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Solar PV Market in India

Market Potentials and Business Applications for Photovoltaic in India 25.10.2013, Berlin, GermanyTimon Herzog, Sandeep Goel, GIZ / ComSolar

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Challenging Energy Future

28/10/2013

Growth assumptions for 2070 1:

• 1.7 Billion population (1.2 today)

• 2000 kWh per capita electricity consumption (625 KW h today)

• 2070 no more (economic feasible) fossil fuels avail able

� 3400 TWh electrical energy required (Germany 2012: 5 94,5 TWh)

�More than tripling todays demand (~ 1000 TW h)1 own assumptions following aggregation of different sources e.g. CIA Worldfactbook, Census data, IEA projections

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Scenario for 3400 TWh non-fossil supply?

28/10/2013

Exemplary calcualation 1:

1200 TWh hydroelectric, wind, biomass & large scale PV

PLUS:

2200 TWh in 540 nuclear power plants (1 reactor every 11 KM on the Indian coast)

OR:

One 3 kWp PV rooftop system on every 4th Indian hous ehold (~1275 GWp capacity / ~ 22 GWp annually from 2013)

� Theoretically enough to do for the PV-Sector!1 Atul H. Chokshi, Indian Institute of Science, Bangalore

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I. About ComSolar

II. Electricity sector in India

III. Playground for rooftop solar

IV. Development of solar – so far

V. Challenges & market requirements

Pic

ture

s: G

IZ, D

MR

C

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Commercialisation of solar energy in urban and industrial areas (ComSolar)

28/10/2013

Around 15 activities for facilitation of solar ther mal and PV applications on behalf of BMU / IKI

Flagship activities:

• www.solarguidelines.in – pathway for project finance and implementation

• Policy support for rooftop solar – policy advisory for MNRE, states and cities

• Solar thermal in process heat applications for industries

• Solar Air Heating in the Himalaya – with Solar-Institut Jülich & SWT Stuttgart

• Demo projects – E.g. :PV metro, Green cricket, IndiaOne

• Capacity building - workshops, trainings, awareness building

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I. About ComSolar

II. Electricity sector in India

III. Playground for rooftop solar

IV. Development of solar – so far

V. Challenges & market requirements

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• Population: 1.2 billion (Nearly 14 times of Germany)

• Area: about 10 times of Germany

• 69% population lives in rural areas

• About 350 million people still depend on kerosene for lighting

• 3rd largest CO2 emitting country but with very low per capita emissions

• 28 states and 7 union territories with strong federal character

India snapshot

28.10.2013

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Thermal; 153,8 ; 68%

Large Hydro; 39.6 ; 17%

Nuclear; 4,8 ; 2%

Wind Power; 19,7 ; 9%

Small Hydro Power ; 3,7 ; 2%

Cogeneration-bagasse; 2,3 ;

1%Biomass Power; 1,3 ; 0%

Solar Power; 1,8 ; 1%

Waste to Energy; 0,1 ; 0%

Renewable energy; 28.9 ;

12%

Grid Connected Installed Capacity – 228 GW1

28/10/2013

1Source: Central Electricity Authority, Ministry of New and Renewable Energy (As on 31.07.2013)

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Thermal comprises of 87% coal, 12% Gas and 1% diesel powerCaptive Generation Capacity in Industries (as on 31-03-2011)=34,444.12 MW

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Electricity demand & supply gap in India

28/10/2013

• The demand and supply represents only for grid connected households.

• Still, 350 million people have no / not sufficient access to electricity

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Source: Central Electricity Authority, Census of In dia 2011

0,0%

2,0%

4,0%

6,0%

8,0%

10,0%

12,0%

0

200

400

600

800

1.000

1.200

2007-08 2008-09 2009-10 2010-11 2011-12 2012-13*

Ele

ctric

al e

nerg

y in

TW

h

Years

Electrical energy required Electrical energy supplied Shortage (%)

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Agriculture Pumping; 18%

Commercial buildings; 2%

Municipalities; 2%

Domestic; 24%

Industry, 53%

Electricity consumption pattern

28/10/2013

• Huge potential for onsite generation through solar

• Apart from electricity, direct diesel engine drives are commonly used for agriculture pumping applications

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Source: Bureau of Energy Efficiency (BEE)

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Summary

28/10/2013

• India’s biggest challenge is to supply electricity to 1.2 billion people

• Majority of electricity demand in India is met by Thermal power plants

• Renewable Energy (excluding large hydro) constitutes about 12% of supply mix

• The difference between demand and supply of electricity remains between 8-10%

• Domestic electricity supply is the 2nd largest demand segment after industrial

sector for electricity – huge potential for rooftop solar

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I. About ComSolar

II. Electricity sector in India

III. Playground for rooftop solar

IV. Development of solar – so far

V. Challenges & market requirements

Pic

ture

s: G

IZ, D

MR

C

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Retail electricity costs in India (Euro/kWh*)(at 85 INR/EUR)

28/10/2013

• Commercial consumers pay more to subsidize domestic and agricultural consumers (almost free electricity)

• Consumers are facing abrupt tariff hikes.

• Commonly used diesel backup power (~ 30 GW) is too expensive and polluting

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0,08 0,09

0,08 0,07

0,01

0,17

Domestic CommercialLT

CommercialHT

Industrial Agriculture DieselBackup*Average of tariff from four main states

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1100-1300 kWh/m 2 1250-2150 kWh/m 2

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High solar radiation in India

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Results from 10.47 kWp rooftop plant at German House, New Delhi

28.10.2013

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5.52 kWp (Multi-crystalline) and 4.95 kWp (Thin film)

Specific yield: 1442 kWh/kWp/year

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4%5% 5%

7% 7%

11%

8%6% 7%

14%

8%

14%

20%

24%

10%

Korea Japan Germany Italy Australia SouthAfrica

France China USA Canada UK Russia Brazil India World

Comparison of Transmission and Distribution losses

28/10/2013

• Data represents technical and commercial losses

• Largest problem at the distribution level

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Source: Central Electricity Authority

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Major market opportunities

28.10.2013

Large Ground Mounted: Central/State tariff/VGF ���� PPA revenues

Medium size ground/rooftop: REC mechanism ���� REC+PPA revenues

Small/Medium size rooftop: captive consumption & NME ���� Electricity/diesel savings

Diesel abatement– telecom towers �Diesel savings

Rural applications (not covered in this presentation)

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1. Large Ground Mounted

28.10.2013

Parameters State policies Central policies

Policy DiverseNational solar mission(20 GW till 2022)

Plant size 5-50 MW 10-50 MW

Average determined Tariffs

0.07-0.11 Euro/kWh(6.45-9.27 INR/kWh)

VGF – to be determined

Current capacity allocations

About 2 GW 750 MW (JNNSM II. B1)

Time of procurement Ongoing till Q2 2014 Q3/4 2014

Domestic content requirement

No Yes, on 375 MW

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2. Medium size ground/rooftop based on REC mechanism

28.10.2013

• Registered projects – 180 MW

• Accreditated projects – 200 MW

• No domestic content requirement

@ APPC by SERCEur 0.02-0.04/kWh

@ Rate at Exchange Platform

(Euro 109-157/REC*)

Renewable Energy

Electricity

REC

DistributionCompany

Obligated Entity

(Buyer)

RECMechanism

OA / TraderAgreement @

Mutually Agreed Price

1MWh=1 REC* Price fixed only till 2017

Source: www.recregistryindia.nic.in

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OA – Open Access ConsumerSERC – State Electricity Regulatory CommissionAPPC – Average pooled Purchase cost

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3. Rooftop PV for captive supply

28.10.2013

Key drivers of the market

• Retail electricity more expensive everyday (partial solar parity)

• Unreliable conventional grid power

• Expensive and polluting Diesel power

• MNRE Capital subsidy (30%) can be available

• Accelerated Depreciation (80% first year) available

• State Governments come up with additional incentives/subsidies

• Net/Gross metering is being developed in many states

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State policies focused on rooftop

28/10/2013

Net metering

• Bidirectional metering

• Monthly credits

• Annual settlements

States: Andhra Pradesh, Uttarakhand, Tamil Nadu, Punjab, West Bengal

FIT

• Fixed levelized tariff for 25 years

• Eur 0.12-0.13/kWh (INR10.36 -11.57/kWh*)

• Applicable upto 1 MW

States: *Gujarat

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4. Solarizing Telecom Towers

28.10.2013

• 580,000 telecom towers; 5 billion litres diesel consumption/year

• 3 billion Euro diesel expenditure every year

• Diesel power @ Euro 0.17/kWh vs Solar @ Euro 0.09/kWh*

Cell sites Grid availability Description

10% >20 hrs Mainly metro cities like Delhi, Kolkata, Chennai etc.

20% 16-20 hrs Most cities and towns

30% 12-16 hrs Semi-urban and small urban towns

25% 8-12 hrs Mostly rural areas

15%<8 hrsOff grid

Mostly parts of Bihar and some towns of Assam, NE states, UP and J&K

Source: Telecom Authority of India

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* Without battery

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I. About ComSolar

II. Electricity sector in India

III. Playground for rooftop solar

IV. Development of solar – so far

V. Challenges & market requirements

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Market developments so far..

28/10/2013

•Majority of installations are ground mounted large power plants (>2-3 MW)

•Share of rooftops <10% (estimation)

•Long term plans of 20 GW till 2022

0,0

0,9

1,7 1,8

2010-11 2011-12 2012-13 31.07.13

Solar PV installed capacity in India (GWs)

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0,0% 5,0% 10,0% 15,0% 20,0% 25,0%

FIRST SOLARCANADIAN SOLAR

TRINA SOLARSHARP SOLARCHINT SOLARJINKO SOLAR

YINGLI SOLARC-SUN

NEX POWERVIKRAM SOLAR

SUNWELLSOLAR FRONTIER

MOSERBAER SOLARTATA POWER SOLAR

LANCO SOLARWAAREE ENERGIES

SUNTECHDUPONT APOLLO

REC GROUPEMMVEE

WEBEL SOLAR/RENESOLASCHUCO

ABOUND SOLARAVANCISMIASOLE

LDK SOLARHANWHAT-SOLAR

SUNNER SOLARSOLAR WORLD

BHELJAIN IRRIGATIONPREMIER SOLARSCHOTT SOLAR

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Market share of Module suppliers

Source: BRIDGE TO INDIA

Share of German companies – 2%

* This analysis should be taken as just an indicato r and actual market share may differ

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Market share of third party EPCs

28/10/2013

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0,0% 2,0% 4,0% 6,0% 8,0% 10,0% 12,0% 14,0% 16,0% 18,0% 20,0%

MOSERBAER SOLARLARSEN AND TOUBRO

LANCO SOLARSTERLING AND WILSON

JUWI ENERGYVIKRAM SOLAR

MEGHA ENGINEERINGREFEX ENERGY

TATA POWER SOLARWIPRO ECOENERGYWAAREE ENERGIES

ARIES WAAAREECIRUS SOLAR

INDU PROJECTSMAHINDRA SOLAR

RAYS EXPERTSEMMVEE SOLARENFINITY SOLAR

ELECTROTHERM IMMODOPREMIER SOLAR

SUNTECHNICSBHEL

PHOTONCHEMTROLS SOLAR

MADHAV POWERABB

INSOLARE ENERGYSOLAR SEMICONDUCTOR

SUNBORNE ENERGY

Source: BRIDGE TO INDIA

Share of German companies – 6.4%

* This analysis should be taken as just an indicato r and actual market share may differ

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0,00% 5,00% 10,00% 15,00% 20,00% 25,00% 30,00% 35,00%

SMA

BONGFIGLIOLI

ABB

POWERONE

AEG

SCHNEIDER ELECTRIC

SIEMENS

SATCON

ELTEK VALERE

ELECTRONICA SANTERING

DELTA

HITACHI-HIREL

FECON

REFUSOL

IDS

INGETEAM

HELOFAX

KACO

FRONIUS

BOSCH

GAMESA

Market share of Inverter suppliers*

28/10/2013

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Source: BRIDGE TO INDIA

Share of German companies – 33.3%

* This analysis should be taken as just an indicato r and actual market share may differ

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I. About ComSolar

II. Electricity sector in India

III. Playground for rooftop solar

IV. Development of solar – so far

V. Challenges & market requirements

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Challenges

28/10/2013

• Roofs are generally occupied

• Ownership structure is complicated

• Project debt financing is still developing

• High interest rates (12-14%)

• Insecurity in terms of building planning

• Land procurement is a tough task

• No strict quality assurance

• Price level / expectations are very low (e.g. SECI Tender EUR 1.02 / Wp)

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•Highly cost driven market – nothing gets sold if it does not make economic sense

•Robust equipments and good quality execution – considering Indian conditions

• Innovative products e.g. portable, plug and play systems

• Integration with Diesel generators/UPS systems

•Hybrid system – low grid availability

• Innovative economic/financial solutions

What is required in the Indian market?

28/10/2013

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Requirement for bidirectional invertersSource: PI Experts / GIZ, Comsolar

28.10.2013

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Frequent load shedding requires economic solution for:

Grid feeding / net metering ����

Off-grid / Island mode ����

Pure captive use ����

Back-up / DG integration ����

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Thank you!

Timon.Herzog@giz.de | Sandeep.goel@giz.de

ComSolar - Indo German Energy Programme

Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH

GIZ Office New Delhi

www.giz.de - www.comsolar.in

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Annexures

28.10.2013

Seite 3428/10/2013

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Policy framework in India

Seite 35company presentation 201228/10/2013

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