Indo-German Chamber of Commerce

Policy Framework and Market Development:

Solar Market in India

Dr. Ashvini KumarSenior Director, TERI

Former Managing Director, Solar Energy Corporation of India Ltd., New Delhi

Bengaluru9 October 2018

Global Perspective

• 2017 emerged another record-breaking year with the largest ever increase in RE power capacity of 178 GW. Solar PV, wind and hydropower accounted nearly 55%, 29% and 11%, respectively.

• Total renewable power capacity more than doubled in the decade 2007-2017.

55%22%

17%

5% 1%

World RE 2017 (GW)

Hydro Wind Solar Bioenergy Geothermal

Wind- 514 GWSolar – 391 GW

Bio-energy – 109 GW

Source: IRENA Statistics 2018

Global Perspective

• 17 countries generated more than 90% of their electricity with renewable sources in 2017; hydro power was the main source.

• Three of them – Uruguay, Costa Rica and Ethiopia – have significant contribution from wind power.

India’s Energy Generation: Status

Total Thermal, 2,22,907,

65%

Hydro , 45,293,

13%

Nuclear, 6,780, 2%

RES, 69,022,

20%

Fuel - wise (31 March 2018), MW

84,517 1,03,9751,55,510

050,000

1,00,0001,50,0002,00,000

State Sector CentralSector

PrivateSector

Sector-wise, MW

Source Achievement

(2017 – 2018),

MW

Cumulative

achievement,

MW

Wind Power 1,766 34,046

Solar Power - Ground 9,010 20,588

Solar Power - Roof Top 353 1,064

Small Hydro Power 106 4,486

Biomass 529 9,363

Waste to Power 24 138

OFF-GRID/ CAPTIVE POWER (MW - eq)

Waste to Energy 5.5 172.15

Biomass Gasifiers 0.92 163.37

Aero-Generators/Hybrid systems 0.14 3.29

SPV Systems 216.63 671.41

Total 223.19 1010.22

Total

Installed

Capacity:

344.02 GW

India’s Clean Energy Initiative

Increasing share of non-fossil fuel in the total installed capacity to about 40 % by 2030 and to create additional Carbon Sink of 2.5 to 3 Billion Tonnes of CO2 Equivalent

Upscaling target for RE Capacity installation to 175,000 MW to result in abatement of 326.22 million tons of CO2 eq. /year. Grid Connected Solar Power: 100,000 MW with 40,000 MW of RT Solar

Wind Power: 60,000 MW

Biomass Power: 10,000 MW

Small Hydro Power: 5,000 MW

National Solar Mission: Implementation Selection of projects through Competitive Bidding

Solar Park scheme by Government of India

Promotion of off-take of solar power 8% of electricity consumption excluding hydro power, mandated from solar energy by

March 2022. (Solar RPO)

Renewable Generation Obligation (RGO): New coal/lignite based thermal plants after specified date to also establish/ procure/ purchase renewable capacity

Capital grant for roof top solar in domestic and institutional sectors

Policy on the concept of “Polluter should pay”; levied cess on each tonne of coal purchased by generating companies to create National Clean Energy Fund .

Regulatory Provisions Exemption from the requirement of environmental clearance

Must-run status in merit order dispatch of power

Exemption for wheeling charges on Central Transmission Utility

Payment security mechanism

Solar Parks: Concept and Approach

Basic aim is to achieve targets under National Solar Mission through

accelerating the development of solar power projects, by providing an area that is well characterized and properly infra-structured for transmission and evacuation facilities, and

thereby minimizing the risk as well as the permitting process.

SOLAR PARKS are established jointly by Central and State governments.

Land area by the State Governments and support to setting up infrastructure by the Central Government.

Solar Park may hold several solar power plants each developed by separate or the same groups/promoters.

Filling up of Parks through solar projects under Central or State Government’s schemes; generated power could be procured by any of the States. Host State to buy at least 20% of the capacity of solar park.

Status of Solar Parks(as on 15 May 2018)

• Total number = 41

• Aggregate planned Capacity = 26,144 MW

Evolution of Solar Tariff in India

12.16

8.77

8.368.37

8.018.73

6.82

7.07

6.768.22

8.41

7.148.67

5.84

8.457.346.73

7.749.18

6.955.41

7.527.177.175.825.7

8.04

5.655.77

4.63

4.63

4.35

4.78

54.79

4.675.38

5.02

4.35

3.313.15

2.62

2.44

02468

101214

Tariffs (INR/kWh)

2016-17

2015-16

2014-152013-142012-132010-12 2017-18

INR 2.44 = US$ 0.0331 US$ = INR 73.0

Rooftop PV Arrangement

• Rooftop PV is an arrangement to utilize the vacant roof space to generate electricity.

• The electricity generated can be utilized for self-consumption and/or grid feeding.

• Different types of inverters/PCUs are used for this purpose;• Off-Grid Inverter– Stand Alone Mode

• Grid Tied Inverter– Matches power quality with grid and shut down if power is not available in grid (even in case of self consumption mode)

• Hybrid inverter– This allows the rooftop PV system to be connected with grid and works in isolated mode, if grid is down

PV Solar Array

Transmission

Network

Distribution

Network

Distribution

Transformer

Consumer

Meter Inverter (PCU)

Self

Consumption/

Grid Feed

Roof Top Potential in India

Monday, October 15, 2018

• According to 2011 Census data, India is having

• 330 million houses.

• 166 million electrified houses.

• 140 million houses with proper roof (Concrete or Asbestos / metal sheet).

• 130 million houses are having > 2 rooms.

• Average house can have 1-3 kWp capacity.

• The commercial/industrial establishments can have larger capacities.

• Potential of about 40 GW capacity emerges even if we consider 1 kWp system on 30% roofs only.

State-Wise Solar Rooftop PV Potential (MW)

20836 MW 11006 MW

Schools Hospitals*State-wise potential does not include share of private hospitals and dental colleges

3292

64

9931427

1128

23031

983834

241 293

945

2993

810

34054021

489527

8… 952

3073

674

2340

37

925

0

500

1000

1500

2000

2500

3000

3500

4000

4500

0

500

1000

1500

2000

2500

3000

3500

4000

4500

PV potential in Hospitals (MW) PV potential in Schools (MW)

PV potential in Colleges (MW) Total PV potential (MW)

Colleges

10626 MW

Business Models: Self-owned Net-metered Model

System Owner

Installer

Bank

UtilityReduced electricity Consumption

Payment

Useful to commercial and industrial consumers as total energy consumption is significantly more than the solar generation

One of the most popular business models in India as well as USA, Japan etc.

Avoids cost of energy storage (contingent on grid availability)

Value proposition comes from the difference between the Consumer tariffs and the cost of solar energy generation from rooftop solar installation.

RESCO Business Model

• Third-party ownership model for reducing electricity bill without committing initial investment and assuming O&M responsibilities

• Third Party may lease out the entire system to the Rooftop Owner and sell power to him through a long term PPA to replace Utility-based power supply.

• Third Party may also take rooftop on lease from the Rooftop Owner, generate power and sell it to the Utility or to the Rooftop Owner through a PPA (at price called Feed-in Tariff, i.e. FiT).

Roof Owner

Third Party

Bank

UtilityConsumption

Payment

Loan EMI Payments

Loan

Roof top Solar Installations: Indian Status

544

1088

404503

Commercial Industrial Public Sector Residential

631, 25%

1907, 75%

Opex Capex

Implementation model wise

Opex capacity additions grew 164%

Total Capacity Installed by 31 March 2018 = 2538 MWSource: Bridge to India

Net metering Regulations

StateCap on PV

Export

Capacity w.r.t

Contract load

Max. Capacity

kWp

Min. Capacity

kWpState

Cap on PV Export

Capacity w.r.t

Contract load

Max. Capacity

kWp

Min. Capacity

kWpAndaman & Nicobar Island

100% 100% 500 1 Lakshadweep 100% 100% 500 1

Andhra Pradesh 100% NA 1000 NA Madhya Pradesh 100% 100% NA NA

Arunachal Pradesh NA NA 1000 1 Maharashtra NA 100% 1000 1

Assam NA 40% 1000 1 Manipur 90% NA 1000 1

Bihar 90% 100% 1000 1 Meghalaya NA 100% 1000 1

Chandigarh 100% 100% 500 1 Mizoram NA 100% 1000 NA

Chhattisgarh 150% 100% 1000 50 Nagaland NA NA NA NA

Dadra and Nagar Haveli 100% 100% 500 1 Odisha 90% 100% NA NA

Daman and Diu 100% 100% 500 1 Pondicherry 100% 100% 500 1

Delhi NA 100% NA NA Punjab 90% 80% 1000 1

Goa 100% 100% 500 1 Rajasthan NA 80% 1000 1

Gujarat 100% 50% 1000 1 Sikkim NA 100% 1000 1

Haryana 90% 100% 1000 NA Tamil Nadu 90% 100% NA NA

Himachal pradesh NA 80% 1000 1 Telangana 100% 100% 1000 1

Jammu & Kashmir 90% 50% 1000 1 Tripura 110% 100% NA NA

Jharkhand NA 100% 1000 1 UIttar Pradesh 100% 100% 1000 1

Karnataka NA 150% 1000 1 Uttarakhand 95% NA 500 1

Kerala NA 100% 1000 NA West Bengal 90% NA 2000 5NA – Not available

Renewable Energy Activities at TERITERI is mainly engaged in:

• Research: Solar thermal and PV, thermo-chemical and bio-chemical treatment processes, Applied and industrial research through development of prototypes and product industrialization

• Technology Transfer: dissemination and transfer of design to industry for production and market purposes

• Project management Consultancy Services: Renewable energy assessment studies, Policy research, Setting up projects including roof top solar systems, Developing renewable energy plans, market research and business models .

• Certification and developmental testing

• Training and capacity building : activities aimed at human training, knowledge and awareness creation

• Knowledge partner of ISA, and development of solar road maps for ISA countries.

Rooftop Solar Web-GIS Tool For ChandigarhSurvey Time – 15 days, Buildings evaluated physically – 14000, Buildings evaluated digitally – 110,000

Challenges

• Innovative technology use for maximizing generation

• Lack of Commodization• Need to be available off-the-shelf

• Standard packages, especially in domestic category

• Preference for RESCO Mode by Departments / Corporates• Huge requirement of financing

• PPAs in residential & commercial sector considered less bankable

• Long tenure of PPAs : 25 years

• Skill and Knowledge Gaps with Discoms, SNAs, Developers & Financing Institutions• Capacity is hampered to scale up

• Lack of clarity about financial models, net metering, risk assessment.

19

Thanks!!!

ashvini.kumar@teri.res.in