be made publiclyavailable to increase confdence and investment in the solarmarket.

Strategic Financing: Central and state government agencies,with MNREs leadership, should develop a strategy tooptimize the roles o dierent fnancial institutions. As

the market matures, various institutions should leveragetheir expertise to grow Indias solar market. For example,certain groups should ocus on providing project fnancing,

while others should ocus on disseminating inormationto the market, and others should ocus on R&D and skilldevelopment. Only when a comprehensive fnancing strategyis in place will dierent fnancial interventions (e.g., prioritysector lending, development o the REC market, and the roleo inrastructure debt unds) succeed in scaling solar energyinvestments.

Technology-Neutral Manufacturing: To make domesticmanuacturing policies technology-neutral and market-

enabling, MNRE could explore the ollowing options: (a)a DCR requiring that all PV modules be manuactured inIndia, uniormly enorced across all PV technologies; or (b)a DCR speciying that a certain percentage o the solar PVcomponents be manuactured in India; or (c) a preerentialincentive to promote domestic manuacturing instead o aDCR to avoid being restrictive and to lessen internationalcontroversy.

The NSM has the potential to transorm Indias energysector and help power its rapid economic growth whilebuilding a sustainable uture. India needs continuedgovernment and private sector support, increasedinvestment in manuacturing, and increased technologysharing to unleash this potential in the Missions next phase.

The reports recommendations are submitted with a viewtoward promoting a comprehensive and strategic approachto building a robust grid-connected solar industry in India.

Ab cni n eng, eninmn and wa and Naa r Dfn cni

The Council on Energy, Environment and Water (CEEW) and Natural Resources Deense Council (NRDC) are

partnering to conduct an assessment o the National Solar Mission to accelerate clean energy solutions in India.

CEEW is an independent, not-or-proft policy research institution that works to promote dialogue and common

understanding on energy, environment, and water issues in India and elsewhere.www.ceew.in.

NRDC, a leading U.S.-based environmental organization, is working with partners in India on eorts to solve ourshared challenges o climate change and clean energy. www.nrdc.org/international/india.

Natural Resources Defense Council; Council on Energy, Environment and Water April 2012

Tis ct seet is srted, i rt, b Skti Sstibe Eerg dti. Te views exressed d sis i tis dcmet d t ecessrireect views te dti. Te dti des t grtee te ccrc dt icded i tis bicti r des it ccet

ressibiit r te cseqeces its se.

.nd.g/piPrinted on recycled paper

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NRDC India Solar Report Executive Summary Lowres