The solar industry which has immense potential for a tropical country like India
where around 35% of households. Mainly rural areas, do not have access to
electricity, says our new research. The industry supposed to have rapid growth
over the past few years and is projected to grow further in future is actually
slowing down mainly due to REC & RPO obligations, more importantly various SERCs
& Discom’s have filed petitions for stay order against RPO obligations.
Although more efforts are being done to increase the production of Renewable
Energy. 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 thequality 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 EPC companies while welcomed by Panel manufactures. Most of the
Indian Panel manufactures are using imported cells.
The report provides an insight on 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 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 : 1000.05 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.
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 from 2400 MW
to about 6600 MW by 2016. 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 sanctioned and installations is
either completed or underway for 1777.1 MW of solar projects currently.
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. Madhya
Pradesh also recently announced a solar policy to fulfill its RPO
obligations with 150 Mw commisioned thru Welspun. 563.58 Mw was added in the
last 18 months ending September 2015.
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. 363.70 Mw was added in the last 18 months ending September 2015.
JHARKHAND : Based on RPO Policy, the state is targeting 300 MW of solar
power projects to be developed in the near future. Off this 200 MW has
already been auctioned. However work is struck because of pricing issues.
Only 16 Mw was added in the last 18 months ending September 2015.
UTTAR PRADESH : The Uttar Pradesh New and Renewable Energy Development
Agency recently released its drafts solar policy. The state has set a goal
to achieve 1,000 MW of solar installations by march 2017. The draft was
approved by the cabinet in January 2015. UP added 71.26 Mw in the last 18
months ending September 2015.
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. 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 1700 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.
Consul is in the process expansion has accquired Megatech & Neowatt which
Integrates as well as manufactures SPCU which has IEC certifications
A 16 GW opportunity till 2020 - the Indian solar market is a key future
growth market for PV :
 India’s
installed capacity as of quarter ending September 2015 was 3.83 GW, which is
still negligible as compared to more mature markets such as Germany. However,
the first two quarters of 2015 alone have seen additions of 530.27 Mw to Indian
PV installed capacity, showing the lacklustreness of the market. The market is
currently mostly driven by FiTs. By introducing the solar Renewable Purchase
Obligations (RPOs) and the solar Renewable Energy Certificate (REC) mechanism,
the government has created a further market instrument to advance solar power 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.
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, BEL, CEL, TATA
Solar, BOSCH, Solar Semi-conductor & Moser Baer India Limited, LANCO, L&T, INDO
SOLAR, Reliance Power, Mahindra Power, Wipro-ECO etc.
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