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ENERGY
Creating value,
partners in growth
LSI Financial Services is a leading provider of
innovative financial solutions to corporate India for
over a decade.
It has successfully raised funds for companies
through structured financial products, spanning
various sectors. With in depth domain knowledge,
LSI strives to add value to the client's financial
supply chain ensuring an effective and efficient
capital structure.
Issue Management
Financial Restructuring
India, the third largest producer and consumer of electricity, is currently facing an acute power shortage due to
scarcity of coal, which supports approximately 68% of India's installed power generation capacity.
Under the "Power for All" mission, India has set a target of 88,000 MW of installed capacity by the end of the 12th
Five Year Plan. The transmission segment has a major role to play in achieving this mission as an efficient
transmission capacity and network will be essential to transfer power from generating stations to distribution
networks. A combination of ageing infrastructure, rise in use of renewable energy sources, increase in demand
for electricity and a need to improve transmission efficiency together with energy security is driving growth in
the power sector.
As the world undertakes its journey towards development, growth and employment generation, it becomes
imperative to appreciate the looming ramifications of environmental degradation and ecological imbalances,
which are best reflected in carbon emissions. Growth in emission is directly linked to overall economic growth
and this linkage is unlikely to be broken in the years to come. At the same time, it needs to be acknowledged that
climate change is unequivocal and therefore, an international collective action is critical in driving an effective,
efficient and equitable response to this challenge. Therefore, it is necessary that all non-carbon emitting
resources become an integral part of an energy mix to ensure energy security to the country. Although
renewable energy technologies currently represent a fraction of the energy market in India, they have
tremendous potential for rapid growth and for providing alternative solution to fossil fuels. On account of varied
agro climatic zones providing abundant natural sources like sunlight, wind, flowing water and flora, India has
ample opportunities to shift to large scale use of new renewable energy sources.
With 5,000 TWh of solar insolation in India, it is one of the most abundant and freely available sources of energy
in the country. Properly tapped solar power has the potential to reduce the current energy peak deficit
significantly and improve power deficit situation. It is in this regard that the National Solar Mission is being
backed by ambitious Central and State solar policies under which various projects have already been launched.
The success of well laid State Policy is already showing desired results with Madhya Pradesh emerging as the
preferred State for new solar investments based on various incentives provided by the State Government. Riding
on such strong support from the Government, backed by concrete tangible measures, solar power is likely to
become the cornerstone of the energy sector in India and we expect the country to be one of the leading solar
power driven countries in the world.
As always, I seek your valuable comments.
Contents
1.
Renewable Energy
1.1
1.2
2.
Solar Power
2.1
2.2
12
2.3
13
2.4
15
2.4.1
15
2.4.2
16
2.4.3
19
2.4.4
Tariff
21
2.4.5
21
2.5
22
2.5.1
22
2.6
31
2.7
34
3.
36
3.1
36
3.2
37
3.3
37
3.4
37
3.5
38
4.
39
5.
42
6.
43
7.
Outlook
44
1. Renewable Energy
Wind
Small Hydro
Power (SHP)
Solar
Biomass
Break up of India's installed power capacity by fuel (as on March 31, 2014)
Nuclear
1.9%
Hydro
16.5%
Renewable
12.9%
Thermal
68.6%
Particulars
(%)
MW
Thermal
68.6
168,255
Nuclear
1.9
4,780
Hydro
16.5
40,531
Renewable
12.9
31,702
245,268
Total
Source: Ministry of New Renewable Energy (MNRE)
FY- 2014-15
Sector
Target
Achievement
Cumulative
Achievements
(as on 31.03.15)
2,312.00
250.00
251.61
23,444.00
4,055.36
100.00
45.00
1,410.20
300.00
360.00
3,008.35
20.00
1,100.00
3,770.00
8.50
1,112.07
4,089.18
115.08
3,743.97
35,776.96
Waste to Energy
10.00
21.78
154.47
80.00
60.05
591.87
Aero-Genrators/Hybrid systems
SPV Systems
0.50
0.61
17.95
60.00
6.15
0.27
4.00
-
152.05
2.53
0.80
Wind Power
Small Hydro Power
Biomass Power & Gasification
Bagasse Cogeneration
Waste to Power
Solar Power
Total
II. OFF-GRID/CAPTIVE POWER (CAPACITIES IN MWEQ)
60.00*
4.00
234.35
0.30
17.21
8.00
163.30
93.16
4.07
1,174.50
1.10
0.65
48.18
0.50
0.72
8.82
2312
Tagret
2000
Power Capacities (MW)
Achievement
2000
1500
1100 1112
1000
500
300
250 251.6
100
360
45
20
0
Wind Power
Small Hydro
Power
Biomass Power
& Gasification
Bagasse
Cogeneration
8.5
Waste to
Power
Solar Power
Source: MNRE
Tagret
80
80
Achievement
70
60.05
60
60 60
50
40
30
21.78
20
10
0
0.3
em
de
ys
yst
hy
cro
mi
ase
de
lls/
mi
sb
ter
Bio
-ga
Wa
roAe
Bio
4
l
s
em
VS
s/H
tor
ne
ra
Ge
Bio
ma
ma
ss
yst
yb
fie
ssi
Ga
ss
aga
n-b
(no
rid
rs
)
sse
y
erg
En
to
ste
Wa
0.5 0.27
ne
rg
0 0.61
SP
10
Source: MNRE
III. Cumulative Achievements of Ministry of New & Renewable Energy Programme/Scheme wise
Physical Progress in 2014-15 (During the month of February, 2015)
3,382.78
2.48
115.08
15.21
2,818.35
227.12
4.07
153.40
1,365.20
4,025.35
578.29
22,644.63
171.96
143.27
18.56
Wind Power
Waste to Energy
Bagasse Cogeneration
Aero-Generators/Hybrid Systems
SPV Systems
Waste to Power
Solar Power
Water Mills/Microhydel
Biomass Gassifiers
Source: MNRE
55,000 , 16%
31,702 , 13%
As of March, 2014
213,566 , 87%
290,000 , 84%
280,198
250,000
200,000
150,000
100,000
78,572
50,000
00
33,003
9,630 1,018
5,425
State
Ease of
Implementation
Small
Gestation
period
Demand
Driven
High
potential
Stable
long-term
returns after
mitigation of
Development
risk
Flexible
financing
options
according
to risk
return
profile
Phased
InvestmentPlatform
Style guaranteed
IRRs
2. Solar Power
Environment friendly
No fuel cost
40,134
40,000
MW
CHINA, 32%
30,000
20,000
10,000
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Eurpoe
APAC
Americas
China
MEA
RoW
CANADA-0.8
AUSTRALIA-0.8
ITALY-0.9
SOUTH AFRICA-0.9
INDIA-1.1
CHILE-0.8
FRANCE-0.8
ITALY-0.8
CANADA-1.0
INDIA-1.9
CHINA-13.1
CHINA-14.4
GERMANY-2.5
GERMANY-2.0
UK-2.8
UK-3.2
USA-8.4
USA-6.9
JAPAN-9.0
JAPAN-9.4
Source: IHS
Business Value of the Global PV Markets compared to GDP (% and Million US$)
2086
2200
1.0
0.8
1.16%
0.6
12.0
IA IUM RIA DA INA LIC ARK NCE NY ECE DIA AEL ALY AN DIA SIA ICO DS AY GAL KIA AIN EN ND NIA AN ND KEY
IA
A
B
A
AL TR
A
IT
JAP IN ALAY MEX RLAN ORW RTU OVA SP WED ERLA MA TAIW AILA TUR
CH EPU ENM FRA ERM GRE IN ISR
TR AUS ELG ULG CAN
S TZ
B B
E
N PO
R
RO
SL
M
D
G
TH
I
H
TH
C
E
SW
NE
CZ
S
AU
13700
580
3092
1091
340
698
235
18
106
0.2
120
142
960
13123
129
2230
3823
7932
1233
55
176
1274
20
503
0.2
680
2041
0.4
537
23220
UK AINE USA
R
UC
REC Scheme
Installed
Capacity (MW)
210
Rajasthan
Madhya Pradesh
185
Andhra Pradesh
95
State
Madhya Pradesh
298
Maharashtra
121
Maharashtra
185
Tamil Nadu
98
1354
2056
India Total
India Total
Total Installed Solar Power Capacity as on 11 June 2015: 4011 MW
India Total
601
Source: RE Invest
!
!
Lakshadweep
Chandigarh
West Bengal
Madhya Pradesh
347
Jharkhand
16
Uttar Pradesh
21
5
Uttarakhand
98
Tamil Nadu
Rajasthan
730
Punjab
17
31
Odisha
249
Maharashtra
31
Karnataka
Haryana
10
Gujarat
916
Delhi
Chhattisgarh
7
132
Andhra Pradesh
0
Source: MNRE
100
200
300
400
500
600
700
800
900
1000
Solar Target
Capacity
installed
during
CY2013
Installed
capacity
as on
December 2014
India
5.10
100 GW by FY2021-22
1.1 GW
2.3 GW
China
3.61
50 GW by CY2020
11.3 GW
18.3 GW
Japan
3.63
33 GW by CY2020
6.9 GW
13.6 GW
USA
4.68
4.8 GW
12.0 GW
Germany
2.90
3.3 GW
35.5 GW
Italy
3.81
23 GW by CY2017
1.5 GW
17.6 GW
Australia
4.16
23 GW by CY2030
0.9 GW
4.1 GW
South Africa
5.92
8.4 GW by CY2030
N.A
N.A
Thailand
4.95
2 GW by CY2022
N.A
360.0 MW
Morocco
5.40
2 GW by CY2020
N.A
N.A
Saudi Arabia
5.70
16 GW solar PV and
25 GW CSP by CY2032
N.A
N.A
Chile
4.62
1.5 GW by CY2025
N.A
3.6 MW
Countries
0
ia
Ind
ina
Ch
an
Jap
US
an
rm
Ge
lia
ly
Ita
rea
stra
Au
So
uth
Ko
nd
ila
a
Th
co
roc
Mo
Solar
Photovoltaic
(PV)
Technologies
Crystalline
Silicon
Thin Film
Silicon
Concentrated
Solar Power
(CSP) or Solar
Thermal
Parabolic
Trough
Solar
Tower
Linear
Fresnel
Reflector
Parabolic
Dish
Crystalline Silicon
4-5 acres
$0.61
73 82%
13 20%
25 years
11
Solar
Tower
Parabolic Dish
Linear Fresnel
20-25%
40-45%
N.A
N.A
Water requirement
(cubic meter per MWh)
2.9-3.5
2.9-3.5
Nil
2.8
300-400
500-1500
750
250-300
10-200
10-150
0.01-0.04
1-200
Maturity of technology
Commercially
proven
Pilot commercial
projects
Demonstrated
projects
Pilot projects
30-40
60-70
60-70
30-40
Annual solar-to-electricity
efficiency (net) (%)
11-16
7-20
12-25
13
CSP Technology
ir
tha
jas
Ra
mu
shm
a
&K
Jam
State
ra
esh
sht
ara
h
Ma
dh
Ma
esh
rad
P
ya
rad
P
hra
An
State
at
esh
jar
Gu
rad
ch
ma
Hi
P
al
ish
Od
esh
tak
rna
Ka
rad
P
tar
Ut
State
Rajasthan
142.31
Telangana
20.41
Nagaland
7.29
111.05
Chhattisgarh
18.27
West Bengal
6.26
Maharashtra
64.32
Jharkhand
18.18
Kerala
6.11
Madhya Pradesh
61.66
Tamil Nadu
17.67
Meghalaya
5.86
Andhra Pradesh
38.44
Uttarakhand
16.80
Sikkim
4.94
Gujarat
35.77
Assam
13.76
Haryana
4.56
Himachal Pradesh
33.84
Bihar
11.20
Punjab
2.81
Odisha
25.78
Manipur
10.63
Tripura
2.08
Karnataka
24.70
Mizoram
9.09
Delhi
2.05
Uttar Pradesh
22.83
Arunachal Pradesh
8.65
Goa
0.88
UTs
0.79
13
2.3.1. India's direct solar irradiation data and Development of Solar Energy Sector
! States
14
2012-13
301.15
824.09
11.75
75.5
NA
76.95
19.11
79
NA
NA
1387.55
2013-14
666.7
860.4
130
150
9.3
92.9
31.8
31
NA
NA
2208*
2014-15
1128
953
637
354
239
228
164
104
83
73
4000*
14
232
77
Financing
Options for
Solar Projects
Balance Sheet
Based Funding
Non Resource
Project Funding
Foreign
Funding
Exim Financing
Green Energy
Funds
Project Developer
Equity
Dividends
Special Purpose
Vehicle
Technology tie-up, EPC
Contracts, Technology
Guarantees
Solar PV
Solar Thermal
Debt
Debt Service
Accounts
Technology
Provider
Parameter
Leading Institutions
Preferential Tariff
Consumer, State
Discom or an other
large consumer
Technology
Capacity Utilisation
factor (CUF)
Solar PV
19%
Solar Thermal
23%
Unit
Detail
MW
%
Years
1
19
25
` lakh/MW
587.33
Tariff period
Debt
Equity
Total debt amount
Total equity amount
Years
%
%
` lakh
` lakh
25
70
30
411.13
176.20
Debt component
Loan amount
Moratorium period
Repayment period
Interest rate
` lakh
Years
Years
% p.a.
411.13
0
12
13.00
Equity
component
Equity amount
Return on equity for first 10 years
Return on equity 11th year onwards
Weighted average of ROE
Discount rate
` lakh
% p.a.
% p.a.
%
%
176.20
20.00
24.00
22.40
10.81
Fiscal
assumptions
Income tax*
33.99
Depreciation
%
%
5.83
1.54
O&M expense
Maintenance spare
Receivables
% of O&M expense
Months
%
Months
1
15.00
2
%
` lakh/MW
13.50
13.00
5.72
` lakh
11.00
Power
generation
Capacity
Project cost
Capital cost/MW
Financial
assumptions
Working
capital
Interest on
working capital
6
O&M
Power plant
(FY2015-16)
Total O&M expense
escalation
O&M Expense
(FY 2012-13)
Source: CERC
* We have assumed the income tax @ 33.99% despite the tax holiday of 10 years as the solar policy may change in subsequent years. As it
is, over the next few years, Corporate Tax shall be reduced to 25%, but several exemptions shall also be disallowed henceforth. The true
Tax Rates can only be understood after a detailed list of withdrawn tax exemptions is published.
17
2
3
Project cost
Capacity
Capital cost/MW
Debt component
Equity
component
Financial
assumptions
Working
capital
Fiscal
assumptions
Tariff period
Debt
Equity
Total debt amount
Total equity amount
Loan amount
Moratorium period
Repayment period
Interest rate
Unit
Detail
MW
%
%
Years
` lakh/MW
Years
%
%
` lakh
` lakh
Years
Years
% p.a.
1
23
10
25
1200.00
25
70
30
840.00
360.00
840.00
0
12
13.00
` lakh
% p.a.
% p.a.
%
%
%
360.00
20.00
24.00
22.40
10.81
33.99
%
%
5.83
1.54
Months
%
Months
1
15.00
2
13.50
` lakh/MW
17.72
5.72
` lakh
15.00
` lakh
Equity amount
Return on equity for first 10 years
Return on equity 11th year onwards
Weighted average of ROE
Discount rate
Income tax*
Depreciation
O&M expense
Maintenance spare
Receivables
% of O&M expense
Interest on
working capital
6
O&M
Source: CERC
Power plant
(FY2014-15)
Total O&M expense
escalation
O&M Expense
(FY2012-13)
18
67
804.00
20
240.00
Land cost
12.00
Site development
36.00
24.00
84.00
100
1200.00
Particulars
China
1.45-1.05
17,000
11-20
79-145
Spain
1.63
25,000
19
109
USA
1.77
25,000-60,000
12-21
117-239
Australia
2.41
27,330
14-21
127-191
Germany
1.63
60,000
11
226
Japan
2.66
50,000
12
439
1.53-1.61
11,063-14,750
15-20
87-137
India*
Type
59,907 - 68,265
24-28
201-490
6.00-10.96
61,574- 117,313
28-42
156-469
123-248
China
No storage
3.08-4.55
44,000- 45,000
24-28
India
No storage
2.0*
28,000*
23
19
Bank of Baroda
2500
3000
3000
15000
14700
5000
6000
6000
30000
30000
32500
6500
ICICI Bank
20000
4000
37500
7500
75000
15000
20000
40000
60000
80000
82500
90450
18
45000
190
134690
NBFC
Others
PSB
PvtSB
20
International Companies
PSUs
PvLCs
Railways
2.4.4 Tariff
Feed-in-tariff for the FY2015-16
Parameter
Solar PV
Solar Thermal
Levelised tariff
(without AD benefit)
(`/kWh)
Benefit of AD
(if availed)
(`/kWh)
6.86
0.67
6.20
12.05
1.25
10.80
Source: CERC
LCOE in PV ($/MWh)
79-145
123-248
109
156-490
USA
117-239
156-490
Australia
Germany
127-191
156-490
226
NA
Japan
439
NA
India
116*
178*
China
Spain
Open-Access Consumers
21
Andhra Pradesh
0.25%
0.25%
0.25%
Assam
0.25%
Bihar
0.75%
1.00%
1.25%
Delhi
0.25%
0.30%
0.35%
Himachal Pradesh
0.25%
0.25%
Kerala
0.25%
0.25%
Madhya Pradesh
1.00%
Maharashtra
0.50%
0.50%
Odisha
0.25%
0.30%
Punjab
0.19%
West Bengal
0.30%
1.50%
1.75%
2.00%
2.50%
3.00%
0.25%
0.50%
0.75%
1.00%
2.00%
3.00%
0.25%
0.25%
0.25%
0.25%
0.25%
0.25%
0.50%
0.60%
Chhattisgarh
0.40%
Target capacity
Target capacity
Phase I (FY2010-13)
Phase I (FY2013-17)
Phase I (FY2017-22)
1,100
10,000
20,000*
200
1,000
2,000
Total
1,300
11,000
22,000
22
State
NVVN
Batch I
NVVN Batch I
Solar Thermal
NVVN
Batch II
RPSSGP
Migration
Total
9.75
44.75
7.80
7.80
16.00
5.00
15.00
-
20.00
-
Karnataka
Madhya Pradesh
5.00
-
16.00
-
5.25
5.25
Maharashtra
5.00
7.00
11.00
-
63.50
5.00
-
40.00
-
5.00
Odisha
Punjab
2.50
-
6.00
2.00
8.00
50.00
-
270.00
-
12.00
467.00
6.00
35.00
-
Andhra Pradesh
Haryana
Jharkhand
Rajasthan
100.00
12.00
Tamil Nadu
5.00
Uttar Pradesh
5.00
-
7.00
12.00
5.00
5.00
4.00
4.00
140.00
52.50
330.00
90.80
48.00
661.30
Uttarakhand
Chhatisgarh
Total
11.00
Source: MNRE
23
Status of batch-I & II JNNSM (grid and off-grid projects) as on April 30, 2014
Projects
allotted
Schemes
CERC tariff
Lowest tariff
discovered
Nos
MW
`/kWhr
`/kWhr
30
150.00
17.91
10.95
470.00
15.31
10.49
13
54.00
30.00
78
98.05
25
340.00
Batch I
**Migration scheme-PV
Migration scheme-CSP
RPSSGP (off-grid)*
Batch II
PV projects through NVVN
7.49
Source: MNRE
*Rooftop PV and Small Solar Power Generation Programme (RPSSGP)
**The migration scheme refers to solar power projects under development before the advent of the National Solar Mission and which
moved under the mission guidelines later.
Chhatisgarh
Uttarakhand
Uttarpradesh
Tamil Nadu
Rajasthan
Punjab
Orissa
Maharashtra
Madhya Pradesh
Karnataka
Jharkhand
Haryana
Andhra Pradesh
0
50.00
100.00
150.00
200.00
250.00
Capacity in MW
Migration
24
RPSSGP
NVVN Batch II
NVVN Batch I
300.00
Proposed share of Solar PV and Solar Thermal atCentral/State levels during phase II:
Inter-technology targets at Central and State level
Item description
Ratio
Central Schemes
State Schemes
Solar PV
70%
40%
60%
Solar Thermal
30%
40%
60%
Ratio
Central Schemes
State Schemes
Solar PV
6,300
2,520
3,780
Solar Thermal
2,700
1,080
1,620
Total
9,000
3,600
5,400
The timeline for achieving the targets under the Central scheme is given below:
Target capacity matrix for phase II (MW)
Item description
FY2013-14
FY2014-15
Total
100
800
100
-
200
800
VGF
- PV
- CSP
750
770
1,080
1,950
870
1,080
1,520
1,080
3,600
2,520
1,080
Total
- PV
- CSP
1,650
1,650
MW
! Maximum aggregate capacity per company
Qualification criteria:
! Financial criteria: Net worth of the company
28
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
27.
Projects Allocated in MW
Part A
(DCR)
Part B
(Open)
Total
Part A
(DCR)
Part B
(Open)
Total
60
50
20
50
30
40
0
0
30
10
20
10
10
10
10
10
10
0
0
0
0
0
0
0
0
5
40
50
80
0
20
0
40
40
0
20
0
0
0
0
0
0
0
10
10
10
10
10
10
10
10
0
5
100
100
100
50
50
40
40
40
30
30
20
10
10
10
10
10
10
10
10
10
10
10
10
10
10
5
5
134
86
49
118
52
96
0
0
67
24
48
13
52
186
127
375
750
0
375
14
20
21
22
22
0
0
0
0
0
0
0
0
0
12
798
41
92
22
37
48
25
0
0
2
9
10
10
11
12
12
13
7
403
141
118
74
96
37
48
67
49
48
13
14
20
21
22
22
2
9
10
10
11
12
12
13
0
19
1201
Source: Resolve
29
Date
1.
Zero date
2.
3.
4.
5.
6.
7.
PPA signing
8.
Financing arrangement
9.
Commissioning of project
Sr. No.
Source: MNRE
NVVN Projects
Phase-I, Batch-I
Min CUF
Mean CUF
Median CUF
NVVN Projects
Phase-I, Batch-II
Standard Deviation
Source: MNRE
30
Max CUF
Min CUF
Mean CUF
Median CUF
Std. Dev
RPSSGP Projects
Phase-I (IREDA)
24.77%
0.18%
17.28%
17.79%
4.38%
NVVN Projects
Phase-I, Batch-I
26.50%
18.15%
20.36%
19.87%
2.04%
25.02%
16.58%
21.71%
22.53%
3.00%
NVVN Projects
Phase-I, Batch-II
24.82%
17.92%
21.35%
21.69%
1.81%
Notified on 12.02.2015
Notified on 18.03.2013
i) Notified on 01.07.2011
Notified on 25.11.2013
Notified in 2012
Notified in 2012
Notified on 27.06.2013
Notified in 2013
200
400
600
State Schemes
800
1000
RPO
REC
1200
1400
Private Initiative
1600
1800
2000
CPSUs
31
Solar
Rooftop
Target
Metering
Mechanism
Capping of
System Capacity/
generation
Eligibility
Incentives
Karnataka
(Govt. of Karnataka &
KERC)
400 MW
by 2018
Net metering
(excess electricity
to be billed as per
solar tariff)
Not mentioned
All consumers
Wheeling,
Banking and cross
subsidy surcharge
exempted for
10 years
West Bengal
(Govt. of West Bengal
& WBERC)
34 MW by
2018
Net metering
Injection not
more than 90% of
the consumption
from the licensee's
supply in a year
All consumers
Wheeling,
Banking and cross
subsidy surcharge
as applicable
Chhattisgarh
(Govt. of Chhattisgarh
& CSERC)
Injection not
more than 49% of
the annual net
generation
50kWp to
1 MWp
capacity
Tamil Nadu
(Govt. of Tamil Nadu
& TNERC))
350 MW
by 2015
Net metering
Capped
All consumers
commercially at 90%
of the electricity
consumption at
the end of the
settlement period.
Excess energy
generated beyond
the 90% cap shall be
treated as lapsed.
Wheeling,
Banking and cross
subsidy surcharge
exempted. VAT
exempted on
equipment's/
materials.
For domestic
consumers subsidy
of `20, 000 per
kW for 1 kWp
system is provided.
Wheeling, Banking
and cross subsidy
surcharge as
applicable.
Electricity tax is
exempted.
Kerala
(Govt. of Kerala &
KERC)
Not
specified
Net metering
Capacity shall
be in conformity
with the provisions
relating to the
connected load or
contract demand
permissible at each
voltage level as
specified in the
Kerala Electricity
Supply Code, 2014.
Not Specified
Wheeling,
Banking, open
access surcharge
exempted.
Exemption from
electricity duty.
Gujarat
(Govt. of Gujarat &
GERC)
30 MW in
6 cities
Feed-in tariff
Not mentioned
All consumers
Exemption from
wheeling, banking
and cross subsidy
surcharge.
Delhi
(DERC order)
Not
specified
Net metering
Capacity will be
All consumers
above 1 kWp and as
per sanctioned load.
For above sanctioned
load service line cum
development
charges to be paid.
Exemption from
wheeling, banking,
cross subsidy and
other charges
for a period of
5 years
Andhra Pradesh
(Govt. of Andhra
Pradesh & APERC)
Not
specified
Net metering/
Gross Metering
Capped
commercially at
100% of
the electricity
consumption in
a billing month.
State's 20%
subsidy for system
up to 3 kWp in
domestic sector
only. Exemption
from wheeling,
banking and cross
subsidy surcharge.
No charge for open
access for third
party sale.
Electricity duty
exemption,
VAT refund.
32
All 3 phase
service
consumers
Remarks
Mandatory
for all new Govt./
local body buildings.
For existing buildings
installation in
a phased manner
State (Issuing
Authorities)
Solar
Rooftop
Target
Metering
Mechanism
Capping of
System Capacity/
generation
Eligibility
Incentives
Remarks
Haryana
(Govt. of Haryana)
50 MW
till 2017
Net metering
Not specified
All consumers
10% state
subsidy in addition
to 30% MNRE
subsidy, exemption
from external
development
charges, scrutiny
fee and infrastructure development charges,
no application and
processing fee
Rajasthan
(Govt. of Rajasthan)
Not
specified
Net metering
Not specified
All
consumer(s)
of the
DISCOMs
Incentives
available to
industrial units
under Rajasthan
Investment
Promotional
Scheme available
to industrial solar
power projects,
Banking will be
allowed
RERC
regulatory orders yet
to be issued.
Uttarakhand
(Govt. of Uttarakhand
& UERC)
Not specified
All consumers
No transmission
and wheeling
charges
Net metering
Not specified
All consumers
20 MW
Uttar Pradesh
(Govt. of Uttar Pradesh) (by 2016- 17)
Punjab
(Govt. of Punjab)
Not
specified
Net metering
Maximum
capacity upto 80%
of the sanctioned/
connected load
with minimum
capacity of 1kWp.
All consumers
Odisha
15 MW
(by 2017)
20 MW
(by 2018)
Net metering
Banking of Energy
through a captive
solar power plant
shall be allowed on
annual basis.
Unutilized energy
during the year may
be paid as per rates
to be negotiated
between GRIDCO/
DISCOM and
the developer.
Banking charges
are applicable.
All consumers
At least 25% of
available plinth area
to be utilized for
rooftop. UPERC
regulatory orders yet
to be issued.
PERC
Regulatory order yet
to be issued.
33
Land/Site
Acquisition
Detailed
Project Report
and Business
Plan
Transmission
Agreement
Appointment
of O & M
Contractor
Clearances and
Approvals
Placing
equipment
procurement
orders and
signing
performance
contracts with
equipment
suppliers
machinery
! No objection certificate from Civil Aviation
Department
! No
35
3. Solar Parks
New Initiative for
Operational Excellence
Power Producers
Better Infra
Sharing of infrastructure
leading to Lower Overheads
Transmission
Companies
Cost effective to evacuate
power from a larger pool
Solar
Park
Contractor
Easier to mobilize
Ability to serve multiple
projects in same location
36
Investors / Lenders
Ease of Site Appraisal
(common appraisal for
multiple projects)
Particulars
% of the
Project Cost
Land
Site Development
- Roads (40 km 30m wide @ `1.2 Cr./km)
- Roads (30 km 15m wide @ `0.95 Cr/km)
- Land levelling/grading etc.
(5 million cu.m. @ `35/ cu.m)
- Water Supply System
0.00%
87.75
12.50%
230.00
32.80%
10.00
327.75
320.00
1.40%
45.70%
9.83
9.83
32.78
700.00
1.40%
1.40%
4.70%
100%
36.00
19.00
22.75
10.00
200.00
30.00
Milestone
Timelines
1.
2.
3.
4.
5.
Zero Date
?
Grant at the rate of up to `20 lakhs/MW or
30% of the project cost including Gridconnectivity cost, whichever is lower, which
will be released as per the following
timelines:
% of subsidy disbursed
Milestone
Date of issue of administrative approval
5
Land acquisition (50% land acquired)
20
Transmission plan finalization (internal and external)
10
75% of Land acquisition and start of work on transmission
20
Remaining to be disbursed based on progress and requirements of funds
35
10
Final Instalment
37
Source: MNRE
38
C
Integration
B
Balance of System
Source: FICCI
39
PV Modules
Thin Film
l
Inverters
l
Tractors
l
PV Cells
l
Silicon Wafers
l
Silicon Ingots
l
Poly Silicon
Reflectors
Receiver Tubes
l
Vacuum Tubes
l
Solar Turbines
Reflector Stands
Solar MirrorSteam Drum
l
Receive
l
Level Controller
l
Level Switch
l
Pressure Gauge
l
Pressure Switch
l
Valves
l
Piping
l
Pumps
l
Tracking System
l
PLC
Quality power
Low cost power
l
Solar manufacturing parks
l
l
Reflector Coatings
Absorber Coatings
l
l
Source: FICCI
Existing and Project Requirement of Equipment for Solar Farms and Off-Grid Solar Systems, 2012
Supply Chain
PV Modules
1,800 MW / Year
2,500-3,500 MW/year
3,500-6,000 MW/year
Solar Inverters
<100 MW/year
2,500-3,500 MW/year
3,500-10,000 MW/year
Trackers
- Single Axis (PV)
- 2 Axis for Thermal
NIL
NIL
2.5-3.5 Million
50%
50%
25 Million
50%
50%
Solar Batteries
Capacity meets the demand, 300-1000 MW
(For Off Grid Applications) however, cost and
maintenance is an issue
NIL
11 million square meters
Reflector Glass
in next 5 years
> 3000-5000 MW
Receiver Tubes
NIL
Solar Turbines
NIL
Vacuum Tubes
NIL
To be estimated
To be estimated
Source: FICCI
*Based on earlier assumption of Solar target of 20,000 MW by 2022 which has subsequently been revised to 100 GW as of June 2015.
40
41
35%
60%
17
17
122
MW/yr
MW/yr
MT/yr
MT/yr
MW/yr
Cell Demand
Water
Ingots
Polysillicon
TF mid share
456
3,191
3,754
176
1,451
434
413
56%
716
780
1,234
168
2,500
650
4,462
3,792
542
516
491
60%
780
3,250
TN 490 MW;
Gujarat
300 MW; AP 1000 MW;
Raj 100 MW;
Karnataka
Pun 300 MW;
70 MW;
UP 200 M;
Misc 400
MW (MP/ Bihar 150 MW;
TN/Orissa/ MP/Karnataka/
Orissa/
UP/others)
Misc 300 MW
770
10
2013-2014
2,000
800
2015-2016
1,500
600
2016-2017
1,541
1,618
2,329
2,445
17,262
11,420
9,707
1,467
2,218
14,673
65%
2,150
2,800
65%
3,250
2,150
14,872
12,641
2,107
2,007
1,911
65%
2,800
2,100
1,500
750
2014-2015
2,500
1,500
2018-2019
2,500
1,500
2019-2020
275
303
289
1,032
683
889
3,000
2,000
2021-2022
11,154
9,481
1,580
1,505
1,433
66%
2,100
3,000
14,607
12,416
2,257
2,150
2,048
65%
3,000
4,000
19,475
16,554
3,010
2,867
2,730
65%
4,000
4,000
667
953
1,270
1,270
19,475
16,554
3,010
2,867
2,730
65%
4,000
5,000
1,588
24,344
20,693
3,762
3,583
3,413
65%
5,000
5,000
Source: FICCI; FICCI Assumptions for demand forecast: Assume Water availability will constrain solar thermal plant growth, PV shares factored in total Solar above. State demand factored as a best case estimate as long run
forecast not available unlike NSM. However, expect solar expansion across all states over a period of time giving rise to a sustained demand at the state level, fuelled further by technology/ commercial breakthroughs to grid
parity. (For supply-chain, we have assumed that the installation inputs are 1 year staggered before the end user demand as timelines are scheduled for completion in Q1, calendar year). *Based on earlier assumption of Solar
target of 20,000 MW by 2022 which has subsequently been revised to 100 GW as of June 2015.
3,000
2,000
2020-2021
2,000
1,000
2017-2018
(Assumption: Aberration in batch 2 guidelines corrected by phase 2 NSM; 7 gm Poly-si/watt till 2015 & 5.5 gm Poly-si/wtt post 2018)
143
16
MW/yr
Module
c-Si Market
Share
160
435
25
MW/yr
716
460
Total PV
installation
(On & Off-grid)
-1yr shift
Gujarat
250 MW;
Rajasthan
40 MW;
Karnataka
10 MW;
50 MW
misc
Gujarat
300 MW;
20 MW
Rajasthan/
misc
Comment
MW/yr
366
320
State PV
Demand
Total PV
installation
(On & Off-grid)
-1yr shift
350
140
NSM PV
Demand
Unit
5. SWOT Analysis
of the Solar Energy Sector
in India
Strengths:
1. High growth industry with significant
future potential.
2. Sunlight is available in sufficient quantity
in many regions.
3. Proven technology with low operation &
maintenance cost, which is also scalable.
4. Availability of Government Incentives for
growth and expansion.
Weakness:
1. Owing to high capital costs, the business
needs external incentives to be
economically feasible, thus increasing
dependence on Governmental policies.
2. The capital intensive nature of the business
might favour larger businesses over smaller
ones.
3. The distributed and intermittent nature of
solar energy makes it difficult for utilities to
rely on Solar PV for their base load.
SWOT ANALYSIS
Opportunities:
1. Government's ambitious target and
attractive policies open up many avenues
for investment.
2. Opportunities exist all along the solar PV
business value chain, not just for power
plants.
3. Entirely new opportunities could open up
as there is high innovation in technology,
especially with reduction in costs in
future.
42
Threats:
1. The large scale up of capacity could face
distribution and evacuation challenges
due to inability to scale up transmission
on a similar scale.
2. Off-peak season reduces cash flow.
3. Industry is new, so finding skilled
workforce could be a problem.
4. Solar panels work only at 22 percent
efficiency, therefore achieving solar targets
could be difficult despite scaling up due to
the 'spike and ebb effect '(of day and night).
6. Companies Operating
in the Sector
A Glance
! Tata Power
! Indosolar
! First Solar
! NTPC
! GT Advanced Technologies
! Moser Bear
! SZ Topray Solar
! Motech Industries
! Lanco
! Conergy
! Reliance Power
! SunPower Corp.
! Topsun Energy
! Azure Power
! Welspun Energy
! Waaree Energies
43
7. Outlook
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