India Solar PV Advisor

A comprehensive guide for developers and investors

(Updated Sept 2011)

Should I Invest in What are the next

Solar PV? steps?

What is the cost and

return on investment?

What are the

What incentives are
opportunities other
available from the
than power
government?
production?
 India Solar PV Advisor 2

India Solar PV Advisor - An Invaluable Guide for Solar

PV Entrepreneurs

If you are venturing into the solar PV industry in India, the India Solar PV Advisor is
a must-have guide for you.

While the current contribution of solar energy to the total India's energy needs is
insignificant, in the medium and long run, it is expected that solar energy, especially solar PV
will form a vital component of the country's energy mix.

The most important barrier that had stopped Solar PV from becoming a mainstream
renewable energy resource is the high capital cost of the solar PV system.The good news is
that the capital costs for solar PV panels are expected to decrease significantly over the next
5-10 years. In addition, solar PV technology is continuously improving in terms of its
efficiency. As a result of this combination of capital cost reduction and efficiency increase,
by 2015, solar PV is expected to reach grid parity in some parts of the world and by 2020, in
most parts of the world.

For India, the recently released National Solar Mission and its generous incentives provide
an additional reason for entrepreneurs and investors to explore this industry. The
convergence of decrease in capital costs, increase in efficiency and significant financial
support by the government is likely to result in a wide range of attractive business
opportunities along the entire solar energy value chain in India.

The India Solar PV Advisor provides you critical and actionable intelligence on all
the key aspects of the solar PV industry.

Entrepreneurs and investors have a need for a comprehensive resource that provides details
on all the critical aspects of the solar PV industry in the Indian context, identifies the key
drivers for opportunities, and provides insights on the extensive range of these
opportunities. The India Solar PV Advisor was developed to satisfy this clear need.

The objective of the India Solar PV Advisor is to facilitate an entrepreneur keen on starting
off in solar PV power production to take the next tangible steps. The emphasis is on
providing practical data, updates and insights. The comprehensive guide has been
developed with inputs from solar PV industry experts, investors and professionals who have
been constantly interacting with the industry. It will be invaluable guide to those keen on
venturing into one of the most exciting renewable energy domains in India.

This actionableguide was developed by Energy Alternatives India (EAI – www.eai.in), a

leading consulting and research organization for the Indian renewable energy industry.

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 India Solar PV Advisor 3

List of Contents
Section I: Should I Invest in Solar PV?

1. Solar PV Business Analysis

1.1 Is this the Best Time to Invest in Solar PV?

1.2 What Are the Key Aspects You Should Consider While Investing in Solar PV?
1.2.1 Capital and Operational Costs
1.2.2 Evaluation of Locations
1.2.3 How Do You Use Solar PV Technology as a Differentiator?
1.2.4 Central &State Policies, Incentives
1.2.5 Evaluation of Opportunities along Entire Value Chain & Key Industry Segments
1.3 SWOT Analysisfor the Solar PV Industry in India
1.4 FAQ on the National Solar Mission

Section II: What are the costs and return on investment?

2. Solar PV in India – Costs, Investments and Returns

2.1 Cost and Returns

2.1.1 Costs
 Capital Cost
 Capital Costs for Solar Photovoltaic Systems by Scale
 Capital Costs for Solar Photovoltaic Modules by Timeframe
 Projection of Capital Costs over Time
 Operational Cost
 Projections for Total Cost of Electricity Production from MNRE
2.1.2 Returns
 Internal Rate of Return for Solar PV
 Payback Period
2.2 Financial Modeling and Scenario Analysis for Solar PV Projects
2.3 Investment Trends in Solar PV for India
2.3.1 Renewable Energy Financing in India
 Financing Options Available for Solar PV
 Nodal Agencies that Support Renewable Energy Financing in India
 Financial Institutions that Fund Renewable Energy Projects in India
 List of Venture Capital and Private Equity Companies in India Active
in the Renewable Energy Sector
2.3.2 Examples of Investments in India for Solar PV
2.3.3 Drivers and Bottlenecks to Investments in Solar PV

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 India Solar PV Advisor 4

Section III: What incentives are available from the government?

3. Government Incentives and Support

3.1 Central Government Incentives

3.1.1 Semiconductor Policy and Special Incentives Package Schemes
3.1.3 NVVN SCHEME
3.1.3.1 Revised Guidelinesfor Grid Connected Solar Power Plants (Batch II)
3.1.3.2 Guidelines for Offgrid and Small Solar Power Plants
3.1.4 Other Policies Guiding India’s Push towards Renewable Sources of Power
3.1.5 Current Status of Grid-connected Solar PV Projects under JNNSM
3.2 State Specific Incentives
3.2.1 State Tariff’s (APPC) for Solar Power
3.2.2 Rajasthan Solar Policy
3.2.3 Gujarat Solar Policy
3.2.4 Karnataka Solar Policy
3.3 Feed-in-tariff Success Stories

Section IV: What should be my next steps for putting up a solar PV

power plant?

4. Next Steps to be taken by a Solar PV Power Plant Developer

4.1 Preparing Prefeasibility and Detailed Project Report

4.2 Meeting Government Departments
4.2.1 Lists and Contact Details of Government Departments in Various States
4.2.2 Central Government Relevant Department Details and Contacts
4.2.3 Other associations for Solar Energy in India
4.3 List of Solar PV Cell and Module Manufacturers in India

5. Developing a Prefeasibility Report

5.1 Solar Power Technical Feasibility Report Template

5.2 An illustration of Technical Feasibility of a Solar Power Project
5.2.1 Solar Radiation Assessment
5.2.2 Assessment of Area Required
5.2.3 Major Equipments in Solar PV Power Plants
5.2.4 Electricity Production
5.3 Detailed Project Report

6. Project Development for Solar PV Power Plants

6.1 Project Development Stages

6.2 Selection Criteria for Location of Solar PV Power Plant

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 India Solar PV Advisor 5

Section V: What are the opportunities available in solar PV, other

than power production?

7. Solar Energy Value Chain and Business Opportunities

7.1 Solar PV Value Chain

 Processes in Solar PV Value Chain
o Polysilicon Manufacturing
o Manufacturing Ingot and Wafers
o Manufacturing Cells and Modules
 Crystalline Solar Cells
 Thin-Film Solar Cells
 Concentrating PV Cells
7.2 Diverse Business Opportunities in Solar PV
7.2.1 Manufacturing Opportunities in Solar PV
Core
 Polysilicon
 Ingot and Wafer
 Solar Cell
 Solar Panel
 Solar Products

Non-core
 Glass
 Electrical Components: Inverters, Wires and Transformers
 Solar PV System Manufacturing Equipments
 Chemicals for Solar PV System Production
7.2.2 Service Opportunities
o Solar Panel Installation Services
o Project Development Support
o Financing Support
o Design and Engineering Support
o Construction and Commissioning Support
o Operation and Maintenance
o Decommissioning
o Others
7.2.3 Trading Opportunities
7.2.4 Solar PV Power Production – Alternative Business Models
7.3 List of Prominent Companies in the Various Stages of Solar PV Value Chain
o Prominent Crystalline Silicon Cells Manufacturers Worldwide
o Prominent Thin-film Companies Worldwide
o Prominent Indian Solar PV Cell Producers
o Laminator Manufacturing Companies
o Nip Roller Manufacturers
o Ribbon Manufacturers

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 India Solar PV Advisor 6

o Combined Tabbers& Stringers Producers

o Companies that Provide Laser Structuring for Thin-Film Modules
o Producers of Backsheets
o Glass

Section VI: What are the current trends in the solar PV industry in
India?

8. Solar PV in India – Industry Status and Trends

8.1 Introduction
8.1.1 Introduction to Alternative Energy Sources
8.2 Solar PV Technology
8.2.1 Solar PV – Crystalline Solar Cells
8.2.2 Solar PV – Thin Film Solar Cells
8.2.3 Solar PV - Concentrating Photovoltaic
8.2.4 Photo-electrochemical, Polymer, Nano-crystal and Hybrid cells
8.3 Solar PV Market Status and Trends
8.3.1 Market Share of Thin Film Photovoltaics
8.3.2 Solar Photovoltaic in India – A Snapshot
8.4 Solar Energy Potential in India
8.4.1 Regional Potential for Solar Power
8.4.2 Current Solar PV Scenario in India
8.4.3 Future Solar PV Scenario
8.4.4 Solar PV Future Contribution in Indian Electricity Supply
8.5 Status of Solar PV Technology in India
8.5.1Solar Cells and Solar PV Production
8.5.2 Foreign Trade of Solar PV
8.6 Prominent Solar PV Power Projects & Companies in India
8.6.1 Solar PV Power Projects Installed
8.6.2 Solar PV Power Projects Approved by the Central Government under Phase I of
NSM Scheme
8.6.3 Solar PV State Projects
8.7. Key Challenges to Growth of Solar PV in India
8.8 Brief Highlights of Solar CSP and Solar Thermal for Heating and Drying
8.8.1 Solar CSP
8.8.2 Solar Thermal for Heating & Drying Purposes

Reference
Solar Energy Related Web resources & Other Alternative Energy Web Resources

Solar Energy Web Resources

 Solar Energy News
 Solar Energy Blogs
 Solar Energy Forum

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 India Solar PV Advisor 7

 Solar Energy Portal

Other Alternative & Renewable Energy Related Web Resources
 Renewable Energy News Sites
 Renewable& Renewable Energy Blogs
 Renewable Energy Forums
 Renewable Energy Portals & Guides

Appendix

A 1. Renewable Energy Investing in India

A 1.1 Dedicated International Funds and Schemes for Renewable Energy
A 1.2 Details of Indian Investments in Renewable Energy and Clean Technologies
A 1.3 Stages of Investments
A 1.4 India – Prominent Clean Technologies Equity Investments
A 1.5 India – Clean Technologies Equity Investments by Segment (2008)
A 1.6 Prominent M&A Deals in Cleantech
A 1.7 Private Equity Investments in Cleantech by Year
A 1.8 Prominent Investments Made in Indian Renewable Energy
A 1.9 Other References
A 2. List of Solar PV Projects Selected Under JNNSM, Phase I, Batch I
A 2.1Guidelines for Grid Connected Solar Power Plants, Batch I
A 2.2Grid-connected Solar Power Projects under JNNSM
A 2.3 List of Rooftop and other Small Solar Power Projects

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 India Solar PV Advisor 8

List of Tables
Chapter 1-Solar PV Business Analysis

1. Levelized cost of different energy sources

2. Sunshine hours for the major cities of the world

Chapter 2-Solar PV in India – Costs and Investments

1. Break-up of capital expenses per MW

2. Capital cost of solar PV systems by scale
3. Capital costs for solar PV modules by timeframe
4. Projection of capital costs over time
5. IRR & payback calculations

Chapter 4-Next Steps to be taken by a Developer of Solar PV Project

1. IRR & payback calculation for various capex levels –State-specific scheme
2. IRR & payback calculation for various opex levels - State-specific scheme
3. IRR & payback calculation for different tariff rates - State-specific scheme
4. IRR & payback calculation for various capex levels - NVVN scheme
5. IRR & payback calculation for various opex levels - NVVN scheme
6. Cash flow for a 5 MW solar PV power plant under the NVVN scheme
7. Organizational set up of the Indian power sector
8. Lists and contact details of government departments in various states
9. Central government relevant department details and contacts
10. Associations for solar energy in India
11. List of solar PV cell and module manufacturers in India
12. Solar PV tariff in Gujarat
13. solar PV tariff in Rajasthan
14. Comparison of salient features of NVVN and GBI scheme
15. Real-life data of electricity produced per MW from solar PV plants

Chapter 7-Solar PV Value Chain and Businesses Opportunities

1. Business opportunities in polysilicon manufacturing

2. Business opportunities in solar glasses
3. Business opportunities in ingot and wafer manufacturing
4. Business opportunities in solar cell manufacturing
5. Business opportunities in crystalline solar module production
6. Business opportunities in thin film solar cell manufacturing
7. Business opportunities in concentrating PV manufacturing
8. Prominent companies along the solar PV value chain

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 India Solar PV Advisor 9

Chapter 8-Solar PV in India – Industry Status and Trends

1. Share of various solar PV technologies

2. Top 5 districts with the best solar irradiation in Gujarat
3. Top 5 districts with the best solar irradiation in Rajasthan
4. Top 5 districts with the best solar irradiation in Madhya Pradesh
5. Renewable energy installed capacity in India
6. Projection of solar pv installed capacity
7. Projection of solar electricity generation capacity
8. Solar PV projects installed
9. Proposed solar PV projects

List of Figures
1. Cost Projection for Grid Parity of Solar PV in India
2. Schematic Representation of National Solar Mission
3. Flow Chart Depicting Next Steps to be Taken by a Solar PV Power Plant Developer
4. Organizational Set up of the Indian Power Sector
5. Template for Preparing Prefeasibility Report
6. Map Showing Solar Radiation Data in Various Parts of India
7. Solar Irradiation Data for Jhulwania,
8. A Simple Schematic of a Grid-connected Solar PV Power Plant
9. Detailed Schematic of a Solar PV Grid-connected Power Plant
10. Diagrammatic Representation of PV Module Efficiency
11. Flow Chart Depicting Project Development Stages
12. Solar PV Power Value Chain
13. Value Chain for Crystalline Silicon Solar Cells
14. Solar PV Value Chain Detailed Schematic
15. Classification of Energy Sources
16. Solar Energy Technology
17. Photovoltaic Market in 2009
18. Thin film vs. Crystalline Solar Panel Production
19. Annual Mean Daily Solar Radiation in India
20. Solar Irradiation Data for Patan
21. Solar Irradiation Data for Jaisalmer
22. Solar Irradiation Data for Neemuch
23. Trends in Production of Solar PV Cells and Modules (MWp) in India
24. Application of Solar PV Cells (MW) in India – Sectorwise
25. Trends in Foreign Trade of Solar PV in India
26. Imports of Solar PV in India – 2008-09
27. Exports of Solar PV in India – 2008-09

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 India Solar PV Advisor 10
SECTION 1

Should I Invest in Solar PV?

INTRODUCTION

India presents an attractive opportunity for solar PV developers and investors.

At the same time, the returns on these projects rely to a significant extent on
external support mechanisms, specifically government policies and incentives.
In addition, there could be significant competition in the market, with a
number of new companies entering the field. It is thus imperative that
entrepreneurs keen on investing in solar PV spend efforts in devising optimal
business strategies. This chapter provides more details on the business This chapter gives answers to
strategies that should be deployed by businesses keen on this sector. the following key questions

1. Is this the best time to

SAMPLE CONTENT invest in solar PV in India?
Key Aspects to Consider
2. What are key aspects I
should consider before
Value Chain & Key Industry Segments
getting into solar PV
power production?
The solar PV industry value chain comprises a number of sub-
segments. It is desirable that developers and investors acquire an
understanding of all these sub-segments and the opportunities
that they represent before deciding to invest in a solar PV power
plant.

It might be useful if they could spend time to analyse the niche

areas that are underdeveloped and under serviced where solar PV
could be applied. For instance, in India, the following are some of
the segments underserved by the current electricity grid and
hence could make excellent markets in the context of the solar PV
industry:

1. Villages that have no grid connectivity

2. Companies that use diesel generator sets as a power
backup
3. Mobile telecom towers in many parts of India that have
little access to the utility grid, and other stand alone
commercial and industrial ventures.

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 India Solar PV Advisor 11

SWOT Analysis for the Indian Solar PV Industry

STRENGTHS WEAKNESSES
 A high growth industry with  Owing to high capital costs, the
significant future potential. business needs external incentives
 Sunlight is available in sufficient to be economically feasible, thus
quantities in many regions. increasing dependence on
 Technology proven, with low governmental policies.
operation and maintenance  The capital intensive nature of the
costs, and scalable. business might favour larger
 Availability of soft loans and businesses over smaller ones.
government incentives for  The distributed and intermittent
growth and expansion nature of solar energy makes it
difficult for utilities to rely on solar
PV for their base load.

OPPORTUNITIES THREATS
 Governments ambitious targets
 Technology innovation is high, so
and attractive policies opens up
there are risks of obsolescence.
many avenues for investment
 Off-peak seasons reduce cash flow.
 Opportunities exist all along the
 Industry is new, so finding skilled
solar PV business value chain, not
workforce could be a problem.
just for power plants.
 Entirely new opportunities could
open up as the there is high
innovation in technology and the
technology could prove to be a
disruptive business, especially
with reductions in costs in future.

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 India Solar PV Advisor 12

What is the cost and return on investment?

SECTION 2

INTRODUCTION

It still is quite expensive to obtain power from solar PV, and this is primarily
owing to the high capital costs, as the operational costs are quite low for solar Example of investments
PV. At the same time, the costs of solar PV cells have been falling significantly, into solar PV
and it is expected that solar PV based power will achieve grid parity by 2015.
Such an event – grid parity –makes solar PV an attractive option for those KPCL
keen on investing in this sector. This chapter provides extensive details and
analyses of the capital and operating expenses of solar PV systems and solar Karnataka Power Corporation
PV based power generation.It also provides costs and cost break-ups for the (KLPCL) is a key catalyst
various stages of the solar energy value chain and details for cost reduction behind key power sector
possibilities by scale and by time. Investment data (VC, PE, asset finance) for reforms in the state of
solar energy are also provided. Karnataka. KPCL today has an
installed capacity of 5509.82
MW of hydel, thermal and
SAMPLE CONTENT wind energy, with 4000 MW
in the pipeline.
Capital Cost
Karnataka Power Corporation
Solar PV has one of the highest capital costs of all renewable energy Limited (KPCL) has so far
sources, but it has relatively low operational costs, owing to the low invested Rs 120 crore on
maintenance and repair needs. For a solar PV power plant, the approximate setting up two solar PV power
capital cost per MW is approximately Rs. 13.5crores – the precise cost plants, 3 MW each in Kolar,
depends on scale. This includes the cost of panels, the balance of systems, Belgaum and Raichur districts.
the cost of land and other support infrastructures. In Jun 2010, the solar PV plant
located at the Yalesandra
Break-Up for the Capital Expenses per MW village in Kolar district was
formally launched. The will
Component Amount (INR. lakhs)
provide energy to 500
PV modules 600.0 pumpsets of 10 HP each and
benefit about 1,000 farmers.
Inverter 90.0 While the Belgaum power
Balance of System (transformers, cables and plant is also operational, the
wires, tracking devices…) 200.0 Raichur PV power plant is
expected to become
Installation (civil & general works) 110.0
operational before end of
Evacuation and other pre operative expenses 110.0 2010.
Total
1,110.0

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 India Solar PV Advisor 13

Capital Costs for Solar Photovoltaic Systems by Scale

The following table provides the approximate capital costs for solar PV power (2011)
Capacity (MW) Capex (Rs
Crores/MW)
1 11.1
5 54.4
10 103.3
15 152.3
20 196.3

Source: EAI

Investment in Solar PV in India

Until the end of 2009, Wind energy had held the attention of investors in India because it
was considered a proven investment. This segment is now considered comparatively
mature and many have started looking at other areas. Many investors see India’s potential
in tapping solar energy as even greater than wind, given that its sunny days are around 93%
of the year and can be more easily distributed.

According to a UNEP report, total investment in clean energy excluding large hydro power
in India grew 12% to $4.1 billion in 2008.

 The largest portion of new investment in India went to the wind sector, growing 17%
-- from $2.2 billion to $2.6.

 Thanks to a supportive policy environment, solar investment grew from $18 million
in 2007 to $347 million in 2008, most of which went to setting up module and cell
manufacturing facilities.

Both equity-based and debt-based investments into solar PV power plants in India are
expected to accelerate dramatically in 2010 owing to the National Solar Mission and similar
thrusts provided by the state governments for solar PV investments.

Some prominent examples of investments into solar PV that have taken place until Mar
2010 are provided below

1. Azure Power
2. Moser Baer Photovoltaic (for solar PV cell production)
3. Titan Solar
4. KPCL
5. Clover Solar

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 India Solar PV Advisor 14

Financial Institutions That Fund Renewable Energy Projects in India

Some of the financial institutions that fund renewable energy projects in India are given
below:

 ADB  IFC  Proparco

 DBS  IL&FS  Rabobank
 DEG  IREDA  SBI
 ICICI Bank  PFC  SBI Caps
 IDFC  Yes Bank

VC/PE Investment in India in Solar PV

Equity-based finance infusions are increasingly becoming common in renewable energy,
though in terms of overall amounts invested, project financing investments are significantly
higher than equity-based investments.

There are two primary equity-based investment possibilities:

 Venture Capital
 Private Equity

For medium and large capital requirements (upwards of $100 million), private equity is the
most optimal route, as venture capital companies try to invest relatively smaller amounts.

On the other hand, private equity companies consider investments only where the capital
requirements are medium or large; as a result, for smaller capital requirements (especially
for those that are less than Rs. 25 crores), venture capital is the most optimal option.

Private equity companies look for growth opportunities in relatively established companies
with steady revenue streams, and usually are more hesitant to invest in completely new
technologies and potentially high-risk ventures. Investing in solar PV power plants could fit
in their portfolio owing to the fact a long power purchase agreement with a government-
backed entity assures them of a stable revenue flow.

Venture capital companies look for innovative (and hence more risky) but high return
investment opportunities. As a result, few, if any venture capital companies invest in solar
PV power plants, where the potential upside is limited. Venture capital companies could be
more interested in financing innovative products and/or technologies in the solar PV value
chain that have a high “upside” potential.

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 India Solar PV Advisor 15

What incentives are available

SECTION 3

Solar Payment Security Fund

from the government? (Jun 2010)

In a move to initiate private

investment in grid-connected solar
power projects, the Centre is
setting up a Solar Payment
INTRODUCTION Security Fund that would
guarantee compensation to power
Owing to the high cost of producing producers in case of default by
power from Solar PV, power plant state-run distribution utilities.
developers world over need to be
supported by incentives – either through “This (Fund) will ensure an
subsidies or tax breaks – for them to have uninterrupted payment stream for
a sustainable business. The Indian sale of power by solar power
government had recently announced the developers contracted with NTPC
National Solar Mission which proposes to VidyutVyapar Nigam Ltd (NVVN),”
provide significant incentives to the solar says the proposal from the
PV industry. This chapter provides Ministry of New & Renewable
comprehensive details on the Energy.
governmental support and incentives
available to the solar PV industry in India. The Rs 330-crore scheme —
available only for photovoltaic
projects that are set up in the first
SAMPLE CONTENT phase of the National Solar
Mission — would provide
The following guidelines were issued in mid-June, 2010. The “adequate security” to project
guidelines are for both solar PV and solar thermal based energy. developers and financiers to make
power-purchase agreements more
Summary of JNNSM Guidelines for off-grid (captive, Rooftop bankable and hence, secure
etc.) solar systems: project financing.

 The National Solar Mission aims to provide an enabling The security would provide
environment for solar technology penetration in India. lifetime payment assurance to
 For financial assistance, the government has declared that private firms to invest in solar
in projects availing this scheme, in the debt and equity power projects. “Once the
mixture, the promoters’ equity contribution must be at mechanism is approved, NVVN
least 20%. would come out with request for
 Incentives announced: proposal for inviting applications
for developing 700 MW of grid-
connected solar power,” says the
proposal.

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 India Solar PV Advisor 16

Solar PV
Condition Subsidy Capital Subsidy Special Regions
A GBI is payable to the
project developer. Its
value is the difference
between the tariff
determined by the CERC
Grid connected (15.39 for solar PV and
projects at least Rs 15.4 for solar
100 kW and up to thermal) and the base
2 MW, connected rate, which is equal to Rs
to HT level [below 5.5 per kWh for the
33 kV] of financial year of 2010 to
distribution 2011, and escalates @
network 3% every year.
In special category
states, viz. NE, Sikkim,
Himachal Pradesh,
and Uttarakhand, a
capital subsidy of up
to 90% of installation
Subsidy, which is Solar PV plants in cost can potentially
For off-grid / calculated on the basis micro-grid be availed.
rooftop solar PV of a cost benchmarked mode/local
installations of a by MNRE, is notionally distribution Moreover, in difficult-
maximum capacity equal to 30% of network, to meet to-reach areas such
of 100 Wp per site, benchmarked cost of unmet community as Lakshadweep,
and for mini-grids solar power systems. For need for power in Andaman and
for remote 2010 it is fixed at Rs. 90 unelectrified rural Nicobar Islands, and
electrification with per Wp with battery areas, will be districts on India’s
a maximum storage, and at around provided a capital borders, the subsidy
capacity of up to Rs. 70 per Wp without subsidy of Rs 150/ availed will also be
250 kW: battery storage. Wp 90%
In addition to the above, the debt portion of investment can be financed by a soft loan at
5% interest rate, to be availed from the IREDA.

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 India Solar PV Advisor 17

Solar CSP
In difficult-to-reach
Subsidy, which is areas such as
calculated on the basis of Lakshadweep,
a cost benchmarked by Andaman and
Off-grid solar CSP MNRE, is notionally Nicobar Islands,
installations of a equal to 30% of and districts on
maximum capacity benchmarked cost of India’s borders, the
of 100 Wp per site, solar power systems. For capital subsidy
and for mini-grids 2010 it is fixed at Rs. 90 availed will be 60%
for remote per Wp with battery of benchmarked
electrification with storage, and at around costs for solar
a maximum Rs. 70 per Wp without thermal
capacity of up to battery storage. installations.
250 kW
Subsidies on costs of CSP equipment: Rs. 3000 per sq. meter for Evacuated Tube collectors,
3300 for Flat plate collectors with liquid as the working fluid, 2400 for Flat plate collectors
with air as the working fluid, 3600 for Solar collector system for direct heating application,
2100 for Concentrator with manual tracking, 3600 for non-imaging concentrators, 5400 for
Concentrator with single axis tracking, and Rs 6000 per sq. meter for Concentrator with
double axis tracking.
 In addition to the above, the debt portion of investment can be financed by a soft loan
at 5% interest rate, to be availed from the IREDA.
Notes
 The benchmarked costs (of standard solar systems) will be changed every year.
 GBI = Generation based Incentives

National Solar Mission

The structure of the National Solar Mission (NSM) is seen below

Incentives under
National Solar
Mission

Incentives for Incentives for

Power Plant Solar PV
Developers Manufacturers

Generation Based NTPC Vidyut Vyapar

Nigam (NVVN) for Semiconductor
Incentive (GBI) for
large scale solar PV Policy and Special
small scale solar
power plants (5-25 Incentive Package
power plants (1-3
MW) Scheme
MW)

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 India Solar PV Advisor 18

Next steps to be taken by a Solar PV power

SECTION 4

plant developer

INTRODUCTION Real-life Data of Electricity Produced per MW

Solar power developers need to undertake a from Solar PV Plants
Output
series of steps before they can start the Yearly per MW
implementation of the solar PV power plant. Name/ Capacity output capacity
These steps include efforts for both analyses Location MW (Units , in
(technical and economic feasibility) as well as kWh) million
interactions with government departments units
and prospective suppliers. This chapter
provides detailed inputs on how entrepreneurs Masdar city, 17.5
can undertake each of these activities. UAE 10 million 1.75

Phoenix
SAMPLE CONTENT solar
Germany 5.8 5.8millin 1
Developing a Prefeasibility Report Spain 3 5 million 1.67
Template for Preparing the Report
Planta Solar
The template for preparing a technical Fuente, 44
feasibility report of a solar power project is Spain 26 million 1.7
given below.
Beneixama
Solar irradiation PV Plant, 30
assessment Spain 20 million 1.5

Monte Alto, 14
Assessment of area Spain 9.55 million 1.47
required
ZebrasolarI
nc, Gujarat, 16.37
India 10 million 1.64
Major equipments in
Solar PV power plants Shree Ram
Energy, 44
Gujarat 25 million 1.76

Electricity production

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 India Solar PV Advisor 19

Meeting Government Departments

Organizational Setup of Indian Power Sector

According to the Constitution of India, the electricity sector falls under the “Concurrent
List”. This means that both the central and the state government are involved in the
legislation of the sector. The Government’s Ministry of Power provides overall guidance to
the power sector with the help of the Central Electricity Authority (CEA). The CEA is a
statutory body formed under the previous Electricity Regulatory Commissions (ERC) Act of
1998 which was replaced by the Electricity Act of 2003. The CEA is responsible for the
technical coordination and supervision of programmes and the office of the CEA is as
“Attached Office” of the Ministry of Power.

Center State

Policy MOP State Government

Plan
CEA

Regulations
CERC SERC

Generation
Central GENCOs IPPs Some
Generating Units Private
Transmission
STU Players in
CTU Generation
System &
SLDC
Operations Distribution
NRLDC RLDC
Distribution Distribution
Licensee
Trading Trading Licensee

Appeal Appellate Tribunal Trading Licensee

Appellate Tribunal

Organizational set up of the Indian Power Sector, Available at

http://www.ic2.utexas.edu/images/faces/mishra-2008-indianpowersector.pdf)

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 India Solar PV Advisor 20

What are the opportunities available in solar

SECTION - 5

PV, other than power production?

INTRODUCTION

While developing solar PV plants is the most highlighted business opportunity for those
interested in participating in the solar energy revolution, there are other concentric and
related opportunities in this industry. These opportunities span all the three major industry
sectors - manufacturing, trading and services. This chapter throws light on the spectrum of
opportunities available in the solar PV industry in India.

A number of attractive business opportunities are present in niche domains and less explored
areas within solar energy. A complete understanding of the industry value chain will hence
be useful in identifying these attractive opportunities. This chapter provides detailed inputs
on the business value chain in solar energy. It also provides critical inputs on suppliers,
component and equipment manufacturers for each stage of this value chain.

SAMPLE CONTENT

Polysilicon Manufacturing

The metallurgical-grade silicon (quartz) is processed to produce electronics-grade or slightly

less pure solar-grade silicon. The polysilicon is used to manufacture crystalline wafers for
solar modules.

The significance of this stage can be seen from the fact that around a quarter of the cost of a
crystalline module is just for polysilicon.

Type of Entrepreneurs keen on building up capital intensive

entrepreneurs / manufacturing facilities for an emerging market.
investors who can
benefit
Scale of investment Typical investments of $500 million - $1 billion for building a
polysilicon manufacturing plant
High R&D or Commodity manufacturing
commodity
manufacturing?
Bottlenecks/threats  High capital requirements
 High energy input requirements
 Long-term supply contracts could be a deterrent to new

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 India Solar PV Advisor 21

entrants
Competition The industry is dominated by a few companies that supply
around 90% of the total polysilicon market. Some of the
prominent companies are Hemlock, OCI, WackerChemie
Tokuyama, REC (subsidiary SGS and ASiMI), and MEMC
Market size The world market of polysilicon has been growing 30-40%
annually since 2004, primarily from the growth in solar PV
industry. The market size of the solar cell polycrystalline silicon
market for the year 2010was to $ 7.2 billion.
Supply and Fluctuating. After years of supply shortage, the industry in 2009
Demand was plagued by lower demand and overcapacity, resulting in
increased competition.
Indian scenario No companies in India are into polysilicon manufacturing
Other Notes Synergy benefits - fully integrated chemical plant has cost
advantage over pure-play silicon producers

Non-core Solar PV Business Opportunities

In addition to the core business opportunities in manufacturing available along the solar
PV value chain, there are also other non-core opportunities for entrepreneurs and
investors in this industry. We list the prominent non-core manufacturing opportunities
below.

 Solar Glasses
 Electrical Components: Inverters, Wires and Transformers
 Machinery & Equipment for Manufacturing Solar PV Cells – Crystalline and Thin-
film
 Manufacturing Chemicals for Solar Industry

Manufacturing Chemicals for Solar PV Industry

The manufacturing of photovoltaic modules, thermal receivers and reflectors requires a

number of chemicals and materials such as coatings, laminates, photovoltaic materials and
solar glass.

Production of many of these chemicals also offers opportunities to Indian companiesalready

in the chemicals industry.

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 India Solar PV Advisor 22

Solar PV Value Chain Detailed Schematic

Crystalline Photovoltaics Doping Connect cells Create

Cleaning electric circuit Laminate,
Coke Reduction Purification Wafer Cutting Coating frame, connect

Raw Silicon High Crystalline

Sand Wafer Cell
98% purity purity Module
Silicon

Silane for
Amorphous Polysilicon for Recycle Si waste from
Silicon tandem cells wafer cutting

Concentrating Photovoltaics

Concentrator
Concentrating
Cooling PV Module
Tracking

Thin-Film Photovoltaics

Deposit photovoltaic Structure substrate Laminate,

material and dopant on on glass into cell frame, and
glass or plastic sections connect
GaAsInSb Thin-film
and others Module

Mounting System Assemble modules

into array
Tracking system
Array
Mpp Tracker Combine with
other components
Inverter

Junction Box System

Wiring

Surge Protection

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 India Solar PV Advisor 23

What are the current trends in the solar PV

industry in India?
SECTION - 6

INTRODUCTION

India presents an attractive opportunity for solar PV

developers and investors. At the same time, the returns on Specifics of the Solar PV Plant at
these projects rely to a significant extent on external support Kolar, Karnataka
mechanisms, specifically government policies and incentives.
In addition, there could be significant competition in the Description Quantity
market, with a number of new companies entering the field. It
is thus imperative that entrepreneurs keen on investing in
solar PV spend efforts in devising optimal business strategies. Total Capacity 3 MW
This chapter provides more details on the business strategies
that should be deployed by businesses keen on this sector. Module size 240 Wp

Module Inclination 17 deg

SAMPLE CONTENT
No. of modules per array 24

Total array 521

Solar PV Technology
Total no. of PCU (250
The solar PV energy technology can be broadly classified KVA) 12
as follows:
Distance between two
Figure 2.1: Solar Energy Technology rows 3 metres

Monocrystalline
Crystalline
Polycrystalline
Solar Photovoltaic

Concentrating
Photovoltaic CdTe

CIGS
Thin - film
CIS

Amorphous
Silicon (a-Si)

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 India Solar PV Advisor 24

Regional Potential for Solar Power

This section of the chapter provides irradiation in various districts of the top 3 states for
solar energy in India, namely Gujarat, Rajasthan and Madhya Pradesh.

Gujarat

The top 5 districts with the best solar irradiation in Gujarat are given below.

Sl. No District Average annual radiation

(kWh/m2/day)
1 Patan 5.44
2 Mehsana 5.41
3 Banaskantha 5.38
4 Porbandar 5.32
5 Amreli 5.31

Given below is a sample of solar irradiation data in Jaisalmer, Rajasthan

Solar irradiation in Jaisalmer

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 India Solar PV Advisor 25

Current PV Solar Energy Scenario

PV constitutes a miniscule part in India’s installed power generation capacity with grid
connected solar PV generation at a mere 17.82 MW as of Dec 2010. PV installations in India
today almost entirely comprise small capacity applications. They are most visibly seen in
lighting applications (street lighting, and home lightning systems) in the cities and towns,
and in small electrification systems and solar lanterns in rural areas. PV is also being
deployed to a small degree in powering water pump sets.

Cumulative
Achievements
No. Sources / Systems in MW
I. Power From Renewables
A. Grid-interactive renewable power
1 Wind Power 14175.73
2 Hydro Power 3043.25
3 Biomass Power (Agro-wastes/Residues). 979.1
4 Bagasse Cogeneration 2673.53
5 Waste to Power 72.46
6 Solar Power 45.5
B. Off-grid/Distributed Renewable power(including Captive/CHP plants)
7 Biomass Power/Cogen. (Non-Bagasse) 267.08
8 Biomass Gasifiers 128.16
9 U&I Waste-to-Energy 60.78
10 Rural Waste-to-Energy 0.45
11 Solar PV Power Plants and Street Lights(>1kW) 2.39
12 Aero-generators/Hybrid systems 1.07
Remote Village Electrification (Villages/Hamlets
II provided with electricity/lighting system 5329/1538

III Decentralized Energy Systems

13 Family Type Biogas Plants (in lakh) 42.77
14 SPV Street Lighting System (in nos.) 1,21,634
15 SPV Home Lighting System (in nos.) 6,19,428
16 SPV Lanterns (in nos.) 8,13,380
17 SPV Pumps (in nos.) 7495
18 SPV Water Heating-collector area (in million.sq.m) 3.53
19 Solar Cookers (in lakh) 6.64
20 Wind Pumps (in nos.). 1352
MW = Megawatt; kWp = Kilowatt peak; Sq.m = Square metre
Source: MNRE

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 India Solar PV Advisor 26

Major Companies who have benefited from our PV advisor report

 Accenture – India’s leading management consulting, technology and outsourcing
company -www.accenture.com

 Reliance Solar – Reliance Solar is the solar initiative of the Reliance Group -
www.relsolar.com

 Vedanta Resources –Vedanta Resources is a diversified metals/mining company, and

the first Indian manufacturing company to be listed on the London Stock
Exchange.http://www.vedantaresources.com

 Indian Railways– The largest rail network in Asia - http://www.indianrail.gov.in/

 SJVN- A joint venture of the Government of India ( GOI ) and the Government of
Himachal Pradesh (GOHP) to plan, investigate, organize, execute, operate and
maintain Hydro-electric power projects - http://sjvn.nic.in/

 NMDC - India's single largest iron ore producer and exporter, a Government of India
fully owned public enterprise under the Ministry of Steel - www.nmdc.co.in

 Emerson Network Power - A diversified global manufacturing and technology

company with sales of over $25 billion - www.emersonnetworkpower-partner.com

 Cethar Vessels - A leading boiler manufacturer - http://www.cethar.com

 Danfoss Solar, Denmark – It is one of the largest industrial companies in Denmark.

The global group is a leader within research, development and production, sales and
service of mechanical and electronic components for several industries -
www.danfoss.com

 Anna University– An affiliating university, with almost all engineering colleges in the
state of Tamil Nadu - www.annauniv.edu

 Minda Group - NK Minda Group is India 's foremost manufacturer of a range of

automotive components - http://www.mindagroup.com/

 Hirco Group - Hirco Group is India's largest residential builder and leading developer
of mixed-used townships - http://www.hirco.com/

 Maharashtra Metal Powder Ltd - A leading name in the field of Aluminum powder
and pastes - http://www.mmpowders.com/

 pManifold - A consulting and support services provider for the energy, utilities and
infotech industries – http://web.pmanifold.com

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 India Solar PV Advisor 27

 NR Serv - NR Services specialises in Turnkey Solutions, RF Planning and Optimization,

Network Performance Services (KPI's / NPI's) and Project management -
http://www.nrserv.com

 Taurian Steel - a leading iron ore exporter from India -

http://www.tauriansteel.com/

 Panchshil - Panchshil Realty is a leading name in construction, real estate

development and project Management - http://www.panchshil.com/

 Denmark Embassy - The Danish Embassy in New Delhi,www.ambnewdelhi.um.dk

 Vimal Fire Controls Pvt Ltd (VFCPL)- Forerunner among the Indian Fire & Safety
Equipment and Systems manufacturing companies –www.vimalfire.com

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 India Solar PV Advisor 28

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