bridge to india solar compass january 2012 teaser email

7/31/2019 BRIDGE to INDIA Solar Compass January 2012 Teaser Email

1/9 BRIDGE TO INDIA, 2011

INDIASOLARCOMPASSJanuar 2012 Edition

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BRIDGE TO INDIA, 2011Photograph courtesy Istock photo

Market DashoardA snapshot o the markets

undamentals

Latest Market InsightsAn analysis o the policies, projects,

industry and fnance

A Ke Question AnsweredIs the solar Renewable Energy

Certifcates market viable?

OutlookQuarterly projections or the Indian

solar market



1. Overview

2. Market Dashoard

2.1. India Market Compass2.2. Indian Solar Market Prices

2.3. Installed Capacit in India

3. Ke Findings

4. Policies4.1. National Solar Mission

4.2. Gujarat Solar Polic

4.3. Karnataka Solar Polic

4.4. Rajasthan Solar Polic4.5. Tamil Nadu

5. Projects5.1. New Installations Grid Connected

5.2. Status o Ongoing Projects

5.3. Execution Risks and Challenges

6. Financing

7. Upstream Industr Analsis7.1. PV Manuacturing Capacit in India

7.2. Expected Capacit Additions

7.3. Suppl Analsis

8. Ke Question:Is the Solar Renewale EnergCertifcates Market Viale?

9. Outlook9.1. Current Quarter

9.2. Longterm Outlook

10. Annexure10.1. Criteria or Project Allotment Under

Indian Solar Policies

10.2. Procedural Overview o

Indian Solar Policies

10.3. Glossar o Terms

CONTENTS



Figure 41: List o solar PV project winners oratch two o phase one o the NSM

Figure 51: Grid connected solar projects installedin the previous quarter Octoer to Decemer 2011

Figure 52: Spectrum o challenges in projectexecution in India

Figure 61: Loans sanctioned the USEXIM ankor solar PV projects in India

Figure 71: Current module manuacturing capacitin India (MW)

Figure 72: Current PV cell manuacturing capacitin India (MW)

Figure 73: Thin flm manuacturers in India

Figure 74: Expected crstalline module capacitadditions new plaers April 2012

Figure 75: Expected crstalline module capacit

additions existing plaers April 2012

Figure 76: Module supplies to India as o Decemer25th 2011 (nonexhaustive)

Figure 81: Status o Renewale Energ PurchaseOligation (RPO) in selected states (20102011)

Figure 82: Solar REC Floor and Forearance Price(per MWh)

Figure 83: Solar PV project viailit push with RECs

Figure 84: Histor o nonsolar REC market prices

Figure 85: Demand and suppl o nonsolar RECs

Figure 91: Projected quarterl PV installationsin India

LIST OFFIGURES



1. OVERVIEWThe previous quarter has seen PV

projects worth 350MW allottedunder batch two o phase one o the

Jawaharlal Nehru National SolarMission (hereon reerred to as the

NSM). A process o competitive biddingor the allocation o projects has seen

the eective price o solar in India allby 27.5% rom January 2011. The lower

taris have increased the pressureon developers that already aced low

margins in the highly price sensitivemarket. On the other hand, the allingprices have made solar increasingly

competitive in the Indian market. Itis now beginning to reach parity with

commercial electricity in dierentparts o the country, increasing its

viability independent o governmentpolicies.

Solar Renewable Energy Certicates

(RECs) continue to ace the challengeso a lack o long-term clarity on prices

and poor enorcement o statesRenewable Purchase Obligations

(RPOs). As a result, the solar RECmarket has seen limited demand

and almost non-existent supply.Depending on the business model,

selling RECs in addition to the incomerom a Power Purchase Agreement

(PPA),private or government backed,could provide an eective tari ar

higher than that under the NSM or anyother government policy. The lower

taris have brought into ocus the RECmechanism as a viable o-take or

projects.

Projects under both, the NSM and

the Gujarat solar policy, are acingdelays with regards to their completion

deadlines. The majority o the currentinstalled capacity has been achieved

by projects that have been delayedunder the Migration Policy o the NSM,

the Rootop & Small Solar PowerGeneration Programme (RPSSGP)

oered by the Indian RenewableEnergy Development Agency (IREDA)

and the Gujarat solar policy. Thedelays refect the challenges acedby the developers with regards to the

availability o nancing, high interestrates and tough execution challenges.

None the less, with the last quarterseeing the largest capacity addition

so ar, India is now emerging as aunctioning solar market.

The falling prices

have made solar

increasingly

competitive in the

Indian market.

Projects under both,

the NSM and the

Gujarat solar policy,are facing delays

with regards to

their completion

deadlines.



2. MARKETDASHbOARD

2.1 INDIA MARKET COMPASS

PV CSP

FiT M8.5 M10

Int Rate 13% 13%

Capex M77/W M120/W

Modules M46/W NA

BOS M31/W NA

Project Size 20MW 120MW

2.2 INDIAN SOLAR MARKET PRICES

B

RIDGETOINDIA,2011

BRIDGE TO INDIA, 2011

Source: BRIDGE TO INDIA




BRIDGETOIND

IA,2011

2.3 CURRENT TOTAL GRIDCONNECTED INSTALLEDCAPACITy - ALL INDIA




1. Competitive bidding o 350MWworth o PV projects took place in

December 2011 as part o batch

two o phase one o the NSM. Thissaw the average tari all by 27.5%to M8.7 (0.14)/kWh.

2. The lowest tari bid wasM7.49 (0.12)/kWh oered by

Solairedirect o France or a5MW project in Rajasthan. The

highest successul bid was M9.39(0.15)/kWh by Green Inra Solar

rom India or a 20MW project inRajasthan.

3. We estimate that project costsstand at M90m (1.5m) per

megawatt, making the lowertaris viable.

4. The Tamil Nadu government isexpected to oer solar projects

worth 50MW in the upcomingquarter. Meanwhile, bidding under

the Karnataka solar policy willtake place in January 2012 and the

Rajasthan solar policy inFebruary 2012.

5. The last quarter has seen acapacity addition o 101.5MW o PV

and 5.5MW o CSP in India.6. Not more than 40MW out o the

150MW o PV under the NSM willmeet the project commissioning

deadline o January 10th 2012.7. Not more than 51MW out o the

450MW o PV under phase oneand phase two o the Gujarat

solar policy had met the project

commissioning deadline at the timeo publication o this report.8. Land acquisition, local

inrastructure, data or siteassessment and supply o BoS

components are the key challengesin project execution in India at

the moment.9. Project nancing remains a key

challenge in the industry with themajority o banks requiring heavy

collaterals to provide debt.

3. KEyFINDINGS

10. A prohibitively high cost o debt inIndia has seen many projects avail

export credit nancing, available

at a signicantly lower rate ointerest. So ar, such nancing hasbeen available largely through the

US-EXIM bank.11. The current production capacity o

modules in India is about 1,200MWo which 1,130MW is crystalline

silicon and 70MW are thin lmmodules.

12. A majority o the PV projectsunder execution in India are using

modules rom oreign suppliers.More than 140MW worth o projects

have been commissioned in Indiain the year 2011; more than 80%

o these installations have usedimported modules.

13. Suntech and First Solar have thelargest share in the Indian market

exceeding 150MW each. Industrysources suggest that they oer

some o the lowest prices in India.14. The high foor price under the REC

mechanism makes it lucrativeas an o-take, compared to

government policies like the NSM.15. The REC mechanism can give a

viability push to projects looking too-set commercial and industrial

grid prices.16. The solar REC market is expected

to ollow the non-solar REC markettrend o rising demand and supply

over the short-term.

17. Based on our projections, weestimate that a total capacity o100MW under the NSM and 175MW

under the Gujarat solar policy willbe added by end-March 2012.



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Additional elements

Market Outlook & Projections or the year 2012 Key Question: Is the REC market in India viable?

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BRIDGE TO INDIA is a consultingcompany with an entrepreneurialapproach based in New Delhi,Munich and Hamburg. Foundedin 2008, the company ocuses onrenewable energy technologies inthe Indian market. BRIDGE TO INDIAoers market intelligence, strategicconsulting and project developmentservices to Indian and internationalinvestors, companies and institutions.Through customized solutionsor its clients, BRIDGE TO INDIAcontributes to a sustainable world byimplementing the latest technologicaland systemic innovations where theirimpact is the highest.

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