Solar PV Landscape in India*

Important Opportunities and Challenges

Mehul Raval

mehulmatrix@gmail.com

*Based on study by PV Group (an initiative of SEMI) in April 2009

Drivers for PV in India

• Rapidly rising primary energy & electricity needs• Persistent energy deficient situation, over reliance on coal for electricity

generation & oil/gas imports account for 7% of our GDP!• Tremendous potential for off-grid deployment: -> rural electrification/lighting, ->powering irrigation pumps sets, ->back-up power generation for expanding cellular towers, ->captive power generation, ->urban applications & highway lighting.• 100,000 jobs by 2020!• High investments on building and distributing electricity & associated

losses make PV attractive for captive generation.

(contd…)

• Primary energy demand to increase from 400 million tonnes of oil equivalent (toe) to over 1200 million toe in 2030.

• Consumption of electricity to grow from 660KWh/capita to over 2000KWh by 2032.

• India’s grid connected capability will need to increase from current value of 147GW to well over 460GW by 2030(PV installed capacity only 2.12MWp!).

• 1/3 rd of our population (over 450 million-estimated 80,000 villages) has no access to grid electricity.

• India’s National Electricity Policy aims at 1000KWh/capita/year by 2012, implies addition of 450 billion KWh of additional energy by then!

• 52% of India’s power generation from coal.• Life of coal reserves to reduce sharply to from 14 to 43 yrs by 2030.• Oil reserves to deplete completely in 20 years! • Extensive use of diesel & kerosene for captive power generation.• Abundant radiation between 4-7 KWh/day/sq.m with most part of country

enjoying 300 sunny days/yr.• Wind currently dominate renewable power generation(70% & 8GW installed

capacity in 2007), however India has a medium wind profile, low plant load factors & saturation of optimal locations are expected to make it less attractive then PV in future.

• Half a percent of India land(16500 sq km) brought under Solar PV can meet all the electricity needs by 2030!!

(contd…)

• Rs 10,000-20,000 crores are spent by Govt in subsidizing kerosene. PV systems can greatly improve the lighting quality & reduce health hazards. Extension to additional applications also possible.

• State govts subsidize electricity for irrigation between 30,000-40,000 crores.• Estimated 21 million irrigation pumps: 9 million run on diesel and 12 million on grid

electricity.• Electricity consumption by pumps around 10-15% of total consumption.• India’s irrigation pumps are believed to less efficient then those in use in other parts

of world.• 8 million mobile phone subscribers added in 2008 and over 200,000 towers added

across the country & 90,000 expected in 2009.• Majority are powered by diesel generator back-ups & so great deal of potential for

solar power solutions!• Diesel based power accounts for a sizable portion of 20-25 GW(2007-08) captive

power.• Urban areas present opportunities for street, traffic, billboards, BIPV, apartments,

private property.• Highway lighting would improve visibility and safety on India’s expanding transport

network. • With PV adoption, host of opportunities for smaller businesses, entrepreneurs in

sales/services/maintenence,/BOS supply chain.• MNRE promoting solar shops “Akshay Urja”-individuals avail soft loans & monthly

grants for selling and promoting solar products.

• “A solar revolution can untether the population from power lines just like the telecom revolution did the phone lines!!”

Current Electricity Generation in India

Case Study I: Aryavart Gramin Bank in UP*

• Bank needed reliable backup and so in 2006 installed PV systems in 5 of its branches to charge the batteries.

• Impressed by its reliability & ease of use, the bank realized its importance for rural electrification, many of whom had partial or no access to electricity.

• Initiated a program by which Solar Home System (SHS) of TataBPSolar where provided on loan schemes.

• 2 types of SHS: Venus I and Venus II(larger system).Both had CFL that could run from 4 to 8 hours, also supported mobile charger, dc fan,TV.

• Bank offered program to those with Kishan Credit Card(KCC) as they had established track record with banks w/o default.

• For Venus I, upfront payment of 2520,pay 11000 over 5 yrs at 12% interest & monthly installments of Rs 245.

• The monthly expenditure for SHS is lower then kerosene, which amounts to Rs 280 avg/house.

• Semi-literate youth appointed as facilitator & handles 100 homes, earns Rs 500/month and a bonus of Rs 4000/yr if the all systems are found working.

• By June 2008, 10,103 orders for SHS received and 8,007 were fully operational.

*www.ashdenawards.org/files/reports/a_graminbank_case_study_2008_0.pdf

Indian PV Market and Industry • Application spread of PV is wide compared to the global scenario in which

75% is grid-connected.• Lighting: Street Lighting, traffic signaling,domestic), Water

Pumps,Railways,Telecom,Govt departments,etc largest consumers.• Remote Village Electrification:4237/1142(Villages/Hamlets),Energy Parks:

516, Aditya Solar Shops:269.• 1000 MW of grid connected solar power plants,100MW of roof top & small

power plants & 200MW of off-grid applications in 1st phase by March 2013.• From recent data, total of 11 cell manufacturers and 20 PV module makers &

around 50 assemblers.• 70% of modules exported and this is likely to reduce due to JNNSM policies.

PV based systems Installations

Solar Street Lighting 54,795

Home Lighting 434,692

Solar Lanterns 697,419

Solar PV Pumps 7,148

Solar Power Plants 8.01MWp

• PV Module production around 1GW at end of 2009 & 400MW for cells.*

*India Renewable Energy and Solar Photovoltaic Market Opportunities for US Companies,www.ivgpartners.com

• Many players in the BOS equipments, who have a good background to supply in urban homes, industries, businesses.

• Need for improvement in reliability, quality and efficiency

Challenges for PV in India• Interplay between incentives and policy support on one hand and

technology cost-point reduction through industry innovations & scale will determine the PV landscape in India.

• Solar PV is transitional and transformational in Indian context. Well-suited for off-grid & small applications( because of our needs) and also at grid-connection level.

• Financing schemes, mandates and targets will push the former, while technology and right policy framework will drive the latter.

• To achieve growth of industries, standards play an important role by channeling development into real innovations and not supporting a fractionized segment of industry with custom specifications.

• Need for Standards: - PV Industry has been dominated by defacto standards or no standards at all. - No common PV specs exist between different government departments

like railways, telecom, MNRE and defence. Common spec should be framed based involving all stackholders and be made a part of Bureau of Indain Standards(BIS).

- Standards for quality, inspection, safety, testing and certification are important for improvement and adoption of PV.

- Environmental, health and safety standards should be established.

• Need for Focused, Collaborative, Goal-Driven R&D: - Comprehensive industry research roadmap needs to be evolved in

collaboration with universities & national labs with clear time-bound, technology & cost goals.

- The roadmap should encompass all the components of PV system.• Need for Financing Infrastructure and Models to spur utilization of PV: - Financing model need to cover the entire spectrum of products from rural

homes to enterprises implementing PV in power back up applications & grid connected deployments.

- Expanding PV manufacturing across the supply chain from silicon & wafer production to different components and equipments requires availability of robust & attractive financial schemes.

- Banking and leading institutions need to be familiarized about the promise and social/economic benefits of PV.

-Banking guidelines and policies will boost lending for PV & flow of funding to industry.

-Loan and financing schemes were the key for wide spread adoption of solar thermal systems. Similar models are needed for PV applications.

• Training and HR Development: - Pressing need to scale up the level of technical education in all aspects of

PV. - Technical Institutes, colleges and universities need to make a PV

curriculum, build infrastructure & create right courseware. - Certifications courses need to be created in PV technology (like CEP),

system, applications, installations & maintenance should be developed at training institutes.

• Intra-Industry Co-operation: - Information sharing, conferences & trade shows to share and diffuse new

products, learnings, best practices & technical problem resolutions. - Collaboration within BOS manufacturers to innovate, set targets, improve

quality/reliability & enhance the overall PV system efficiency. - Source of reliable market data, projections, trends, track production, sales,

adoption and effectiveness of PV products/solutions.• Consumer Awareness: - India has a diverse socio-economic distribution, which accentuates the

need. - More awareness about solar electricity, basics of installation, maintenance,

& larger benefits should be spread. - Facts and Figures about solar electricity need to be presented in a

accurate, clear and unbiased way. - Misconceptions about PV and its benefits should be highlighted. - Comparison with costs of diesel ,gas and other conventional fuel systems

should be made especially for captive and back-up power generation.

Recommendations• JNNSM should be operationalized National Action Plan for Climate Change

could be the starting point.• Evolve a comprehensive research roadmap for collaboration with

universities & national labs with clearly defined, time-bound, technology and cost goals.

• Focus on training and HR development with training institutes and universities.

• Roll out financial models & schemes to enable lending to all categories of PV customers.

• Evolve banking guidelines and lending policy measures.• Expand rural electrification for example by diversion of kerosene subsidy. • Large scale deployment of solar based irrigation pumps & offset those

based on diesel/kerosene or electricity. Irrigation subsidies to be diverted in this direction.

• Issue mandates and guidelines for PV power back-ups in cellular base stations.

• Increase maintenance budget of govt projects to ensure long term success of the projects. Create clusters of PV projects in areas to achieve better monitoring and technical support.

• Mandate use of renewable energy sources in captive power generation.

• Chalk out plans to upgrade the power grid with feed-in from solar farms.

• Identify regions and lands suitable for solar farm installation to streamline and accelerate land acquisition.

• Review and re-work current Generation Based Incentive Schemes of MNRE in collaboration with industrial representatives to motivate greater investor interests.