Softdisk Solar
INDIAN SOLAR INDUSTRY GROWTH DOUBLES IN LAST 18 MONTHS
The solar industry which has immense potential for a tropical country like India where around 25% of house holds in rural areas, do not have access to electricity (24x7), says our new research. In January 2016 the Prime Minister of India Shri Narendra Modi, and the President of France Mr François Hollande laid the founding stone for the headquarters of the International Solar Alliance (ISA) in Gwalpahari, Gurgaon. The ISA will focus on promoting and developing solar energy and solar products for countries lying wholly or partially between the Tropic of Cancer and the Tropic of Capricorn. The alliance of over 120 countries was announced at the Paris COP21 climate summit. One of the hopes of the ISA is that wider deployment will reduce production and development costs and so facilitate increased deployment of solar technologies, including in poorer and more remote regions. A glimpse at the table below will give you an idea of growth.

The industry supposed to have rapid growth over the past few years and is projected to grow further in future is actually not able to incre the pace of growth down mainly due to REC & RPO obligations.

Although MNRE was setup the with view of providing a level field and increase Domestic Content Requirement, (DCR), The domestic cell available today is inferior in quality, thus effecting the quality of modules as compared to Germany, Taiwan and to some extent China. Also the cost differential is high on domestic modules. This is where Govt. wants bring in anti dumping laws, which are opposed By EPC companies while welcomed by Panel manufactures. Most of the Indian Panel manu-facturer are using imported cells. Except for those required for DCR compliance.

Recently SWELECT became the first company in India to execute 10 MW Domectic Content Requirement (DCR) project.

The report provides an insight on various Major Panel manufacturers in India, various small & Mid level companies forming the major chunk of solar industry in India. It thoroughly examines current industry trends, with focus on recent changes in the state and country level regulatory environment. The report will assist investors to understand the market dynamics and get an insight into the future outlook of solar power market in India.

Many states have started promoting solar based applications by giving incentives and tax savings. States like Gujarat and Rajasthan have formulated transparent and progressive regulatory framework in order to boost the solar industry. Besides, states like Tamilnadu, Uttar Pradesh, West Bengal, Maharashtra and Chandigarh are promoting solar energy in rural, urban and semi urban areas. More recently Madhya Pradesh has joined the Solar Promotion bandwagon. The forecast given in this report is not based on a complex economic model, but is intended as a rough guide to the direction in which the market is likely to move.

Here is a brief of what various states have achieved :

GUJARAT : 1023.30 Mw of solar projects have been installed under the Gujarat state solar Policy, with many project delayed. Though Gujarat announced tariffs for 2016-18, which are about 20 per cent lower compared to 2015 tariff levels. it does not have any plans to announce any targets or installation goals. The State of Gujarat has commissioned Asia’s largest solar park at Charanka village. The park is already generating 2 MW solar power out of its total planned capacity of 500 MW. The park has been functioning on a multi-developers and multi-beneficiaries paradigm and has been awarded for being the most innovative and environment-friendly project by the CII.

With a view to making Gandhinagar a solar-power city, the State government has launched a roof-top solar power generation scheme. Under this scheme, the State plans to generate 5 MW of solar power by putting solar panels on about 50 state government buildings and on 500 private buildings.

KARNATAKA : To achieve commercial viability and expeditiously operationalize the Renewable Energy Projects. to enhance the contribution of Renewable Energy in the total installed capacity of the state to about 2400 MW by 2018. There are no updates as to whether PPAs were signed or if financial closure was reached. The Karnataka Renewable Energy Development Agency has also submitted recommendations to the state to develop 1.000GW of Solar Energy in five years or 200MW per year. KREDL willing. However slowdown is visible as only 78.22Mw was commissioned in 18 months ending Sept, 2015.

RAJASTHAN : The state of Rajasthan has installations of completed 1295 MW of solar projects currently. The tarhet is acieve around 2000 MW by March 2017, which seems dificullt

ORISSA : The Orissa Renewable Energy Agency (OREDA) called for tenders auctioned off a 54MWp. The project includes Installation of Grid Connected Rooftop Solar Photovoltaic Power Plants with aggregate 54 MWp capacity in various districts across the state on Pilot basis. The project aims to reduce the fossil fuel based electricity load on main grid and make the buildings self-sustainable to the extent possible. Projects can be set up on the concept of Net Metering/ Feed-in-Tariff on Pilot Basis. The individual project will normally range from 10 kW to 500 kW size. The projects below 10 kW may also be considered for residential sector. OREDA plans to call a tender to develop another 45MW in the next few Months.

MADHYA PRADESH : Madhya Pradesh Power Management Company Limited has recently signed PPAs for 225mw of PV projects with five project developers under a reverse auction mechanism. Those going in for MNRE subsidy were in for a rude shock as subsidy schemes were discontinued and crore & cores of money of various company got stuck. There is an utter confusion as customer still sites MNRE guidlelines where vendor wondor how to convince. The Welspun Solar MP project, the largest solar power plant in the state, was set up at a cost of 1,100 crore (US$160 million) on (3.05 Sq KM) of land and will supply power at 8.05 kWh. A 130 MW solar power plant project at Bhagwanpur in Neemuch was launched by Prime Minister Narendra Modi. This is the largest solar producer and one of the top three companies in the renewable energy sector in India.

An upcoming 750 MW solar power plant project in Madhya Pradesh in the district of Rewa will, when completed, be the world's largest solar power plant, replacing the Desert Sunlight project in California which currently has that distinction.

MAHARASHTRA : Maharashtra State Power Generation Company Limited(MahaGenco) has 150MW of solar power projects under development by three companies. State plans to develop a 100MW project in Usmanabad district, 25mw in Parbhani district and 125MW in Yavatmal district are in advanced stages of planning.

Solar market too has become highly fragmented both product-wise as well as number of companies jumping into the Solar bandwagon.

Vikram Solar completed 5MW in Tamilnadu in a record time. Vikram Solar has just completed 50MW in Tamilnadu in a record time. Vikram is working on the technology where by the DC to AC conversion can take place module level itself. These module have been successfully tested and are currently under going burn test at their own setups. 1500 Watt panel, which they say can be used as roof.
Waaree Energies Ltd., a Mumbai based PV Manufacturer has taken huge projects in Gujarat and have started acquiring smaller solar companies having strong Solar experience.

Swelect Energy Systems Ltd, formerly Numeric Power Systems Ltd, a BSE listed company sold of its UPS Business Unit for over 850 crores to concentrate on Renewable Energy, space. In just a few months the company has set up and commissioned two solar Power Plants and a Wind Power Plant and has over 2000 rooftop installations to its credit. The company has accquired HHV Solar, a reputed SPV Panel manufacturer and has invested heavily on increasing the plant capacity from 35Mw to 100Mw.
Emmvee another panel manufacturer is planning for Solar cell manufacturing of 500Mw, Module expansion plan of 1000 Mw & project development and EPC implementation by 1000 Mw by 2019.

Innovative Solar is in the process expansion as it has come up with 300 Watt modules which are very sturdy and have very high yield these modules come up with IEC certifications.

Demand for solar products has been rapidly rising over the years, especially in rural areas, and is expected to continue growing exponentially during our forecast period (2016-2017). Solar PV Off-grid applications, Roof Top applications and even Megawatt sized Solar Power Plants have started coming up although not at the same speed as initially thought. MNRE though initially announced subsidy and made every body was lured. By abolishing subsidy since Aug 12, 2014, it has come back to haunt the companies.

Orders taken prior to that date are now held. Chaotic situation is spread amongst the masses, because of lack of clarity. User still believes there is subsidy and feels that the Solar companies are cheating them. All Solar street lighting systems projects, home lighting systems, power plants, solar-cookers and solar pumps are being kept on hold for lack of clarity applications in India. Finally India has well crossed the 8 Gw as on July 2016. By March 2017 we expect the SPV installation to cross 9Gw, however Govt. ambitions of 40 Gw by 2020 remains a distant dream.
 

Indian PV module & cell manufacturers have an obvious disadvantage against Chinese players in terms of scale and govt. assistance. Due to these factors, the imports from China are somewhat cheaper than domestically manufactured goods. While Indian PV modules manufacturers, such as Microsun, are thriving in spite of this price gap due to better quality and better service support, the Indian cell manufacturers are not doing so well and the domestic PV cell manufacturing is pretty much at a standstill.

On hurdle faced while implementing major projects : For MW scale projects, the initial hurdle is land acquisition and registration. Some states (e.g. Rajasthan) have created a single window clearance which simplifies the process. However, in majority states, you still have to deal with the bureaucratic hurdles. The next challenge, for both Mw & kw scale projects is power evacuation. Also policy implementation issues around forward looking policies like the REC - RPO mechanism but the lax attitude of the state governments towards strictly enforcing the RPO mechanism has led to a situation where the REC market has not been successful so far. Once the state governments start strictly enforcing the RPOs, there will be a demand for the RECs which will create the demand for solar power as envisaged.
Better infrastructure, arrangements & models to spur the photovoltaic industry and consumption of the PV products. Net Metering needs to take of in a big way, this will allow people to have their own Rooftops to generate power for their own good.
 

Being the leading brand in Solar PV module manufacturing in India, we aim to positively move forward towards maximum solar production capacity through constant development and use of innovative technology in this field. We are coming up with new technology called ‘Merlin’ for Modules, which would increase the applications of Solar PV. We are also in the process of getting all the latest certification requirements from various International Markets for new products such as higher system voltage, Fire class etc. Currently, our solar capacity production is 500 MW and we are planning to expand it by up to 1000 MW by the end of 2016. Ever since the arrival of Modi Government, the solar energy sector in India has boomed in past couple of years. However, at the global level India is still a lightweight market, especially when compared to established nations in this realm like – the United States, Germany and China. This certainly poses a challenge for a developing country like India as it needs to step up and upgrade its solar energy manufacturing capacity to gain prominence among such major players. This is a welcome move by MNRE as it enables positive growth of domestic solar module manufacturers in India as well as ensuring proper usage of domestic solar materials. Although most states have not taken any actions on this front, there are some who have begun to incentives these manufacturers in various ways like providing land for international solar manufacturing plants.

Over the last century, the energy storage industry has continued to evolve and adapt to changing energy requirements and advances in technology. Energy storage systems provide a wide array of technological approaches to managing our power supply in order to create a more resilient energy infrastructure and bring cost savings to utilities and consumers. If one looks at the developments happening in energy storage, it’s very encouraging. Battery storage has emerged from the fringes of the power sector to challenge both industry conventions and traditional generation.
 

Softdisk by its conservatives estimates, believes that 40 GW opportunity till 2020 is the most likely scenario . The Indian solar market is a key future growth market for PV.

India’s installed capacity as of quarter ending 31st July 2016 was 8.06 GW, which is still negligible as compared to more mature markets such as Germany. However, the first two quarters of 2016 alone have seen additions of 530.27 Mw to Indian PV installed capacity, more projects are unde completion.

According to Softdisk report Tamilnadu as 30 September 2016, with a total installed capacity of 2100MW has become the state with largest installed capacity. Not reflected in our table, as it is up to 31st July 2016.

There are also external factors in India challenging its solar industry, namely high inflation and consequently high interest rates, slowdown in GDP growth, a several depreciated rupee and relentless corruption scandals of the previous Govt. Low bids with high interest rates in the range of 13 to 15 per cent make it challenging to borrow in India. Most Indian Banks look at these projects as risky and look into it only after land acquisition and registration & PPA. Statutory approval are completed & the number of successfully executed quality project that can last 25 years.

Softdisk believes that the Govt. & regulators must :

  • Develop renewable Energy Laws mandatory.
  • Set-up standards for renewable energy.
  • Conducting resource assessments.
  • Supporting research and development activities thru investments.
  • Early timing of policy announcements and ease of implementation.
  • Addressing concerns relating to enforce-ability of PPAs.
  • Banks to brought in loop for financing Solar projects with renewable energy purchase obligation.

These changes will allow make in India a Roaring Tiger.

The coming year will see some movement and interest by market players to explore new business models/segments within the solar industry in India. Further, the falling cost of solar will lead to new projects in the captive commercial space as solar tariffs become competitive with commercial and industrial grid prices in various parts of the country.

The rating does not include major EPC players such as BHEL, ADANI SOLAR, WELSPUN, BEL, CEL, TATA Solar, BOSCH, Solar Semi-conductor & Moser Baer India Limited, LANCO, L&T, INDO SOLAR, Reliance Power, Mahindra Power, Wipro-ECO which have diversified interest etc.



 

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