Executive Summary India Solar Market Update – Q1 2017

LEAD PARTNER

www.mercomindia.com

Lead Partner

Oriano Solar specializes in Solar EPC (Turnkey and BoS) for Utility Scale Solar Power Plants, Solar farms and Rooftops. Oriano

has executed 85+ MW of solar projects (including turnkey EPC for 23 MW single location utility-scale PV power plant in

Pavagada, Karnataka).

This includes 10+ MW of Rooftops for leading MNCs and India’s Top 100 companies across 7 states. Oriano has a current EPC

pipeline of 100+ MW Utility-Scale and 20+ MW of Rooftops.

Oriano was awarded “Energy Startup of the Year” at the Entrepreneur India 2016 Awards in media association with ET NOW.

Oriano was also selected as the “TECH30 company of the year” at TechSparks 2016 by YourStory.

Oriano Solar recently raised equity and venture debt from SIDBI Venture Capital.

Website : www.orianosolar.com

Email : contact@orianosolar.com

Phone no. : 9619571288

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India Solar Demand Forecast

6 12 172

2,133

4,036

9,032

180

275

780

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

0

2,000

4,000

6,000

8,000

10,000

12,000

2009 2010 2011 2012 2013 2014 2015 2016 2017F 2018F 2019F 2020F 2021F

Cu

mu

lati

ve In

stal

lati

on

s (M

W)

An

nu

al In

stal

lati

on

s (M

W)

Annual Rooftop Solar Installations (MW)

Annual Utility-scale Solar Installations (MW)

Cumulative Solar Installations (MW)

Source: Mercom India (Mar 2017)

India Solar Demand Forecast (MW)

4,311

9,812

2,313

9851,044998

• The Indian solar sector is seeing strong activity with cumulative

installations reaching approximately 12.8 GW at the end of Q1

2017.

• Utility-scale projects account for about 12 GW and rooftop

installations account for almost 850 MW of the installed capacity.

• Mercom is forecasting calendar year 2017 installations to reach

approximately 10 GW as India becomes one of the most important

solar markets in the world, after China and the United States.

• The pipeline for utility-scale projects that are under development is

currently at about 12.6 GW and there are approximately 6.4 GW of

tenders pending auction.

• Large-scale projects under the National Solar Policy (NSM or

JNNSM) lead in installations followed by states like Tamil Nadu,

Gujarat, Telangana and Karnataka.

• In terms of pipeline, most of the under development and tendered

projects are coming up under the NSM program in various phases

and batches, followed by projects under state policies led by

Telangana, Karnataka, and Madhya Pradesh.

www.mercomindia.com

All India Cumulative Utility-scale Solar Installations by Policy Type

0

200

400

600

800

1,000

1,200

1,400

All India Cumulative Utility-scale Solar Installations By Policy Type (MW)

Cumulative Solar Installations ~12 GW

Source: Mercom Capital Group (Dec 2016)Source: Mercom India (Mar 2017)

www.mercomindia.com

Policy Updates

12,00812,581

6,426

In-Operation Under Development Tendered

India: Utility-Scale Solar Projects by Status (MW)

Source: Mercom India (Mar 2017)

Policy Updates:

So far, 2.6 GW of solar projects have been commissioned under various phases

of (Jawaharlal Nehru National Solar Mission) JNNSM: Migration program (PV - 48

MW and CSP – 2.5 MW), Phase I Batch 1 (PV – 140 MW and CSP – 200 MW),

Phase I Batch 2 (PV – 330 MW) and Phase II Batch 1 (PV – 680 MW).

JNNSM - Phase II Batch 2 State Specific Bundling Program (NTPC)

The MNRE has specified 3,000 MW of PV projects under this program,

implemented by NTPC through open competitive bidding. These projects are

spread across states including Andhra Pradesh, Karnataka, Rajasthan, Telangana

and Uttar Pradesh.

JNNSM - Phase II Batch 3 (SECI)

Solar Energy Corporation of India (SECI) has called for tenders amounting to

2,510 MW under JNNSM Phase II Batch 3 - State Specific VGF Program.

JNNSM - Phase II Batch 4 (SECI)

Under this program 5,000 MW of grid-connected solar PV projects on a build, own

and operate basis with VGF benefits are to be developed. Tenders for 2,900 MW

projects under this program have been issued.

JNNSM - Phase II Batch 5 (SECI – CPSU)

Batch 5 targets 1,000 MW grid-connected solar PV power projects by the Central

Public Sector Undertakings (CPSUs) and the Government of India organizations’

self-use or third-party sale or merchant sale.

www.mercomindia.com

India Utility-scale Cumulative Solar Installations by States

0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500

Goa

Chandigarh

New Delhi

Assam

Bihar

Uttarakhand

Puducherry

Andaman & Nicobar

Himachal Pradesh

Kerala

Haryana

West Bengal

Punjab

Chhattisgarh

Gujarat

Odisha

Uttar Pradesh

Maharashtra

Jharkhand

Rajasthan

Tamil Nadu

Madhya Pradesh

Telangana

Andhra Pradesh

Karnataka

Projects Under Development

Projects Tendered, Pending Auctions

<100 MW

100-500 MW

500-1,200 MW

1,200-2,000 MW

>2,000 MW

Source: Mercom India (Mar 2017)

Solar Project Development Pipeline by State (MW)

www.mercomindia.com

Historical Average Module Spot Price Trends in China

0.30

0.35

0.40

0.45

0.50

0.55

Q1'2016 Q2'2016 Q3'2016 Q4'2016 Q1'2017

Indian Module ASP ($/W)

Chinese Modules ($/W)

Chinese Module ASPs in India are the Lowest in the World

Source: Mercom India (Mar 2017)

• Chinese module prices in India have continued to slide with average

selling prices coming to $0.32 (~₹20.68)/W in the first quarter of

2017, a drop of an 11 percent from $0.36 (~₹23.27)/W in Q4 2016.

• Chinese module prices have now fallen by about 33 percent in the

last 12 months, enabling the recent low bids of ₹3.30 (~$0.05)/kWh

and ₹3.15 (~$0.048)/kWh in Kadapa.

• The industry is expecting module prices to decline slightly in the

second quarter and a more pronounced decline in the second half of

the year after Chinese rush for installations slows down in June.

• Average Indian module prices were about 14 percent higher in Q1.

• Chinese tier 1 module ASPs were $0.30/W when we booked for

third quarter of 2017.

• Chinese tier 1 module quotes for Q4 2017 was in the $0.27-0.28

range.

www.mercomindia.com

Bidding Trends in Reverse Auctions

4.6

3

4.6

3

4.3

4 4.7

8

5.0

0

4.7

8

4.6

6 5.0

8

4.6

9

4.3

5

3.3

0

3.1

5

2.5

3.5

4.5

5.5

6.5

7.5

8.5

9.5

10.5

NSM

PI B

1 (

Mah

)

NSM

PI B

2 (

Raj

)

Od

ish

a B

1

Kar

nat

aka

PI

MP

PI

Od

ish

a B

2

Ch

hat

tisg

arh

Kar

nat

aka

PII

MP

PII

Pu

nja

b P

I (C

1)

Pu

nja

b P

I (C

2)

Raj

asth

an

UP

B1

AP

PII

Bih

ar

Kar

nat

aka

PII

I

Tela

nga

na

PI

Utt

arkh

and

UP

B2

Kar

nat

aka

PIV

-No

v 14

MP

PII

I-Ju

l 15

Pu

nja

b P

II (

C1)

-Feb

15

Pu

nja

b P

II (

C2)

-Feb

15

Pu

nja

b P

II (

C3)

-Feb

15

Tela

nga

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PII

G1-

Au

g 1

5

Tela

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PII

G2-

Au

g 1

5

UP

B3

-Sep

15

Pu

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b P

III-

Sep

15

Utt

arkh

and

(Ty

pe-

I)-N

ov

15

NSM

PII

B2

(AP

)-N

ov

15

NSM

PII

B2

(AP

)-D

ec 1

5

NSM

PII

B2

(Raj

)-Ja

n 1

6

NSM

PII

B2

(UP

)-Ja

n 1

6

Har

yan

a-Ja

n 1

6

NSM

PII

B2

(Kar

)-A

pr

16

NSM

PII

B2

(Tel

anga

na)

-May

16

Jhar

khan

d-M

ay 1

6

Kar

nat

aka

PV

(G

en)-

May

16

NSM

PII

B2

(Raj

)-Ju

l 16

Rew

a So

lar

Pro

ject

(M

P)

- Fe

b 1

7

NSM

PII

B2,

Kad

apa

(AP)

- A

pr

17

2010-11

2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18

Low

Tar

iff/

Bid

s (₹

/kW

h)

Low Tariff (₹/kWh)

Source: Mercom India (Apr 2017)

Note: AP Phase II - The range of first-year tariff offered by the successful bidders was Rs.5.25-5.99/kWh with a 3% per annum escalation for the first 10 years, then flat thereafter. MP: Rewa Ultra Mega Solar project - low bid of Rs.2.97/kWh tariff escalating at Rs.0.05/kWh for 15 years. Levelized tariff comes to Rs. 3.30/kWh.

Lowest Solar Bids in Reverse Auctions in India (₹/kWh)

www.mercomindia.com

India Solar Cell and PV Module Manufacturing Capacity

0

3,000

6,000

9,000

2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17

Solar Cell Capacity (MW)

PV Module Capacity (MW)

India: Solar Cell and PV Module Manufacturing Capacity as of March 2017 (MW)

MNRE Source: Mercom India (Mar 2017)

Installed capacity of domestic cells and modules in the country is estimated to be ~3 GW and ~8.4 GW respectively while operational capacity of solar cells and

modules is ~1.5 GW and 6.6 GW respectively as of March 2017.

www.mercomindia.com

Market Leaders

Our report includes top 10 market share rankings in MW for utility-scale project developers by installed capacity, utility-scale project developers by pipeline, inverter

suppliers by total capacity shipped, solar rooftop installers, Indian module and cell manufacturers with installed and operational capacity, module suppliers with cumulative

shipments, and top EPCs.

Top 5 Solar Project Developers

with Installed Capacity

Source: Mercom India (Mar 2017)

01Rank

02Rank

03Rank

04Rank

05Rank

Top 5 Solar Rooftop Installers

Source: Mercom India (Mar 2017)

01Rank

02Rank

03Rank

04Rank

05Rank

Top 5 Indian Solar Module

Manufacturers

Source: Mercom India (Mar 2017)

01Rank

02Rank

02Rank

02Rank

03Rank

Top 5 Solar EPC Players

Source: Mercom India (Mar 2017)

01Rank

02Rank

03Rank

04Rank

05Rank

www.mercomindia.com

State Policies

Updates: The government of Karnataka

announced amendments to the Karnataka

State Solar Policy 2014-21, increasing the

targeted solar capacity to 6,000 MW by March

of 2021.

Updates: The Andhra Pradesh Electricity

Regulatory Commission (APERC) has set the

state’s RPO for FY2017-2018 at nine percent,

of which the solar RPO is 3 percent.

Updates: The state government of Telangana

is expected to introduce an Equated Monthly

Installment (EMI)-based rooftop installation

program for individual consumers in the state.

Updates: The state recently concluded a 750

MW auction at Rewa Solar Park, where bids

reached a record low of ₹3.30 (~$0.494)/kWh

(levelized tariff over 25 years).

Karnataka

Andhra Pradesh

Telangana

Madhya Pradesh

Complete state by state updates are covered in our full report

Six states now have an installed solar capacity of over 1 GW, while the top ten states represent over 90 percent of the total installed capacity

1

Total Installations - 1,965 MW Total Installations - 1,721 MW Total Installations - 1,578 MW Total Installations - 1,439 MW Total Installations - 1,166 MW

Total Installations - 1,142 MW Total Installations - 904 MW Total Installations - 742 MW Total Installations - 406 MW Total Installations - 315 MW

Data from Mercom's India Solar Project Tracker

Karnataka

Gujarat Madhya Pradeh Punjab Maharashtra Uttar Pradesh

Telangana

Top 10 Solar States in IndiaState Ranking Based on Total Installed Utility-scale Solar as of Mar 2017

Andhra Pradesh Rajasthan Tamil Nadu1 2 3 4 5

6 7 8 9

12 GWCumulative Solar Capacity

2.5 GWSolar Installations Q1 2017

www.mercomindia.com

Table of Contents from Full Report

Key Findings…………………………………………………………………………………………..…………………. 5

Introduction…………………………………………………………………………………………..…………………. 7

Solar Tenders and Auctions………………………………………..……………..……………………………… 13

Policy Updates………………………………………………………………………………………………….……… 18

Other Policies …………………………….................................................................................. 23

Large-scale Solar Update by State…………………………………….……..................................... 26

India: State Rooftop Net-Metering Policies……………………………………………………………….... 33

Tariff and Module Prices ………………………………………………………….................................... 38

Funding and M&A Activity in Q1 2017............................................................................ 51

Policy and Implementation Risks………………………………………………………………..….............. 54

Rooftop Solar………………………………………………..…………………………………..……..................... 59

Market Share…………………………………………………………………………..……………....................... 67

Quarterly Opinion Survey…………………………………………………………………………..................... 77

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List of Charts/Tables from Full Report

India Solar Demand Forecast (MW)……………………………………………………………..……………….. 7Installation and Forecast by Market Segment (MW)……………………..………………………………. 9All India Cumulative Utility-scale Solar Installations by Policy Type (MW)………………..…… 10

India Utility-scale Solar Project Pipeline (MW) …………………………………………...................... 10India Utility-scale Solar Project Pipeline by Policy (MW)…..………………………...................... 11India Utility-scale Cumulative Solar Installations by States (MW) …………......................... 12

Solar Project Development Pipeline by State (MW)……………………………………….................. 13State-wise Solar Project Development Pipeline…………………………………………….................. 14Solar Tenders and Auctions in India from Oct 2016 to Mar 2017 (in MW) …..................... 15

Solar Auctions in Q1 2017 ………......................................................................................... 16New Solar Tenders Announced in Q1 2017………………….………………………..…...................... 17Utility-scale Solar Projects by Status (MW)………………………..………………..……..................... 18

Status of Projects Under JNNSM Phase-II, Batch-5, CPSU Program…………........................ 20Target for Solar Projects to be Developed by the Ministry of Defense……………………....... 2050 MW Solar Projects Under Canal Top Program…………………..…….…………….................... 22

50 MW Solar Projects Under Canal Bank Program………………………………………………………… 22Disbursement of Subsidy…………………………………….……………………………………………………….. 23India: State Rooftop Net-Metering Policies………..………………............................................ 33

Chinese Module ASPs in India………………………………………………………………...……................. 38Domestic Interest Rates for Solar Project Financing (%)…………………………..……….…..….….. 39Lowest Solar Bids in Reverse Auctions in India (₹/kWh)………………………..………………….….. 40

Rewa Ultra Mega Solar Project: 750 MW Auction Result………………………………………………. 42A Comparison of the Lowest Bids in Solar Reverse Auctions in India……………………..….….. 43India Imports and Exports of Solar Cells and Modules…………………..………………….…….….…. 44

Country-wise Breakdown of Indian Solar Imports (%) FY2016-17 (April to January)…….…. 44Country-wise Breakdown of Indian Solar Exports (%) FY2016-17 (April to January)…….…. 44

Solar Power’s Share of Total Electricity Generation in India (Billion Units)………………...…. 45Electricity Generation from Renewable Energy Sources (Billion Units)………………………….….45India: UDAY Timeline……………………………………………………………………………..…………….……... 46

Clean Environment Cess Fund Status…………………………………………………….………………….…. 49Ministry-wise NCEF Fund Allocation by Year………………………………………………….………...…. 50India Solar Funding and M&A Transactions (Q4 2016 – Q1 2017)……………………………..…. 51

Q1 2017 – VC Funding Activity in India………………………………………………………..…………….…. 52Q1 2017 – Debt Financing Activity in India…………………………………………………..…………….…. 52Q1 2017 – Announced Project Funding Activity in India…………………………………..……….…. 53

States With Payment Delays for Solar and/or Wind Projects………………………………..………. 54Solar RPO Deficit % by State FY2016-17…………………………………………………………………….…. 57Cumulative Solar RPO Achievements (2.75%) up to 2016-17…………………………….………….. 58

Benchmark Cost for Grid Connected Rooftop and Small Solar Projects for 2017-18………. 61Achievement-Linked Incentives Applicable to All Government Institutions……………….…. 62Various Incentives and Subsidies Available for Distributed Solar Rooftop Projects………. 63

Solar Cell and PV Module Manufacturing Capacity as of March 2017 (MW)……………….…. 65Top 10 Utility-scale Project Developers with Installed Capacity (MW)……………………….…. 67Top 10 Utility-scale Project Developers with Under-development Pipeline (MW)……...…. 68

Top 10 Solar Inverter Suppliers in India (Cumulative Shipments in MW)……….…………….…. 69Top 10 Solar Rooftop Developers and EPC Companies in India (MW)……………………………. 70Top 10 Solar Module Manufacturers in India…………………………………………………………….…. 71

Top 10 Solar Cell Manufacturers in India…………………………………..……………………………….…. 72Top 10 Utility-scale EPC Players with Commissioned Capacity (MW)………………………….…. 73Top 10 Utility-scale Third Party EPC Players with Commissioned Capacity (MW)……….…. 74

Top 10 Solar Module Suppliers in India (Cumulative Shipments in MW)…………..……….…. 75Most Active Solar Project Investors………………………………………………….……………………….…. 76

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