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DOMESTIC CONTENT REQUIREMENTS AND INDIA’S NATIONAL SOLAR
MISSION Meera Fickling ECODIT, LLC June 26, 2014
INDIA’S SOLAR PROGRAM
• JNNSM: launched in 2010 under National Action Plan on Climate Change. • 1.1 GW of grid connected
PV, 0.2 GW of off grid by 2013.
• 20 GW of grid connected PV, 2 GW of off grid by 2022.
INDIA’S SOLAR PROGRAM
• Phase I: Reverse auction mechanism • Solar developers submit bids to
government • Government selects lowest
bids • Government purchases power
• Two auctions under Phase I: • Batch I: PPAs signed in 2011 • Batch II: PPAs signed in 2012
• One auction so far under Phase II: • PPAs signed in 2014
THE SOLAR PV MANUFACTURING CHAIN
THE PHASE I LCR
• Crystalline silicon panels required to be sourced domestically.
• Thin film panels exempt from the requirement.
0.5
0.7
0.9
1.1
1.3
1.5
1.7
1.9
2.1
1/2
010
3/2
010
5/2
010
7/2
010
9/2
010
11/
2010
1/2
011
3/2
011
5/2
011
7/2
011
9/2
011
11/
2011
1/2
012
3/2
012
5/2
012
7/2
012
9/2
012
11/
2012
CSi vs Thin Film Module Spot Prices, Adjusted for BOS Penalty, 2010-2012
Pvinsights CSi Multi Module Spot $/watt - Average
PVinsights Thin Film Module Spot $/watt + BOS Penalty
Globally, only 11 percent of PV deployment is in thin film; 89 percent is in Csi.
Under the JNNSM, over 60 percent of capacity subsidized under Phase I was in thin film.
Gujarat vs. Rajasthan
Projects Financed 2011-‐2012 JNNSM
Projects Non-‐JNNSM Projects >
5 MW Gujarat 0 59 North Gujarat 0 2
Rajasthan 52 2
PERCENT MARKET SHARE: FOREIGN CSI, FOREIGN THIN FILM, DOMESTIC
Rajasthan Gujarat
Foreign CSi 0 30
Foreign Thin Film 62 38
Domes?c CSi 38 33
PHASE II: POLICY ADJUSTMENTS
• Viability Gap Funding (VGF) • Total 750 MW in Batch I • Two separate auctions: • 375 MW is open; no LCR • 375 MW has technology-
neutral LCR
• Imported thin film now at a disadvantage • US has requested a
dispute settlement panel in WTO
PHASE II LCR’S IMPACT ON THE COST OF SUBSIDIZING SOLAR GENERATION
0
5
10
15
20
25
30
10
60
110
160
210
260
310
360
410
460
510
560
610
660
710
Via
bili
ty G
ap
Fun
din
g (
VG
F),
Mill
ions
of R
upe
es
MW
True Supply
Supply with LCR
SUMMARY
• Phase I LCR: • A failure for Indian
manufacturing: No significant additional domestic market share.
• A win for foreign thin film manufacturers: mean estimate of 24% increase in thin film market share.
• Phase II LCR: • 50% increase in subsidy at the
margin relative to a non-LCR scenario.