Status of PV Market in India Dec. 01, 2011 Moser Baer India Ltd. Moser Baer Solar Ltd. Tadao Kazuno, Manmeet Bagga, Ashish Jain & G. Rajeswaran MBSL modules in Japan
Contents Contents 1. The energy status in India 2. JNNSM (Jawaharlal Nehru National Solar Mission) 3. Grid connected opportunities 4. Off grid opportunity and its market potential 5. PV manufactures in India 6. Summary
Brief overview of the status in India The status in India
The status in India The status in India Population Growth The IMF expects the Indian population to grow by close to 200 million over the next 5 years (1,207 million in 2011) GDP Growth GDP growth should ensure higher per capita energy consumption going forward Energy Supply If forecast GDP growth rates of 8-10% are realised, energy availability must grow 7-9% p.a., higher than the historical average (5%) India will continue to be power deficient in the medium/ long term (2020-2030) Grid Infrastructure Given under-developed electricity grid infrastructure, challenges with traditional centralised power Solar has advantages as a distributed energy supply 4
Electricity Production Top 10 countries of electricity production in 2009 est. 4'000 3'500 Electric Production ( TWh ) 3'000 2'500 2'000 1'500 1'000 500 0 Source : CIA (Central Intelligence Agency )
Electrical power sources Power sources in India Electricity (GWh) 4'500'000 4'000'000 3'500'000 3'000'000 2'500'000 2'000'000 1'500'000 Others Wind Solar PV Hydro Nuclear Gas Oil Coal 13.77 % 1.77% 9.87% 4.11% India 0.00% 1.66% 0.24% 68.58 % 1'000'000 500'000 Coal Gas Hydro Wind Oil Nuclear Solar PV Others 0 India Japan Germany USA China Source : IEA (International Energy Agency ) in 2008
Electrical power consupmtion India s per capita consumption is far below world average Per capita consumption in 2004 (kwh) Sub Saharan Africa 478 India in 2032 India 618 2,471 South Asia 628 China Arab States Latin America and Caribean 1,684 1,841 2,043 44% of Households have no electricity at all 66% of Rural Households have no electricity at all World Average 2,701 OECD Countries 8,795 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 10,000 Source: Human Development Report 2007/08, IEA (2005), Key World Energy Statistics 2005 7
Electrical energy shortage India has been facing chronic energy shortages 120'000 100'000 80'000 60'000 40'000 20'000 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Peak demand MW) Peak met (MW) Peak shortage (MW) Source: Central Electricity Authority (CEA), Figures in MW
Electrical power shortage Peak shortage of electricity in % 18 16 Peak Shortage (%) 14 12 10 8 6 4 2 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Source: Central Electricity Authority (CEA), Annual Report 2009-2010
Solar holds huge prospects in India INDIAN PV INDUSTRY India has massive energy shortage 10-12% energy deficit ~13% (20%) peak deficit Rapid incremental demand due to high economic growth, 250+ GW of incremental capacity to be added in 10 years Peaking power is going to be in shortage for a long time (10+ years) Coal is the only available fuel source (cannot be effectively used for peaking) Hydro is limited, long development cycles Limited gas available (city distribution, fertilizer slotted for first allocation) India has unique peaking power profile High degree of peaking power (30+% of total) Daytime peak, low evening peak Seasonal summer peak Cost of peaking power at bus bar 10-15c/Kwh Coal 15-20c/Kwh Gas 20-25c/Kwh Liquid Fuel Transmission networks are inadequate, and add significantly to peaking costs Electricity availability has become a politically important agenda India Needs Energy Now!!!
India ranks high in the solar map of the world Solar situation in India With 300+ clear sunny days and ~ average solar incidence of 4 7 kwh/ m2/ day, India ranks high in the solar map of the world Source : McKinsey & Co. 11
INDIAN PV INDUSTRY Decline in prices of solar panels every year is accelerating penetration of solar form of energy Solar Product ASP* Though solar is the most expensive renewable resource, prices of solar panels are reducing every year, making this power source a competitive business sector in coming years *ASP: Average Selling Price Source: Renewable Energy In India: 2011, Unleashing the Potential of Renewable Energy in India, Morgan Stanley Research
INDIAN PV INDUSTRY JNNSM (Jawaharlal Nehru National Solar Mission in 2009)
Further, solar industry is now receiving policy support from the Government Indian National Solar Mission Opportunities INDIAN PV INDUSTRY Grid-Connected Utility Scale Plants Target ~20,000 MW Off-Grid Applications Target ~ 3,000 MW R & D Centers of Excellence Financial Support under PPP mode Demonstration Plants Target = 400 MW Domestic Manufacturing Target = 5,000 MW 2010 2013 = 2000 MW 2013 2017 = 6000 MW 2017 2022 = 20,000 MW 2010 2013 = 200 MW 2013 2017 = 1000 MW 2017 2022 = 2000 MW Focus on Efficiency, Costs, New applications & technology Solar Thermal plants (Parabolic trough, Central Receiver). Incentives for Manufacturing Solar Components; vertical integration According to the Jawaharlal Nehru National Solar Mission policy: Obligation for State Utilities to purchase solar power for 0.25% of their energy requirements, increasing by 0.25% per annum By 2022, 3% of the power requirement of the State Utilities must be from Solar energy Source: JNNSM, panchabuta.com Within the off grid component, there is a separate target of covering 20 million rural households with solar lights. This includes coverage under the Remote Village Electrification Programme (RVEP) wherein solar lighting is provided largely to off grid villages and is almost entirely funded by central grants. In addition, in other areas, where grid is available but power supply is erratic, solar lighting is financed through loans given by rural banks
INDIAN PV INDUSTRY One of the important objectives of the national solar mission is to promote domestic manufacturing Encouraging Domestic Manufacturing In The Country First Step: Use of domestically manufactured modules made mandatory under Rooftop PV Small Solar Power Generation Program Use of domestically manufactured modules made mandatory for Projects based on Crystalline Silicon technology in the first batch (2011) under grid connected applications Use of domestically manufactured cells and modules mandatory for all Projects in the second batch (2012) under grid connected applications Manufacturing incentives in Solar given only to 2-3 companies in India 20% of Investment. as a cash subsidy from govt. Income tax exemptions for 10 years; All input goods and services Tax free (import duties, sales taxes, VAT etc); No tax on sale of finished product
INDIAN PV INDUSTRY Grid connected opportunities
INDIAN PV INDUSTRY Recent developments Grid market is gathering momentum JN National Solar Mission is gathering momentum 304.5 MW already awarded under implementation 350 MW announced in August 2011 Sizes greater than 5 MW each More time to allow for financial closure 1000 MW at next stage Source: Press Articles, JNNSM, EPIA and MNRE, www.renewableenergyworld.com, Moser Baer Research
INDIAN PV INDUSTRY JNNSM batch 2 ( 2011-12) solar project selection guidelines announced Capacity of Each Project: Project capacity shall be at least 5 MW + 5% in case of Solar PV Projects and the maximum capacity of the Project shall be up to 20 MW± 5%. The plant capacity shall remain in multiples of 5 MW Number of Applications by a Company : The Company, including its Parent, Affiliate or Ultimate Parent-or any Group Company may submit application for a maximum of three projects at different locations subject to a maximum aggregate capacity of 50 MW Domestic Content: Solar PV Projects to be selected in second batch during 2011-12, it will be mandatory for all the Projects to use cells and modules manufactured in India. PV Modules made from thin film technologies or concentrator PV cells may be sourced from any country, provided the technical qualification criterion is fully met Source: Press Articles, JNNSM
INDIAN PV INDUSTRY Further, Government is launching schemes to help solar power producers arrange finances for their projects India's federal cabinet approved in June 2011 the allocation of $108 million toward a scheme to guarantee payments for electricity bought from solar power producers, as part of the government's efforts to encourage development of renewable energy The funds will be used as guarantee in case state-run power utilities and distribution companies default on payments for solar power The scheme will be implemented by the Ministry of New and Renewable Energy and NTPC Vidyut Vyapar Nigam Ltd. will be able to draw funds from the account as per the scheme's provisions Source: Press Articles
INDIAN PV INDUSTRY Also, reaffirmation of objectives to promote domestic manufacturing Encouraging domestic manufacturing in the country Use of domestically manufactured modules made mandatory for Projects based on Crystalline Silicon technology in the first batch ( 11) under grid connected applications Use of domestically manufactured cells and modules mandatory for all Projects in the second batch ( 12) under grid connected applications State policies too are expected to align with the Central Government policy
INDIAN PV INDUSTRY Recent developments State missions is taking off State Governments are announcing Solar Policies which are adopting solar as an integral part of the generation mix. Key states which have announced initiatives include: Gujarat Rajasthan Karnataka Haryana Andhra Pradesh Jammu and Kashmir Maharashtra A number of other states expected to announce their respective policies Initially, the private sector is expected to play a key role in the solar energy sector as it grapples with a new technology area and arranges financing Subsequently, central and state owned utilities will play a key role in the expansion of the solar farm generation capacity Source: Press Articles, JNNSM, EPIA and MNRE, www.renewableenergyworld.com, Moser Baer Research
INDIAN PV INDUSTRY A number of states have begun drafting policies post JNNSM to incentivize solar generation within their states (1/3) State Rajasthan Comments Developing a global hub of solar power of 10000-12000 MW capacity in next 10-12 years to meet energy requirements of Rajasthan and India Power projects would be developed in two phases 200 MW by 2013 and 400 MW additional capacity between 2013-2017 Gujarat Karnataka Gujarat has released a state specific solar policy with a target of installing 1,000 Mw solar power capacity by the end of 2012 and 3,000 MW in next five years The state has already signed PPAs for about 934MW Karnataka has published its updated solar policy, which includes a target for 350MW of solar projects by 2016 It is proposed to install 200 MW up to 2015-16, for the purpose of procurement by the ESCOMS (Electricity Supply Companies). The remaining 100MW will comprise projects under the Renewable Energy Certificate (REC) mechanism Karnataka will also continue to support programs like the National Solar Mission (NSM) and has set a combined target for a further 126MW of solar power to be developed by 2013 to 2014 through the NSM and the state s solar policy Procurement of 0.25% of total electricity consumed by ESCOMS from solar resources as per KERC Power Procurement Regulation 2011 Source: Press Articles
INDIAN PV INDUSTRY A number of states have begun drafting policies post JNNSM to incentivize solar generation within their states (2/3) State Maharashtra Comments Maharashtra has submitted a draft solar power policy to the state government which targets the development of 500 megawatts of solar power capacity over three years The government is framing the policy to promote solar power plants of 5 MW or more capacity in the state The state was also a part of the Centre s Jawaharlal Nehru National Solar Mission, under which 10 per cent of the solar power generation would take place in Maharashtra Delhi Andhra Pradesh Delhi government has come up with a Cabinet note for solar power units on rooftops of households in the Capital The policy proposal announced by the Delhi Chief Minister Sheila Dikshit, at a conference envisages a target of 20 MW over 3 years by house owners The state government is contemplating a comprehensive solar power policy as a large of solar power projects are in the pipeline in Andhra Pradesh In addition to that individual solar power firms have started operations at Fab City, a special economic zone near Hyderabad. Generation of around 3 GW of power is expected from these in next 10 years AP state government has further selected 22 companies under the rooftop and other small solar power projects schemes in the state for total capacity of 20 megawatts (MW) Source: Press Articles
INDIAN PV INDUSTRY A number of states have begun drafting policies post JNNSM to incentivize solar generation within their states (3/3) State Madhya Pradesh Comments 500MW during the operative period of the policy Minimum capacity of a large grid connected Solar Power Generator (SPG) for solar PV and Solar Thermal shall be 1MW each Jammu & Kashmir Jammu and Kashmir will generate 20,000 megwatts (MW) from solar energy by 2020, mostly in Ladakh region of the state. The ministry has sanctioned Rs.4,730 million to generate solar power in Ladakh Union Ministry for New and Renewable Energy has sanctioned Rs 1,300 mn to Jammu and Kashmir under an ambitious programme to generate solar energy and electrifying uncovered villages Solar plants for 69 hospitals with a total capacity of 1090 kilowatts are being set up in the state at a cost of Rs 300 million Under the remote village electrification programme, 262 un-electrified villages and hamlets in the state are being electrified Orissa Draft Solar policy for Orissa proposed target of 5000MW by 2020 : 1,000MW by 2015 and another 4,000MW by 2020 The vision document envisions an investment of approximately Rs.120 bn Through 2,500 million units of electricity generation, the state could save about 1.8 million tons of coal Source: Press Articles
Solar purchase obligation in various states INDIAN PV INDUSTRY Cabinet has approved modification of the Tariff Policy to include Solar Purchase Obligation S.No State SPO (per annum) 1 Andhra Pradesh 0.25 % (2010-11 to 2013-14) 2 Chhattisgarh 0.25% (2010-11 to 2012-13) 3 Gujarat 0.25% (2010-11), 0.50%(2011-12), 1% (2012-13) 4 Haryana 0.25%(2010-11), annual increase of 0.25% to reach 3% (2022) 5 Himachal Pradesh 0.10% (2011-12 to 2012-13) 6 Karnataka 0.25%(2010-11) 7 Kerala 0.25% (2010-11 to 2015-16) 8 Madhya Pradesh 0.40%(2011-12), 0.60%(2012-13), 0.80%(2013-14), 1%(2014-15) 9 Maharashtra 0.25% (2010-11 to 2012-13), 0.50%(2013-14 to 2015-16) 10 Manipur 0.25% (2010-11 to 2012-13) 11 Mizoram 0.25% (2010-11 to 2012-13) 12 Orissa 0.10% (2011-12) increasing by 0.05% p.a. to reach 0.30% (2015-16) 13 Uttar Pradesh 0.25% (2010-11), 0.5%(2011-12), 1%(2012-13) 14 Tripura 0.10% (2010-11 to 2012-13) 15 Bihar 0.25%(2010-11) increasing by 0.25% p.a. to reach 1.25% (2014-15) 16 Jharkhand 0.25% (2010-11), 0.50%(2011-12), 1%(2012-13) 17 Uttaranchal 0.25% (2011-12), 0.50% (2012-13) 18 Goa & UT 0.25% (2010-11), 0.30% (2011-12), 0.40%(2012-13) 19 Assam 0.05% (2010-11) increasing by 0.05% p.a. to reach 0.25% (2014-15) 20 Meghalaya 0.20% (2010-11), 0.30% (2011-12), 0.40%(2012-13) Market risk in India is well diversified as policies of different states will determine overall market. Hence, in this regards, India is like mini Europe
INDIAN PV INDUSTRY Tariff order for various States State Tariff (Rs/Unit) Comments Gujarat Rs 15 for first 12 years and Rs 5 from 13th-25th years Projects commissioned by 31.12.2011 Karnataka Rs 14.50 For projects whose PPA is signed before 31.03.2013 Chhattisgarh Rs 15.84 For projects commissioned on or before 31.12.10 MP Rs 15.35 Tamil Nadu Rs 18.45 For projects whose PPA is signed before 31.03.2011 and commissioned before 31.03.12 For small and rooftop Solar power plant (100 kw to 2 MW) commissioned before 31.03.13 Larger MW projects are not covered under this. Maharashtra Rs 17.91 For projects whose PPA is signed before 31.03.2011 and commissioned before 31.03.12 UP Rs 15 For projects commissioned on or before 31.03.11 Draft Order 26
India Generating Capacity (MW) INDIAN PV INDUSTRY India is posed for rapid growth leading to significant solar capacity creation According to the Jawaharlal Nehru National Solar Mission policy Obligation for State Utilities to purchase solar power for 0.25% of their energy requirements, increasing by 0.25% per annum By 2022, 3% of the power requirement of the State Utilities must be from Solar energy Solar Energy Capacity Requirement (MW) 2013 2022 ~200,000 ~425,000 ~3000 ~ 50 60,000 By 2022, India would need ~ 50 60 GW of solar energy capacity to meet the Solar Purchase Obligation! 70.0 60.0 50.0 40.0 30.0 20.0 10.0 0.0 The annual and cumulative solar PV market in India (In GW) 23.2 17.6 15.6 13.1 11.6 7.7 10.4 1.7 3.2 5.2 0.7 1.0 1.5 2.0 2.5 2.7 2.7 4.5 2011 2012 2013 2014 2015 2016 2017 2018 29.2 2019 44.8 2020 68.0 2021 Source: Internal Source & KPMG report Annual Solar Market ( GW ) Cumulative Solar Market (GW )
Off grid opportunities SOLAR OFF-GRID MARKET & APPLICATIONS
OFF-GRID APPLICATIONS India s Solar Market Segmentation Range Sweet Spot Applications TAM 0-250W 5-10W Rural Home Lighting, Street Lighting, Lanterns, Emergency Lights, Lighting Retrofits etc 20 million+ households, Remote Village Electrification program of MNRE covering about 10,000 villages 250W-5KW (offgrid) 1KW Residential, Small Commercial, SPV Pumps Entire Power back-up industry market, 4 million inverters per year 5-50KW (rooftop, off-grid) 3-15KW Big Commercial, Telecom Towers, Rural ATMs, Govt. Buildings 150,000+ rural telecom towers, 50,000+ rural ATMs 3-100KW (rooftop, grid connected) 3-25KW Big Commercial, Govt. Buildings 70% of commercial buildings in 2030 are to be built from now to 2030. >100KW, IPP, Grid-connected 100KW-1MW Independent Power Plants National Solar Mission 1000MW by 2013, 20,000MW by 2022 Source: Industry Presentation
INDIAN PV INDUSTRY Historically, off grid installations are dominating in the Indian PV market Solar Energy Potential Off Grid application accounted for >70% of total installations in 2009 Grid tied Roof Top Grid Connected Telecom Towers Off Grids Rural Electrificati on Power Plants 1% 35% 35% 20% 7% 0% 2% Off grid plants Solar pumps Street light Home light system Street Lighting Irrigation Pumps/ Lanterns Defence/ Army Charging Stations for E-vehicles 100% = 21 MW PV installations in India, consisted primarily of off-grid connectivity and small capacity applications, used mostly for public lighting, such as street lighting, traffic lighting, and domestic power back up in urban areas and small electrification systems and solar lanterns in the rural areas Source: Press Articles, JNNSM, EPIA and MNRE, www.renewableenergyworld.com, Moser Baer Research
INDIAN PV INDUSTRY Fiscal incentives continue for off-grid solar projects and is primarily driven by government Promotion schemes for off grid applications: For Solar PV power packs a 30 per cent capital subsidy and loan at 5 per cent on 50 per cent of the capital cost has been put in place. MNRE considered Rs 270 per watt (with battery) and 190/Wp(without battery) as the benchmark for extending a 30 per cent capital subsidy, which amounts to Rs. 81/Wp(with battery) and Rs. 57/Wp(without battery) in general areas. Also, PV crystalline silicon solar cells should be used In respect of home lighting systems of up to 200 W lighting with 2x100AH battery set, an estimated cost of Rs 60,000 was prescribed by MNRE. The subsidy on the same is Rs 18,000 and loan amount is Rs 30,000. Inverter based systems are also eligible for financing schemes To meet electricity requirements of un-electrified rural areas, a capital subsidy of up to Rs 150 per watt will be extended for mini local grids Individuals are eligible up to 1 kw (5 kw for water pumping schemes) capacity and commercial/non commercial entities are eligible up to 100 kw. Micro grids of up to 250 kw capacity can be set up Capital subsidy would be released to the banks upfront, on receipt of sanction of loan by the bank to the borrower The loan amount is repayable in monthly installments within 5 years. The banks will get refinancing of loan amount from NABARD (through IREDA) at 2 per cent Source: MNRE: Feb 2011
INDIAN PV INDUSTRY Recent developments..off grid poised to take off Even a small state like J&K has been allocated a generation capacity of 6,091 KW Key Highlights: MNRE has announced the off-grid solar PV projects selected in the first phase of the Jawaharlal Nehru National Solar Mission Under the JNNSM goals, the government plans to installed 100 MW off-grid solar power projects in the first phase ending 13 The 106 power projects with total generation capacity of 40.648 MW are located in 29 states and union territories The projects are divided into mainly four types power plants, street lights, PV pumps and home lighting systems/solar lanterns Power projects aimed at supplying power to telecom towers have also been selected Source: www.climate-connect.co.uk
INDIAN PV INDUSTRY List of tenders that were announced in April to August, 2011 S.No Month Tender Size (KWp) State 1 April Shri Mata Vaishno Devi Shrine Board, J & K 20 J & K 2 PEDA 50 Punjab 3 CREDA 383 Chattisgrah 4 MPUVNL 115.5 M.P 5 OREDA (Type-HLS & SLS) 900 Orissa 6 May Bihar State Electronics Development Co. Ltd. 15 Bihar 7 MP Forest Dept 900 M.P 8 Crime Record Bureau, Police Headquarters 460 M.P 9 Gurgaon Gramin Bank 56 Haryana 10 Airport Authority of India 100 Chattisgrah 11 Rajasthan Rajya Vidyut Prasaran Nigam Ltd 160 Rajasthan 12 June Chandigarh Administration 50 Chandigarh 13 Rites Ltd, Gurgaon 25 Haryana 14 West Central Railway 8.5 M.P 15 Central Electronics Ltd. 12 U.P 16 East Coast Railway 21 Orissa 17 Northern Railway 10 Delhi 18 IPGCL 262 Delhi 19 MEDA 65 Maharastra 20 Non-Conventional Energy Development Co. of A.P 41.5 Andhra Pradesh 21 Gujrat Energy Development Agency 714 Gujrat 22 July Gujrat Energy Development Agency 175 Gujrat J&K-165, Uttrakhand-55, Aruunachal-185, Sikkim- 40 23 ITBP 445 24 MP Forest Dept 900 M.P 25 Karnatka Power Corporation Ltd. 5 Karnataka 26 GAIL 34 U.P 27 Himurja 74 H.P 28 MPUVN (SSLS) 100 M.P 29 Northern Railway 10 U.P 30 August Western Railway 10 Gujarat 31 Uttar Bihar Bank 20 Bihar 32 NBCC (SSLS) 10 Delhi Total 6151.5 Source: Moser Baer Research
SOLAR OFF-GRID MARKET Rural India is facing a huge power shortage Rural Electricity Access Number of Unelectrified Households in India Key Highlights: Rural India is facing a huge power shortage that is disturbing the development of infrastructure and the growth of the economy in the hinterlands The power cuts are significant in rural and semi-urban areas as they bear most of the demand-supply gap to satisfy urban power needs. The growing gap could lead to a significant impact on industrial growth and economic development. Add to it the poor quality of power being delivered to rural regions. Though 80% of rural areas have been connected to electricity, less than 45% of rural households have access to electricity Greater than 70% of India s population is from the rural areas. Over 100,000 villages are still without electricity. There is a huge demand for electricity in rural India. This is growing at more than 20% per year Source: MNRE website, Renewable Energy In India: 2011, Ministry of Power
OFF-GRID APPLICATIONS Off grid applications are the most appropriate for a vast and rural country like India where the grid cannot be extended everywhere There is the successful example of Chhattisgarh where almost 900 village level micro plants are running on solar energy for the last 2 to 3 years This model can easily be extended to the neighboring states of Bihar, Jharkhand and Orissa where the conventional electricity supply in rural areas is similarly hindered Further, there is the example of Uttar Pradesh where one company has sold more than 110,000 solar home lighting systems. This can be amplified to cover all unelectrified households in the country. This is sought to be achieved by roping in regional rural banks through the National Bank for Agriculture and Rural Development (NABARD) - another welcome step Companies provide custom made solar solution for various sectors like, bank, telecom, rural development, education and roads & highways. Some of these segments, where installation services can be done in relatively small scale are: Telecommunication Sector - BTS (Base Transceiver Station) sites require constant and uninterrupted power for the safe operation of the network. Solar panels can be installed to generate the required power. Solar Water Pumps - Solar water pumping systems can be uses in a wide range of applications from livestock watering to remote home or village water supply and irrigation. Captive Power Generation Diesel-based captive power generation is used extensively in the country today to bridge power supply deficits and to overcome supply quality problems in industrial, commercial and domestic applications. These can be replaced with solar power Source: Solar_pv_value_chain.pdf
OFF-GRID APPLICATIONS A whole range of solar PV products is emerging in the offgrid sector A solar lantern could be a simple, cost-effective and environmentally friendly means of providing minimum lighting needs for the 28 million households that will remain un-electrified by the end of 2012 in India. Even so, as of March 2010, there are only 790,000 households that have a solar lantern Solar Home Lighting Systems consist of a solar PV panel, battery, charge controller and lighting system (lamps and fan). Depending on the PV panel size this system can power a lighting system ranging from a single lamp to several lamps and a fan or TV. This requires low ongoing maintenance except for a battery change every three to five years. In spite of generous support from the government, so far only 580,000 SHLS have been installed The rationale behind a microgrid is that by bringing the generation of electricity closer to the site of consumption, one can avoid the T&D losses of grid extension, especially in remote regions. Additionally, it can alleviate the demand supply gap and provide more reliable power to rural areas Almost 70% of India s population depends on agriculture either directly or indirectly. While 44% of the 140 million sown hectares depend on irrigation, the rest relies on the monsoons.24 Irrigation, therefore, is essential for good crop yield. Most electrical consumption in this sector goes towards operating pump sets for irrigation Source: Solar_pv_value_chain.pdf
Solar has been revolutionizing the energy scenario in rural India Solar Water Pumps Satellite Earth Station In Jammu And Kashmir OFF-GRID APPLICATIONS Solar water pumps are helping thousands of farmers reduce dependence on rain and also helping in increasing the number of crops. This has directly increased the wealth of farmers who were once suffering from the erratic power supply. PV systems have helped farmers do away diesel pumps that need recurring costs and maintenance Off-shore Platform Source: www.solarkmcanada.com, www.projectsmonitor.com, Off grid solar PV Programme
OFF-GRID APPLICATIONS Solar lanterns, Home lighting systems and Street lights are extending opportunities for education in rural India Solar Home Lighting System Source: www.solarkmcanada.com, www.projectsmonitor.com, Off grid solar PV Programme
OFF-GRID APPLICATIONS A number of opportunities are there even at urban areas, too Urban Applications and Highway Lighting Urban areas present opportunities for street and traffic lighting, the use of PV for billboards, Building Integrated PV (BIPV), PV installations in apartment complexes and private developer properties, where uninterrupted power is currently provisioned for, at prices much higher than grid electricity, through the use of diesel generator sets and uninterruptible power supplies based on battery storage Highway lighting, even in selected sections of the national road network, would improve visibility and road safety on India s expanding and increasingly important road transport network Cellular towers PV in apartment complex Highway lighting PV for billboards BIPV Source: The Solar PV Landscape in India, Press articles
Off grid market potential SOLAR OFF-GRID MARKET & APPLICATIONS
OFF GRID MARKET POTENTIAL Solar power is well suited in the agricultural pumping segment Solar-Powered Agriculture Pumpset Potential Solar-powered Agriculture Pumpsets potential = Potential from new demand in Agriculture category from 2017-18 (driven by government policies and availability of viable financing options) + Potential from existing agriculture demand from 2019-20 (driven by cost economics of solar power and the availability of viable financing options) The total connected load of agriculture pumpsets is expected to be in excess of 100 GW by 2020 Analysts believe that this could be a very large market for solar-powered pumpsets and could commence earlier than expected if the Government adopts an innovative execution model that provides scale to manufacturers to bring down costs and a viable service delivery chain to provide a reliable solution to the farmers The total solar-powered agriculture pumpset potential that could emerge in the period 2017-22 is ~16,200 MW from the agriculture category Source:, KPMG: The Rising Final Sun
OFF GRID MARKET POTENTIAL Strong demand for telecom towers in India brings about huge prospects for use of solar in telecom towers.. Phenomenal growth in mobile subscribers in India has created huge opportunities for the telecom infrastructure industry Data services such as video calling, mobile banking and mobile entertainment are expected to take off in a major way in 2011 Network coverage expansion by operators in the semi-urban and rural areas will also fuel the demand for towers 337,000 towers (c. 35% in rural areas and 65% in urban areas) Expected to reach 554,000 by 2015 Potential Solar Penetration Market (50% in rural areas and 20% in urban areas) = c. 103,000 towers Rapid expansion of wireless telecom and telecom companies' desire to reduce operating cost for base stations (due to diesel cost and losses in diesel pilferage) are expected to prompt growth in off-grid opportunities Source: IDBI Bank, Moser Baer estimates
OFF GRID MARKET POTENTIAL..As MNRE is incentivizing the replacement of diesel for telecom towers with solar PV Energy Consumption Of Telecom Firms Tower site is the single biggest energy consumer in the entire set up of a telecom firm as evident from the adjacent chart. It is estimated that switching from diesel to solar power would save Indian telecom firm INR 64,400 million in operations cost There has been a lot of activity in the cell phone tower space with Bharat Sanchar Nigam Ltd. (BSNL) awarding a tender for powering Cellphone sites using Solar Energy in Western Uttar Pradesh in India As many as 400 telecom towers will be powered by solar panels. The towers, which will get started in April in a INR 1200 million project under the Jawaharlal Nehru National Solar Mission (JNNSM) of the Ministry of New and Renewable Energy (MNRE), will kick off in Andhra Pradesh, Bihar and Uttar Pradesh and involve state-owned Bharat Sanchar Nigam Ltd and tower infrastructure firm GTL and Indus Towers Of the 400 towers, installed at INR 3 million each, 100 will be of BSNL. The ministry will subsidize about 30 % of the tower costs Source: IDBI Bank, www.panchabuta.com, Harnessing_Solar_Energy-Options_for_India-Full.pdf, KPMG: The Rising Final Sun
OFF GRID MARKET POTENTIAL Telecom towers are an attractive market for solar PV installations Today India has about 360,000 telecom towers that are likely to grow to 550,000 towers by 2015. Analysts estimate this number to grow further, though at a slower rate due to increasing tower sharing arrangements, to about 700,000 by 2020 Going forward, with increasing rural penetration, more towers would come in areas with limited / no grid availability As a result, if current diesel consumption trends continue, diesel consumption by telecom towers would grow from current level of about 2 billion liters per annum to about 3.5 billion liters per annum by 2020 If, gradually, 30 percent of this diesel consumption were to be replaced by solar power, this would imply a solar market potential as shown Source: KPMG: The Rising Final Sun
Solar residential rooftop has huge potential, too OFF GRID MARKET POTENTIAL High-end Residential Solar Rooftop Potential Non high-end Residential Solar Rooftop Potential The residential consumer category contributes to about 29 percent of the total Indian power requirement. This is expected to increase to 34 percent by 2021-22. Cost economics could drive the high-end residential consumers to adopt solar rooftops a few years before the actual grid parity. The residential consumption as the high-end is more than 200 units per month and the non-high end is less than 200 units per month Source: KPMG: The Rising Final Sun
For most commercial and industrial buildings, rooftop solar technology is the clear choice Commercial solar rooftop potential (MW) OFF GRID MARKET POTENTIAL 9 201 450 755 Cumulative Potential (MW) 2'627 2'047 1'551 1'128 3'303 4'088 4'996 6'045 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Why captive/rooftop solar systems make sense for these large facilities: Large, flat, relatively empty roofs top most industrial facilities, warehouses, and big-box retail stores, creating a solar-energy system's version of prime real estate. Low-slope commercial and industrial rooftops cover approximately 13-billion sq. yd. worldwide, enough to generate more than 800 gigawatts of electricity Companies are increasingly going to position themselves as green. Solar installations are visible and one of the most recognizable symbols of clean energy and environmental consciousness In an Indian environment of power uncertainty, the certain low cost of clean energy protects a company from volatile pricing for backup energy. Making the switch to generating power on-site from an eternally free source of energy-the sun-can bring certainty to operating costs for decades. A number of state and central tax rebate and credit opportunities are available for rooftop-solar systems Source: Moser Baer estimates, KPMG: The Rising Final Sun
OFF GRID MARKET POTENTIAL Analysts expect a 50 GW off-grid solar market potential, by 2020 Though India is primarily a thin film story, the huge potential in offgrid creates a huge market for Crystalline silicon technology too The solar PV off grid opportunities in India are huge, given the fact that over 400 million people do not have access to grid connected electricity The off-grid opportunities are significant, given the cost involved in off grid applications when compared to huge financial investments to be made to set up grids The examples of off-grid PV applications include remote village electrification, power irrigation pumpsets, telecom towers, back up power generation, captive power generation and city, street, billboard and highway lighting The potential of replacing huge usage of kerosene used for lighting rural homes makes off-grid applications desirable Source: ORF Solar Roundtable, 27 April, 2011
PV manufactures in India SOLAR OFF-GRID MARKET & APPLICATIONS
The production capacity of PV cells and modules manufactures in India (in MW) Companies Cell Module Future Plans Manufacturing location Solar Semiconductor 60 195 - Fabcity and Kompally (Hyderabad) XL Energy Ltd 120 192 - Fabcity (Hyderabad) Indosolar Ltd 160 - To be expanded to 360 MW by end of fiscal year 2011 Greater Noida, UP TATA BP Solar 84 125 - Bangalore Moser Baer 190 220 (C-Si) 50 (Thin Film) - Greater Noida, UP Titan Energy Systems ltd. - 100 - Hyderabad Photon Energy Systems - 50 - Hyderabad PLG Power 25 50 2011: 1) Expansion up to 150 MW in module manufacturing 2) Expansion in Cell manufacturing to 120 MW by 2012 Nasik (Maharashtra) 2012: Production of 1500 MT of poly silicon in Gujarat WEBEL SL Energy Systems 42 42 Plans of reaching the production capacity of 120 MW by 2012 West Bengal Surana Ventures - 40 Plans of expansion upto 60 MW Hyderabad Premier Solar Systems Ltd. - 30 - Hyderabad Reliance Solar - 30 - - Waaree Energy - 30 - Surat SEZ (Gujarat) Ajit Solar - 20 Plans to expand to 40 MW in next year Jaipur (Rajasthan) Access Solar - 18 - Hyderabad Kotak Urja Pvt. Ltd. - 15 - Bangalore Vikram Solar - 50 Plans to expand to 100 MW by 2011 Falta (West Bengal) USL Photovoltaics PVT Ltd. 6 10 - Coimbatore (Tamilnadu) Bharat Heavy Electricals Ltd 8 8 Fabcity (Hyderabad) KL Solar 27 12 - Coimbatore (Tamilnadu) TopSun Energy - 40 - Gujarat Maharishi Solar Technology 2.5 3 - Srikalahasti (Andhra Pradesh) & Noida (UP) HHV Solar 30 (C-Si) 10 (Thin Film) Bangalore Rajasthan Electronics & Instruments Ltd. 2 2 - Rajasthan Euro Multivision Ltd. 40 - Gujarat Andromeda Energy Technologies (P) Ltd - 30 - Hyderabad UPV Solar - Udhaya Energy Photovoltaics Pvt Ltd 12 12 - Coimbatore (Tamilnadu) Total 779 1414 Source: Company data Internal Analysis as on Oct 2011
Summary There are great potentialities in India PV market, but it looks like a little bit complicated and very price sensitive market.
Thank You! tadao.kazuno@moserbaer.in
Additional slides to support
Moser Baer Group 25 years of excellence Introduction to the Moser Baer Group Established in 1983 25 years legacy as India s leading technology manufacturing company 16,000 Employees Rs11,000 Crores in Assets (~$2.5Bn) Rs 16,000 crores (~$3.6Bn) under execution Global presence operating in 23 countries world wide Diversified portfolio of businesses Leadership position in most of the businesses.
Our Businesses - Manufacturing Storage Media Blank Optical Media World s 2nd Largest Optical Media producer Customers include worlds top OEMs Pioneering effort and leadership in Blu Ray Technology Solid State Media Product offerings range from Solid State media storage products (USB s/ Flash Cards), Personal Media Players, Gaming Consoles, Set-Top-Boxes etc. Solar Photovoltaic 230MW capacity (Crystalline Silicon and Amorphous Thin Film) being enhanced to 1GW in the mid-term Fully automated world class manufacturing facilities Products certified by reputed international agencies Entertainment Home Entertainment No. 1 Home Video Company in India with over 10,000 titles (~1/3 rd of Indian movies ever released) Disruptive pricing (~75 DVD) coupled with innovative distribution model Media and Entertainment Services Providing best-in-class in-house video / audio processing services like Compression and Authoring, Image Restoration, etc. Consumer Electronics Recently launched IT peripherals & Consumer electronics unit Leveraging Moser Baer brand and distribution strengths Products include DVD players, MP3/MP4 players, LCD TV s, etc.
Our Businesses - Development/Services Developing Developing 6800 MW of capacity Coal based in Madhya Pradesh, Chhatisgarh, Jharkhand and Andhra Pradesh Annupur, MP project is one of the fastest developed thermal projects in the country Developing Energy - Thermal Energy - Hydro 1000 MW of capacity in HP, Nepal and Arunachal under development; 3000+ MW projects under pipeline Miyar and Seli at advanced stage. Amongst lowest cost projects being developed Energy - Solar Developing 380 MW of capacity in Europe Commissioned projects in Nordendorf; Developing projects in Italy Sardinia, Pulia, Germany, France, Greece, Spain Developing 550+ MW in India; additionally 150MW in pipeline Coal Developing Sondhia Coal mine, in Chhatisgarh Fast execution expect coal production in 2012/13 EPC Strong EPC group with projects of over Rs.2500Crores (USD 550Mn) under execution Solar, Thermal, Hydro experience
Presence across the value chain Farms Long-term contracts with wafer suppliers 180 MW cell line 180 MW module, 50 MW thin film In-house engineering and execution team having alliances with leading German system integration companies India s leading pure play solar power development company with projects across India, Italy, Germany, France
Overview of Solar Farm Projects India As per MNRE (Ministry of New & Renewable Energy), solar projects are eligible for subsidized tariff (detailed in India Outlook) State Governments developing independent policies encouraging solar farms in addition to the National Policy Technology to be either Crystalline Silicon or Thin Film or Solar Thermal. 550 MW across 7 states under development. 150 MW in pipeline Europe: 380 MW of projects in various stages of development. 7.4 MWp solar PV park commissioned in Nordendorf A portfolio of 7 MWp ready for construction in Italy in Q1 2010 Developing projects in Italy Sardinia, Pulia, Germany, France, Greece and Spain Projects Under Development Gujarat Tamil Nadu Uttar Pradesh Orissa Karnataka Andhra Pradesh Chattisgarh Projects in Pipeline Madhya Pradesh Jammu & Kashmir Jharkhand Karnataka West Bengal Maharashtra Salient Features Central and State Government financial support for Solar PV sector Huge demand supply gap in Indian Power sector driving solar farms also Low gestation period Largest player in India and one among 10 in the Globe Diversified portfolio with projects spread across the country Experienced team with installed projects in India