solar power component manufacturingproject type guidelines issued status off grid &...
TRANSCRIPT
RajasthanSolar Power
Component Manufacturing
Investment Brochure
Rajasthan
Delhi
INDIA
Mumbai
Rajasthanat a Glance
Area 342,239 sq km
Largest State in India
Location North-western India; shares domestic borders with Punjab, Haryana, Uttar Pradesh, Madhya Pradesh and Gujarat
Population 66.3 million (estimate 2011)
Capital Jaipur
Time Zone GMT + 5 hours, 30 minutes
Districts 33
Share of India's GDP 4.3%
The National Solar Mission (NSM) was formally launched in January 2010 by the
Government of India (GoI). Launching the mission, the Prime Minister of India, Dr.
Manmohan Singh emphasized the importance of solar energy by stating that in
India’s renewable strategy, the sun should occupy center-stage, literally being the
original source of all energy. In addition to achieving environmentally sustainable
growth, the NSM is also of significance for enhancing India’s energy security.
The objective of the solar mission is “to establish India as a global leader in solar
energy by creating the policy conditions for its diffusion across the country as
quickly as possible.” The mission has set out phased targets for off-grid as well as
grid connected solar power through to 2022. The Figure below reveals the phase
wise development on grid and off-grid capacity addition under the three phased
mission.
OverviewSolar Industry in IndiaNational Solar Mission
Off Grid
Grid connected
Cumulative installed solar capacity envisaged under NSM
Source: National Solar Mission
FY13
FY17
FY22
200
1,00
0 2,00
0
1,00
0
4,00
0
20,0
00
The GoI has put in place a robust mechanism for assured off-take
of solar power generated through grid connected projects under
Phase I of NSM. NTPC Vidyut Vyapar Nigam Ltd (NVVNL) has been
identified as the nodal agency that will purchase power from the
solar power project developers. This will be bundled with
electricity from equal capacity conventional power and sold to the
distribution utilities. The Government has also set up a solar
payment security fund (INR 4,860 million or US$ 108 million) to
address the risk of default in payment by the distribution utilities
involved in the mechanism.
Feed in Tariff (FIT) for power from solar photovoltaic and solar
thermal power plants is announced by the Central Electricity
Regulatory Commission (CERC) on an annual basis. The tariffs for
the financial year 2011-12 have been set as INR15.39 (US$ 0.342)
per kWh for solar PV and INR15.04 (US$ 0.334) per kWh for solar
thermal. Given that a large number of entities are likely to apply for
the projects, the Government may allocate projects on discounted
tariffs to applicants. In the case of rooftop solar PV and other small
solar applications, the mission provides for generation based
incentives. For off-grid and decentralized solar applications, the
NSM provides incentives through a combination of a 30% subsidy
and a 5% interest bearing loan.
Solar PowerOff-take and Tariffs
The RPO policy is to ensure that the Electricity Distribution Utilties
purchase a portion of their electricity from renewable energy
sources. RPO target for the distribution companies of a state is
announced by its State Electricity Regulatory Commission (SERC).
SERCs are gradually assuming solar-specific obligations within the
overall RPO announced by them for their state. The NSM policy
document envisages a target of 3% for solar RPO by 2022. A report
by Ernst & Young published in 2010 estimates that taking a target
range of 2%-3% solar RPO, India would need around 17GW-26GW
of solar power by 2022, which substantiates the NSM target of
20GW.
The RPO policy is supported by a Renewable Energy Certificate
(REC) mechanism which is similar to the carbon credit mechanism.
The REC mechanism enables a distribution company with a
shortfall in renewable energy installations to meet the shortfall in
their RPO (solar and non-solar) targets by buying RECs from
renewable/solar power producers. The REC trading on CERC
approved power exchanges, Indian Energy Exchange (IEX) and
Power Exchange India Limited (PXIL), was launched in the first
quarter of 2011.
Renewable Purchase Obligation (RPO)to Fuel Growth
Subsequent to the announcement of the NSM, the GoI has already
approved the migration of 16 ongoing solar power projects
totaling 84MW to the NSM. Rajasthan accounted about 11 projects
worth 66 MW under the migration scheme (8 Solar PV of 36 MW
and 3 Solar CSP of 30 MW). The Government invited applications
for new projects under three main categories.
Allocation of Projects
New Projects Application Response
Project type Guidelines issued Status
Off grid & decentralizedsolar application
Rooftop solar PV andsmall scale solar powerRPSSGP (under IREDA)
29 projects(totaling around 20MW)
80 projects(worth ~98MW) have
been sanctioned
Grid connectedsolar power (PV and CSPunder NVVN for Phase I)
June 2010
June 2010
July 2010 andAugust 2010
Batch I: 30 PV power projects of total capacity 150 MWp and 7 solar thermal power projects of total capacity 470 MW have been sanctioned.Batch II: Over 218 proposals received of over 2500 MWp
Source: MNRE, IREDA, NVVN, National Solar Mission, Government of India
NVVN selected 37 companies to develop solar power projects
under Phase-1 of the NSM, based on reverse bidding. The winning
bidders offered discounts of around 30–40% for solar PV and
around 20–30% for solar thermal projects over the respective CERC
determined base tariffs. 30 companies will be setting-up 5 MW of
solar PV projects each, totaling 150 MW. On the other hand, 7
companies will set up 470 MW of solar thermal plants.
In addition, the Indian Renewable Energy Development Agency
(IREDA) sanctioned 98MW of solar PV capacity across 80 projects.
These projects are part of the 100 MW rooftop solar PV and small
solar projects (RPSSGP) under Phase-I of the mission and are
separate from the projects under NVVN.
Another significant development pertains to the launch of a
capital subsidy-cum-refinance scheme under the NSM by the
National Bank for Agriculture and Rural Development (NABARD)
aimed at promoting installation of off-grid solar applications by
providing financial incentives such as capital subsidies and soft
loans, to the various individuals or groups intending to replace
non-renewable energy systems with solar powered ones.
The Indian Government is intent on executing the NSM in a timely
and structured manner and the NSM is paving the way to
significantly develop India’s solar sector.
The NSM also aims to boost India’s domestic manufacturing
capability in respect of components/equipment required by solar
power plants. The NSM targets a 4GW-5GW equivalent
manufacturing capacity by 2020, including capacities for
polysilicon for which India is currently import reliant. The
Government is providing subsidies, tax incentives and liberal FDI
policy to facilitate manufacturing in India. In addition, under the
NSM, the Government had announced a policy to introduce
domestic content clause wherein 30% domestic content is
mandatory for the solar thermal power projects in the first phase
of the Mission.
Further, for stage II of Phase I for PV Power plants based on
crystalline silicon technology use of both Indian make crystalline
silicon cells and modules is mandatory. The Mission has also
indicated about the increasing share of indigenous components in
the solar power plants to be taken up under the subsequent
phases of the Mission.
Enhancing DomesticManufacturing
100% Foreign Direct Investment in allowed
0% Customs & Excise Duties on solar cells, modules and many raw materials
5% Customs and Excise duty on other raw materials, components and grid power projects
Soft loan made available through IREDA for solar energy equipment manufacturing
Provision under NSM for SIPS like incentive for promoting manufacture of solar thermal power components/ systems
Incentives for Domestic Manufacturing
The players in the solar energy market in India are concentrated largely around activities which involve the
manufacture of crystalline-based PV cells and modules, along with the development and distribution of solar
PV systems. According to MNRE, there are 65 module manufacturers with an aggregate capacity of 1500 MWp
and 15 solar cell manufacturers with an aggregate capacity of 700 MWp. The estimated production in the
country during FY 2010-11 has been estimated to be 320 MWp of solar cells and 550 MWp of PV modules.
In addition to these manufacturing companies, over 100 companies assemble and supply solar-based systems.
These include both PV-based and thermal-based systems.
On the basis of technology, very few players (such as Moser Baer) are manufacturing thin-film based modules.
The market is currently dominated by crystalline technology. However, the increasing instance of
collaborations between domestic players and their global counterparts is leading to the fast emergence of
newer technologies.
There is no manufacturer of CSP technologies in the country as of now, particularly for power generation. Since
the mission has targeted for major capacity addition through solar thermal power in the years to come, it
becomes absolutely necessary to have indigenous manufacturers of equipment and components of solar
thermal power technologies.
Current ManufacturingCapabilities
Rajasthan is experiencing a transition to a low carbon, more resource efficient
economy, with increasing share of solar energy in its generation portfolio. In
Rajasthan, the installed capacity for power generation was 8.5 GW. Thermal power
plants (coal, gas and diesel) form a major portion (~62%) of the installed capacity of
Rajasthan. More than 88% of the power in the thermal segment is generated
through coal fired power plants. The generation mix of the power sector in Rajasthan
has changed significantly in the last 10 years.
The State’s total installed capacity in renewable stood at 1.42 GW in FY 2009-10.
Renewable energy installed capacity is approximately 14% of Rajasthan’s total
installed power generating capacity. The most significant renewable energy source
was wind power with a capacity of 1.08 GW or 90% of Rajasthan’s generation
capacity.
The state currently has about 45 MW of operational solar power generation plant.
While solar electric generation has made a limited entry into the generation
portfolio to date, the committed solar generation projects and unique position on
the solar map of India has positioned the state to emerge and enter into new
dimensions.
With this transition, solar component manufacturing offers a unique potential to
deliver long-term economic growth, sustainable job creation and cutting edge
competitiveness to Rajasthan’s economy over the next ten years and beyond.
Solar manufacturing in Rajasthan is at a nascent stage and there is a limited presence
of few downstream players in the solar photovoltaic business. The installed capacity
of module manufacturing in Rajasthan is 22 MW in 2010 with handful of players.
The large pipeline of generation projects, broad mineral base, relatively low
manpower cost, and a significant allied industry base, positions the state well in
exploiting this unique growth opportunity in the solar manufacturing sector.
Why Invest in Rajasthan
What makes Rajasthan attractive for solar component manufacturing?
High solar insolations
Upcoming solar park and large land parcels
Huge end market for solar generation
Large supplier base
Rich mineral wealth
Competitive manpower cost
Supportive government
Incentive packages for large investments
Offers a ‘good quality of life’
Rajasthan shines on the solar map of India. The state is endowed with 300-330 clear sunny days and
average daily solar incidence of 5–7 kWh/m2, comparable to deserts of California, Nevada, Colorado and
Arizona. Within the state the districts such as Barmer, Bikaner, Jaisalmer, Jodhpur are the key regions
with best solar radiation in the state.
High Solar Insolation
6.6 - 6.4
6.4 - 6.2
6.2 - 6.0
6.0 - 5.8
5.8 - 5.6
5.6 - 5.4
5.4 - 5.2
5.2 - 5.0
5.0 - 4.8
4.8 - 4.6
4.6 - 4.4
KWh / sq. m
< 4.94
4.95 - 5.14
5.15 - 5.34
5.35 - 5.54
5.55 - 5.74
5.75 - 5.94
5.95 - 6.14
6.15 - 6.34
> 6.35
Radiation2
(kWh/m /day)
On-Grid ProjectsThe upcoming generation projects are fueling optimism in the
manufacturers. Rajasthan has emerged as the preferred
destination among project developers, accounting for 571 MW or
an overwhelming 81% of the total allocations of 704 MW made so
far under the NSM, including the migration projects.
The State is exploring to provide long term viability and certainty
to build up of solar energy generation and manufacturing
platforms. To achieve this, Solar Park at Bhadala, Tehsil Phalodi,
District Jodhpur is being developed.
About 10,000 hectare of government land has been identified for
park and 1,000 hectare has been earmarked for Solar
manufacturing. The topographic survey & geo-technical
investigation for 3,000 hectare has already been done in 1st phase
and another 5,000 hectare land is planned in second phase. In
addition, 60 cusecs of water has been reserved for this purpose
from Indira Gandhi Nahar Project (IGNP).
The Rajasthan State Industrial Development and Investment
Corporation (RIICO) is highly proactive in providing land and
supporting infrastructure within the State. The State also has set
aside a 1,000 acre land for a solar manufacturing facility near
Ghilot in Alwar district.
Upcoming Solar Park and Large Land Parcels
The state government aims at developing Rajasthan as a global
solar power hub of 10,000-12,000 MW capacity over the next 10-12
years to meet energy requirements.
Also, the pipeline commitments of generation projects in
Rajasthan ushers a significant business opportunity for solar
component manufacturing.
Rajasthan
Solar PV (MW)
Solar CSP (MW)
141 430
Andhra Pradesh15 50
Others32
Maharashtra16
Gujarat20
State wise allocation under First phase of NSMSource: MNRE, NVVN, Government of India
Huge End Market
The allocation of projects reveals that maximum sanctioned projects are in the
districts of Jaisalmer, Bikaner, Jodhpur, Nagaur and Barmer. Jaisalmer is the leader
in allocation of solar projects with installation of 320 MW across 8 projects (four
each in Solar PV and Solar thermal). Jaisalmer district scores over the others
primarily due to solar radiation in the region, which is ideally suited for harvesting
solar energy. Bikaner is also expected to have projects of over 120MW.
The Indian Renewable Energy Development Agency (IREDA) sanctioned 98MW of
solar PV capacity across 80 projects under the Rooftop PV & Small Solar Generation
Programme (RPSSGP). Rajasthan accounts for the highest number of projects
RPSSGP. Rajasthan accounts for 12 projects (15% of total projects) of 12 MW (12% of
total capacity) sanctioned under rooftop solar PV and small solar projects.
State wise allocation under phase for RPSSGP (Capacity)Source: MNRE, IREDA
Others (34.35 MW)
Jharkand (16 MW)
Rajasthan (12MW)Andhra Pradesh (10.75 MW)
Haryana (8.55 MW)
Punjab (8.5MW)
Others (23)
Jharkand (8)
Rajasthan (12)Andhra Pradesh (11)
Haryana (9)
Punjab (7)
State wise allocation under phase for RPSSGP (No. of. Projects)Source: MNRE, IREDA
Rajasthan has the highest sanctioned projects (~52% of the
total allocation) in Off-Grid Solar Application scheme of NSM.
Rajasthan’s competitive advantage lies in its large existing
supplier base spread across sector such as glass and mirror,
cement, steel, iron, salt, etc. which are critical raw materials for
manufacturing solar components, especially for Solar CSP
technology. With agglomeration and spillover effects, the State
has the opportunity to build on its glass and ceramic
manufacturing experience to develop solar grade glass and
mirrors.
Rajasthan(10268 MW)
State wise allocation under off grid scheme of NSMSource: MNRE, NVVN, Government of India
Madhya Pradesh
Uttar Pradesh(2318 MW)
(1701 MW)
Chattisgarh(1457 MW)
Lakshwadeep(1100 MW)
Others(2924 MW)
Off-Grid Projects
Large Supplier Base
Average manpower costs in the State are 30-35% lower across all
skill categories. In addition, the state has a requisite pool of skilled
manpower that could cater to the requirements for solar
component manufacturing. Certain skills in general
manufacturing industry (such as glass) are easily transferable to
solar manufacturing and related industries.
Rajasthan’s competitive advantage lies in its large existing
supplier base spread across sector such as glass and mirror,
cement, steel, iron, salt, etc. which are critical raw materials for
manufacturing solar components, especially for Solar CSP
technology. With agglomeration and spillover effects, the State
has the opportunity to build on its glass and ceramic
manufacturing experience to develop solar grade glass and
mirrors.
The State alone produces 99% of zinc concentrates of India. The
state also holds the largest resources of lead-zinc ore amounting
to 468.51 million tonnes (90%) in India. The developed iron and
steel industry in and around the State coupled with high
availability of zinc concentrates used for galvanization offers a
potential for manufacturing mounting structure.
Rajasthan is also the third largest producer of salt in India with an
average annual production of 1.2 million metric tonnes.CompetitiveManpower Cost
Comparative salary rates
Rajasthan
Peer states ``````````````````````````````````````````
````````````````````````````
Rich Mineral Wealth
Dedicated Freight Corridor (DFC) and Delhi Mumbai Industrial Corridor
(DMIC) are expected to be a game changer in bringing about logistical
efficiencies for the industry. A 1483-km long Dedicated Freight Corridor
between Delhi and Mumbai is expected to be completed by 2016. About
39% of the corridor passes through State and 46% of the total DMIC Project
Influence Area (PIA) falls in the state.
DFC Alignment
DMIC Influence
Junctions along DFC
End Terminals
Delhi
Haryana
Punjab
Gujarat
MadhyaPradesh
Rajasthan Jaipur
CBB
DDD
EEE
Phulera
Rewari
Dadri
Kota
Marwar Jn.
Palanpur
Jodhpur
Pirthala
AAAAAA
B
A
Amli Road/Sabarmati
Development Nodes
ABCDE
Bhiwadi-NeemranaAjmer-KishangarhJaipurBhilwara-ChittorgarhJodhpur-Pali
5 out of 6 Development Nodes are in Rajasthan
Logistics
Rajasthan offers a good and comfortable quality of life to its
residents.
The State has excellent medical & health facilities and is home
to several state-of-the-art hospitals such as Fortis, Narayan
Hrudalaya, Santokba Durlabhji Memorial Hospital and S.K Soni
Hospital
The State has a large number of renowned educational
institutions such as IIM, IIT, AIIMS, BITS Pilani, Raffles University,
FDDI, Mayo College, Amity University and many more.
Rajasthan has 2 out of 3 hotels in India that have been ranked
amongst 15 best hotels in the world and top 5 in Asia by the
readers of Travel & Leisure, USA in 2011. The State has almost
all major hotel brands including Oberoi, Taj, ITC, and Marriott.
Rajasthan has a very peaceful environment with one of the
lowest crime rates in the country
Jaipur, the State capital is a modern city, with low congestion
and pollution with all conveniences and a great night life like
that of a metropolis including restaurants, cinemas, malls and
supermarkets.
Good Quality of Life
Annual Manufacturing Capacity SPV Power Plant Allocation
10 MW
20 MW
More than 25 MW but less than 50 MW
More than 50 MW
Time bound approvals and clearances
Online submission of application
Mandatory to submit application only through this
system to render transparency to the system
BIP is the nodal agency for this system
Single WindowSystem
A Welcoming &SupportiveGovernmentGenerating higher levels of economic growth and prosperity through
increased private sector investment is a top priority for the State of
Rajasthan. The Bureau of Investment Promotion (BIP) is the primary State
Institution supporting inward private sector investment in Rajasthan. BIP is
committed to providing a professional service and a timely response to
current and prospective investors in the State.
The Agency assists investors to objectively evaluate Rajasthan as a location
for their investment projects. It works with State and Local Governmental
authorities to expedite approvals, where necessary, to enable a fast start-up
of operations. Because “time is money”, the Government has introduced a
Single Window System that serves as a single point interface between
investors and various government departments and ensures faster decision-
making on applications for licenses and permits. BIP is the nodal agency for
the Single Window System.
The Government of Rajasthan has issued Rajasthan Energy Solar Policy, 2011 in April 2011. The policy provides framework for development
of large scale solar power for achieving the cost of solar power generation leading to grid parity. The Rajasthan Solar Energy Policy, 2011
aims to develop the state as a global hub of solar power of 10,000-12,000 MW capacity in next 10-12 years. The policy also aims at
establishing large scale manufacturing capability of solar and allied industries resulting in creation of direct and indirect employment
opportunities in the State. The policy envisages allocation of 200 MW of solar photovoltaic power generation plant for establishing
manufacturing facility with processing from wafer stage. The policy aims to create an annual manufacturing capacity of 500 MW by 2013.
Rajasthan Solar Energy Policy, 2011
The Rajasthan Investment Promotion Scheme 2010 provides a range of subsidies
and exemptions from taxes for investors in Rajasthan. In addition, for investments
above US$100m and providing minimum employment for 200 people, the State is
willing to provide special customized incentive packages tailored to the needs of
individual investors. The State's aim is to ensure that Rajasthan is competitive with
peer states in terms of financial incentives offered to major investors.
Customized Incentive Packages for Large Investments
The Rajasthan Investment Promotion Scheme (RIPS) 2010
is a package of financial incentives and subsidies for
investors.
RIPS 2010 provides investment subsidy to all eligible
investors of an amount equal to 30% of the tax deposited,
without any linkage with payment of interest and wages.
Employment generation subsidy @ Rs. 15000 per
employee/annum. For women, SC/ST and persons with
disability this amount has been enhanced to Rs. 18000 per
employee/annum.
Subsidies:
Exemption from Taxes:Some of the tax exemptions announced in RIPS are
50% exemption from payment of Electricity duty;
50% exemption from payment of land Tax;
50% exemption from payment of Stamp duty on
purchase or lease of land and
construction/improvement on such land;
50% exemption from payment of conversion charge
payable for change of land use.
The exemptions have been announced for seven years for
payment of Electricity duty, and Land Tax.
Rajasthan Investment PromotionScheme (RIPS) 2010
BIP’s Messageto InvestorsAs the IPA for Rajasthan, the Bureau of Investment Promotion (BIP) offers you a dedicated professional
support team for your Solar Power investment.
We are a One Stop Shop for all your investment needs, from project inception through completion to
investment aftercare.
Guided by the highest standards of business ethics, we promise to make a timely and effective response
to your enquiries and to provide information on all aspects of investment in Rajasthan.
We look forward to meeting with you soon and we warmly invite you to visit Rajasthan to see for
yourself the exciting opportunities available.
Please contact us using the details given on the back cover.
Knowledge Partners
Contact Officers
Dr. Purushottam Agarwal Commissioner, BIP
Mr. Amit BorahSolar Sector Incharge, BIP
Bureau of Investment PromotionUdyog Bhawan, Tilak Marg, Jaipur 302005Rajasthan, IndiaTel. +91-141-2227274, 2227812, 2227713Fax +91-141-2227506www.investrajasthan.comE-mail: [email protected]