BRIDGE TO INDIA - India Solar Compas - July 2013

INDIA
SOLAR
COMPASS
July 2013 Edition
Market Dashboard
A snapshot of the
market’s fundamentals
Latest Market Insights
An analysis of the policies,
projects, industry and finance
Key Question
Are tracking systems
viable in India?
Outlook
Projection for the
Indian solar PV market
© BRIDGE TO INDIA, 2013 1

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CONTENTS
1. Overview 01
2. Market Dashboard 02
2.1 Market Compass 02
2.2 Indian Solar Market Prices 02
2.3 Installed Capacity in India 03
3. Key Findings
4. Policies 06
4.1 National Solar Mission 06
4.2 Tamil Nadu Solar Policy 08
4.3 Andhra Pradesh Solar Policy 09
5. Projects 10
5.1 New installations (grid connected) 10
5.2 Status of on-going projects (PV) 12
5.3 Status of on-going projects (CSP) 14
6. Financing 16
7. Upstream Industry 17
8. Key question: Are tracking systems viable in 19

India?
8.1 Overview 19
8.2 Current scenario 19
8.3 Introduction to solar tracker technology 20
8.4 PV module tracker technologies 21
8.5 Comparison of tracking technologies 22
8.6 Factors influencing an investment decision 23
8.7 Financial analysis 24
8.8 Results for the financial analysis 26
8.9 Conclusion 26
9. Outlook 28
9.1 Coming quarter 28
9.2 Long-term outlook 29
10. Annexure 32

LIST OF FIGURES
Figure 2-1: Market compass 02
Figure 2-2: Indian solar market prices 02
Figure 5-1: Grid connected solar projects installed in the previous 10

quarter – April 1st to June 20th 2013
Figure 5-2: Grid connected solar projects installed in the previous 10

quarters not covered in any of the previous editions of
the India Solar Compass
Figure 6-1: A weakening Indian rupee against the US dollar 16
Figure 8-1: Solar angles with respect to a PV module installation 20
Figure 8.2: Types of PV module mounting techniques 21
Figure 8-3: Comparison of hourly generation curves with and without 23

trackers in Rajasthan
Figure 8-4: Variation in expected equity IRR for reduction 26

in the cost of axis tracking (as a % of the CAPEX)
Figure 9-1: Projected quarterly PV installations in India 28
LIST OF TABLES
Table 4-1: Proposed schedule for allocations under batch one of 06
phase two of the NSM
Table 8-1: Projects in India using tracking technology 19
Table 8-2: Gain in yield for various axis tracking technologies 23
Table 8-3: Assumptions for financial analysis 25
Table 8-4: Variation in yield and CUF by technology 25
Table 8-5: Variation in CAPEX by technology 25
Table 8-6: Variation of parameters due to axis-trackers 25
Table 8-7: Variation of generation and EIRR with fixed tilt and 26
trackers
Table 9-1: Long term outlook of various policy based allocations 30
in India

1. OVERVIEW In the previous quarter (April 2013 to
June 2013), the Indian solar market
As most prominent developers in
India have been allocated projects
was predominantly focussed on new under one or multiple state policies,
project allocations in Tamil Nadu, these allocations are also expected
Andhra Pradesh, Uttar Pradesh, to reduce the level of competition for
Punjab, Rajasthan and Karnataka. projects under the NSM. Adding to
Each state allocation came with its this, as developers can opt for project
The market will own set of challenges. However, capacities as high as 100 MW under
overall, they have been able to create the NSM, informed smaller and new
eagerly awaits a significant interest from developers developers will most likely stay away
allocations for a and will fuel demand for components from the bidding based competition.
and EPC in the next year. The signing
capacity of 750 MW of Power Purchase Agreements In our 'Key Question' in this edition,
under batch one (PPAs) has not been completed for we look at tracking technology.
Only about 80 MW of the 1,746 MW
of phase two of most states, except Rajasthan, but it is
expected that the total signed capacity solar PV capacity installed in India
the National Solar will reach more than 1.5 GW. In the is using some form of axis tracking
Mission (NSM). coming weeks, the market will eagerly technology. The question we asked
await allocations for a capacity of 750 was: under Indian conditions, does
MW under the National Solar Mission an increased yield and revenue justify
(NSM), phase two batch one, the the additional investment for an axis
process for which is to begin in July. tracking technology? We found that
at current prices, the increase in the
The most worrying aspect of these Equity Internal Rate of Return (EIRR)
allocations has been the kind of increases only marginally when using
uncertainty that we have seen in horizontal single axis and dual axis
Andhra Pradesh and Tamil Nadu. tracking systems. For vertical single
Both the states have had to resort axis tracking systems, the EIRR
to changing the allocation process actually decreases. Even a marginal
significantly from what had originally increase in EIRR probably does not
been communicated. In both cases, justify the additional risk involved in
this had been a result of a poorly adopting this technology. Therefore,
A capacity of over 1.7 planned and executed process. On the low adoption of axis tracking
the positive side, both states and the technology in India makes sense. In the
GW has already been developers have shown resilience and future, the viability of tracking systems
installed in India and a will to make it work. Tamil Nadu now is expected to improve only in so far as
expects to allocate a capacity of 690 their cost decreases as a percentage of
close to 1.5 GW of PV MW. In the case of Andhra Pradesh, the total plant cost.
is currently under the arbitrary and ex-post changes in
A capacity of over 1.7 GW has already
development. BRIDGE tariff identification will hurt investor
confidence more permanently. The been installed in India and close
TO INDIA expects that state is expected to allocate a capacity to 1.5 GW of PV is currently under
India’s cumulative of around 300 MW as compared to the development. BRIDGE TO INDIA
planned 1,000 MW, even after originally expects that India’s cumulative
installed capacity will being oversubscribed. installed capacity will exceed 2 GW
exceed 2 GW by the end by the end of 2013. There's also a lot
of 2013. The sudden influx of allocations helped of momentum building up for new
reduce the intense bidding competition capacity additions in 2014, which could
that had previously characterised the easily exceed 2 GW. This is expected to
Indian market. Allocations in Tamil take India’s installed solar PV capacity
Nadu and Uttar Pradesh were both to 4 GW by the end of 2014. Until
undersubscribed and the average tariff now, 80% of India’s solar PV projects
quoted by the developers across all have been installed in Gujarat and
allocations was more than ` 8 (€ 0.12/$ Rajasthan. In future, the focus will
0.16)/kWh. This is significantly higher shift from the West to the South (Tamil
than the tariff of ` 6.45 (€ 0.10/$ 0.13)/ Nadu, Andhra Pradesh and probably
kWh, currently offered in Rajasthan. also Karnataka).

2. MARKET
DASHBOARD 2.1 MARKET COMPASS
E NA
R S
U
CE
T
MA
NT

NG
GR
OW
GI
IN E R
G EM
2.2 INDIAN SOLAR MARKET PRICES

Indication Trend PV
Lowest FiT ` 6.45/kWh
Interst Rate 13%
Average Capex ` 68 /W
c-Si modules (China, Taiwan) $ 0.63/W*
Thin Film modules (US and Malaysia) $ 0.57/W*
c-Si modules (Japan, Europe) $ 0.70/W*
Thin Film modules (Japan) $ 0.70/W*
*$ rate has been used to avoid effect of currency fluctuations
All prices are for a reference 10MW project

All prices are without duties and taxes
Source: BRIDGE TO INDIA

2.3 INSTALLED
CAPACITY IN INDIA


3. KEY FINDINGS
POLICY 130 MW capacity (a 25 MW project
and a 105 MW project) allocated
1. I n the last quarter (April 2013 to to the company under the Madhya
June 2013) we have seen several Pradesh allocations, by August
state allocations in Andhra Pradesh 2013.
and Tamil Nadu drawing close to
4. Out of the 52 project developers
signing of PPAs.
who have been issued a letter
2. Bidding has also been completed of interest in Tamil Nadu, 41
in the states of Punjab and Uttar developers are from Tamil Nadu
Pradesh. itself and most of them do not have
3. MNRE has now decided to go ahead prior experience of solar project
with the allocations for 750 MW development.
based on VGF. The bidding process 5. The average project size in Andhra
for these allocations is expected to Pradesh is around 10 MW. The state
begin in July 2013. does not have big-ticket projects
4. As an off-taker for NSM projects, like the ones in Tamil Nadu.
SECI will be considered as a less 6. A majority of the capacity in Punjab
bankable option than NVVN. is being developed by experienced
5. MNRE recently announced that players such as Welspun, Azure,
it plans to allocate ‘mega-size’ Essel Infraprojects, SolaireDirect,
projects, i.e., projects larger than Moser Baer, Lanco and Punj Lloyd.
500 MW. The primary objective 7. In Uttar Pradesh, a capacity of
of these projects will be to 135 MW is likely to be allocated
significantly bring down the tariffs. to eight developers. Based on the
6. In Tamil Nadu, originally, the 52 financial bids submitted, it is likely
currently selected developers had that prominent developers such
opted for a cumulative capacity of as Azure Power, Moser Baer, Essel
293 MW. Out of this, 25 developers Infra, Jakson Power and Refex
opted to increase their allocated Energy will receive allocations in
capacity. This has led to a total the state.
allocation of 690 MW. 8. The good news from the CSP
7. Andhra Pradesh is now looking market is that a 50 MW CSP project
to allocate a capacity of 350 by Godawari Power has recently
MW. Of this, seven companies been completed. The next project
with a capacity of 53 MW have to be commissioned is by Reliance
unconditionally agreed to the terms (100 MW).
and tariff and another 27 companies
with a capacity of 297 MW have FINANCING
given their conditional acceptance. 1. In the last quarter (April 2013 to
June 2013), the Indian rupee has
PROJECTS lost over 10% of its value against
1. Mahagenco has commissioned the US dollar. Since January 2011, it
India’s single largest solar PV has lost over 32%.
power plant in Maharashtra. This 2. A weakening rupee increases the
project has a capacity of 125 MW. cost of imported equipment, of
2. In the last quarter (April to June servicing un-hedged external debt
2013) 159 MW of solar PV capacity and of future currency hedging.
and 50 MW of CSP capacity has 3. Keeping the weakening currency in
been added in India. mind, the Reserve Bank of India has
3. Welspun has announced that it will now decided to hold interest rate
be able to commission the entire cuts.

INDUSTRY ANALYSIS 4. Well known manufacturers of dual
axis trackers claim that for dual-
1. The US has won the DCR case axis tracking systems in higher
against Canada, and Canada has latitudes, there can be an increase
had to remove its DCR regulations. in yield of 35% to 40% over the fixed
This might have an impact on other tilt systems.
DCR policies, including in India.
5. According to our analysis, the
2. As per the draft guidelines, the increase in EIRR is marginal while
allocations under the NSM will be using horizontal single axis and
divided into two parts : projects with dual axis tracking systems in India.
a DCR and projects without a DCR. For vertical single axis tracking
3. Of the 2.5 GW capacity allocations systems, the EIRR actually reduces
expected in 2013 across India, for Indian conditions.
including all state policies, only 6. We think that the marginal increase
about 500 MW under the NSM is in EIRR does not justify the
likely to have a DCR. additional costs and risk involved in
4. For anti-dumping duties, the last adopting tracking technology at the
day for stakeholders to submit current cost for tracking in India.
comments and counter briefs
was 23rd April 2013. An interim OUTLOOK
order from the anti-dumping 1. A capacity of 1.7 GW has already
investigations is expected soon. been installed in India and close
to 1.5 GW of PV is currently under
KEY QUESTION: ARE development.
TRACKING SYSTEMS 2. There is a lot of momentum
VIABLE IN INDIA? building up for new capacity
additions in 2014, which could
1. Out of the total 1,746 MW installed easily exceed 2 GW.
in India, only approximately 80 MW
are installed with tracking systems. 3. A capacity of 750MW is expected
to be allocated under the NSM this
2. A seasonal tilt of modules can give year. As the process is expected to
an approximate increase in yield start in July 2013 with PPAs signed
of 5% as compared to the standard only by October 2013, we do not
fixed tilt systems. expect any capacity addition in the
3. The use of horizontal single axis next four quarters under the NSM.
trackers has reportedly increased
the yield of a project in Rajasthan
by 15% at an increased initial
investment of 8% for the project.

4. POLICIES In the last quarter (April 2013 to June
2013), we have seen several state
4.1 NATIONAL
allocations in Andhra Pradesh and SOLAR MISSION
Tamil Nadu drawing close to signing The draft guidelines for phase two
of Power Purchase Agreements (PPA)
Tamil Nadu and Uttar of the National Solar Mission (NSM)
after several ups and downs and a lot were published by the Ministry of
Pradesh bids were of confusion. Bidding has also been New and Renewable Energy (MNRE)
undersubscribed, completed in the states of Punjab on December 3rd 20121. According to
and Uttar Pradesh. Due to the ample
bringing the availability of projects, the bids were
the draft policy, the MNRE wanted to
allocate 800 MW through a bundling
effectiveness of the not as competitive. As we have seen of power mechanism (as in phase one
competitive bidding in the past, developers in all states of the NSM) and 750 MW through a
quoted an average tariff of over ` 8 VGF2 mechanism. For a large part of
process under (€ 0.12/$ 0.16)/kWh. The states were the first quarter (January to March
question. not ready for this kind of a response 2013), the MNRE had been trying to
and Tamil Nadu and Andhra Pradesh arrange for unallocated power from
chose to alter the allocation process the Ministry of Power (MoP) to carry
to try and keep the developers out the tariff based bidding component
interested without going overboard of allocations based on bundling of
with their anticipated budgets. power3. However, as there is only a
Tamil Nadu and Uttar Pradesh bids limited amount of unallocated power
were undersubscribed, bringing available and all states demand access
the effectiveness of the competitive to this power, the MoP has been
bidding process under question. With unwilling to provide it. As a result, the
the highest bid in Uttar Pradesh at ` 15 MNRE has now decided to go ahead
(€ 0.23/$ 0.30)/kWh, which is double only with the allocations for just 750
that of what most other policies are MW based on VGF. The bidding process
offering, it remains to be seen if Uttar for these allocations is expected to
Pradesh will also alter the allocation
The highest bid in process to ensure that it does not end
begin in July 2013.
Uttar Pradesh is at up signing the PPA at this tariff.

` 15 (€ 0.23/$ 0.30)/ Table 4.1 – Proposed schedule for allocations under batch one of
kWh, which is double phase two of the NSM
that of what most other Event Schedule
policies are offering. Notice for the Request for Zero date
Selection (RfS) (expected in July 2013)
Submission of applications and Zero date + 30 days
techno-commercial bid opening
Short-listing of bidders based Zero date + 60 days
on techno-commercial eligibility
and opening of financial bid
Evaluation of financial bids and Zero date + 90 days

issue of the Letter of Intent (LoI)
PPA signing Zero date + 120 days
Financial closure Six months from the date of signing the PPA
Commissioning 13 months from the date of signing the PPA
----------------------
1
Draft policy document: Phase two of the National Solar Mission (NSM)
2
Refer to the October 2012 edition of the India Solar Compass
3
Refer to the January 2013 edition of the India Solar Compass

The draft methodology for the VGF projects for short term gains (refer
based bidding process was released to the October 2012 edition of the
in May 20134. The allocation process, India Solar Compass to read more on
signing of PPAs and handing out of VGF VGF). The MNRE has provided some
will all be handled by the Solar Energy safeguards to prevent this. As per the
Unlike its predecessor, Corporation of India (SECI). According draft guidelines, it has been decided
SECI is not an AAA to the draft, a fixed tariff of ` 5.45 (€ that a hand-out of the VGF amount
rated company and will 0.08/$ 0.11)/kWh will be awarded will take place in three installments.
to projects not availing accelerated The first installment of 25% will be
be considered as a less depreciation and a fixed tariff of ` 4.95 handed out after the delivery of at
bankable option. (€ 0.07/$ 0.10)/kWh will be awarded least 50% of the equipment, another
to projects availing accelerated 50% will be handed out on successful
depreciation. Over and above this, VGF commissioning of the project and
will be provided with an upper limit the remaining 25% will be handed
of 30% of the project cost or ` 25m out after one year of successful
(€ 384,615/$ 500,000)/MW. The exact commissioning. The draft also says
quantum of VGF will be determined by that if the plant fails to generate any
a reverse bidding mechanism. power continuously for one year during
the course of the PPA period or the
SECI is expected to sign separate project is dismantled or its assets sold,
power sale agreements with various SECI will have the right to claim assets
state power distribution companies equal to the value of VGF granted.
across India. In the past, the solar However, no real safeguards have
power from NSM projects has been been provided to ensure the plant's
sold to the states in which projects performance in the long run. In the
are located. More than 80% of all NSM current scenario, the developers will
projects under phase one (batch one place greater focus on reducing the
and two) will be located in Rajasthan. capital expenditure (CAPEX) than on
As Rajasthan is already meeting its optimizing plant performance.
A key concern with solar Renewable Purchase Obligation
(RPO), it is unlikely that the state willAs per the draft methodology, the
the VGF is its impact continue to buy power from the NSM maximum aggregated capacity that
on the long term projects. Rajasthan has land and high a company can bid for under batch
performance of irradiation and is therefore attractive one of phase two of the NSM is 100
for projects under phase two as well. MW. However, the MNRE also recently
projects. SECI, however, will need to devise a announced that it plans to allocate
way to sell power outside of the state. ‘mega-size’ projects, i.e., projects
larger than 500 MW. The primary
Unlike its predecessor in phase objective of these projects will be to
one, the National Thermal Power significantly bring down the tariffs.
Corporation Vidyut Vyapar Nigam The timeline or methodology for
(NTPC NVVN), SECI is not an AAA rated such allocations has not yet been
company and will be considered as a announced.
less bankable option. To counteract
that SECI plans to set up a payment In the last quarter, the SECI has
guarantee fund to cover three months also carried out the second round of
of payments. For this, it will primarily biddings for the implementation of
depend on the National Clean Energy large scale, grid connected rooftop
Fund (NCEF). photovoltaic (PV) systems ranging
from 100 kWp to 500 kWp for a total
A key concern with regards to the allocation of 11.1 MW. The projects
implementation of the VGF is its will be spread across the cities of
impact on the long term performance Bhubaneswar/Cuttack (1 MW) in
of projects and the scope for Odisha, Gurgaon (1.5 MW) in Haryana,
developers to execute low quality Hyderabad (2 MW) in Andhra Pradesh,
----------------------
4
Link: Draft methodology for allocations under batch one of phase two of the NSM

Jaipur (3.1 MW) in Rajasthan, Noida/ rooftop owner first, after which any
Greater Noida (1.5 MW) in Uttar excess power can be exported to the
Pradesh and Raipur/Naya Raipur (2 grid.
MW) in Chhattisgarh. A developer
can apply for multiple projects for a According to BRIDGE TO INDIA, the
Under Under the new minimum allocation of 250 kWp and a new allocation process holds the
mechanism, the bidder maximum of 2 MWp. SECI has released potential to improve on the existing
quotes a consolidated the RfS document on 1st May 2013. The process for disbursing the MNRE
pre-bid meeting was held on May 8th subsidy as (a) it is competitive, which
cost in `/Wp terms for 2013 in Delhi and the last date for the means that the cost to the government
providing a turnkey submission of bids was May 30th 2013. exchequer will be minimized; and (b)
the disbursement of the subsidy is tied
solution. Based on The rooftop PV allocations are different to the performance of the plant, which
this bid price, SECI from most policy-based allocations will ensure that the subsidy is released
will provide a capital in that there is no Feed-in-Tariff (FiT) only for well executed projects. If
offered. Instead, SECI will provide a SECI can allocate such subsidy-based
subsidy of 30% to the capital subsidy of 30%. This is similar projects on a monthly basis and not
winners. to the off-grid capital subsidy scheme limit the allocations to some particular
of the MNRE. The scope of work for cities, the process can become an
bidder includes the identification effective and transparent replacement
and leasing of buildings suitable for of the existing MNRE capital subsidy.
rooftop plants. Bidders also need
to obtain No Objection Certificates
(NOCs) from the relevant distribution
4.2 TAMIL NADU
company (DISCOM) for connecting the SOLAR POLICY
projects to the grid. In addition, bidders
are responsible for the complete In December 2012, Tamil Nadu had
design, engineering, manufacturing, announced a bidding process for a
supply, storage, civil work, erection, capacity allocation of 1,000 MW. Issues
If SECI can allocate testing and commissioning of the grid such as low bankability of the PPA,
connected rooftop solar PV project, limited time available for planning
subsidy-based projects including operation and maintenance and commissioning and the need
on a monthly basis and (O&M) for a period of two years after for developers to meet the lowest
not limit allocations commissioning of the plant. quoted tariff (L1 tariff) for successful
allocation caused the allocations
to particular cities, Under the new mechanism, the bidder to be undersubscribed. Bids were
the process can quotes a consolidated cost in `/Wp received for only 499 MW. Developers
terms for providing a turnkey solution. were subsequently asked to meet the
become an effective Based on this bid price, SECI will lowest submitted tariff which came
and transparent provide a capital subsidy of 30% to out at ` 5.97 (€ 0.09/$ 0.12)/kWh with
replacement of the the winners. The disbursement of the an escalation of 5% per year for 10
subsidy is linked to the performance years – an unattractive tariff for most
existing MNRE capital of the plants: 20% will be disbursed at developers. To avoid a failure of the
subsidy. the time of commissioning after the process, the state then decided to
project can prove a performance ratio offer a ‘workable’ tariff of ` 6.48 (€
of a minimum of 75%. A further 5% 0.10/$ 0.13)/kWh with an escalation
will be disbursed at the end of the first of 5% per year for 10 years. Even
year, and another 5% at the end of the at this tariff, initially, interest was
second year of generation of the plant, limited. In February 2013, the Tamil
if the project can prove a minimum Nadu Generation and Distribution
Capacity Utilization Factor (CUF) of Corporation (TANGEDCO) cleared
15% for the two years. proposals for the first batch of bidders
with a cumulative capacity of 226 MW.
The sale of power and the negotiation
of the tariff is the developer’s Due to the poor response, TANGEDCO
responsibility. The generated power provided additional time until May
is expected to be consumed by the 31st 2013 to developers who originally

chose not to accept the offered tariff
and PPA terms. Some new developers
4.3 ANDHRA
expressed interest and many of the PRADESH SOLAR
existing developers submitted their POLICY
proposal to increase the capacity
In Tamil Nadu, the 52 allocated to them. Originally, the 52 Like Tamil Nadu, Andhra Pradesh has
currently selected currently selected developers had also planned an L1 process for the
final tariff determination but in Andhra
developers had opted opted for a cumulative capacity of 293
Pradesh’s case, the lowest bid is to be
MW. Out of this 25 developers opted to
for a cumulative increase their allocated capacity (read considered at the substation level as
capacity of 293 MW. Out the projects section to know more). compared to the state wise L1 in Tamil
Nadu. (This takes into account different
of this 25 developers This led to a total allocation of 690 MW.
land costs and irradiation levels
opted to increase their No specific changes have been made across the state.) Based on this, 330
companies participated in the bidding
allocated capacity. This to the PPA or any other term for
process and bid for a cumulative
agreement that make these projects
led to a total allocation more bankable. Under the bidding capacity of 1,712 MW. However, in a
of 690 MW. process, the maximum capacity sudden change of process, after the
for project size was limited by the bidding process was complete, the
evacuation capacity listed for each state last week announced that it could
district in a list put out by the Tamil only offer the overall L1 tariff across
Nadu Energy Development Authority the state instead of the substation
(TEDA). Based on that, most projects level L1 tariff. This meant that all
were planned for a capacity between developers, irrespective of their project
1 MW and 10 MW with just one size and location were offered the
project that was as large as 50 MW. same tariff. The L1 tariff was quoted by
However, the newer projects had SunBorne Energy for a 5 MW project
enough time to scout for evacuation with ` 6.49 (€ 0.10/$ 0.13)/kWh. The
capacity on their own. The larger state’s cabinet sub-committee on
capacity has potentially made these power fixed this benchmark price at its
The L1 tariff was projects financially feasible for the meeting on April 23rd 2013.
quoted by SunBorne developers. Other key reasons for the
At this tariff, the state is now looking
new response could be availability of
Energy for a 5 MW more planning and commissioning to allocate a capacity of 350 MW. Of
project with ` 6.49 (€ time and no uncertainty with regards to this, seven companies with a capacity
of 53 MW have unconditionally agreed
0.10/$ 0.13)/kWh. tariff determination through a bidding
to the terms and tariff and another
process.
27 companies with a capacity of 297
Apart from this, new interests MW have given their conditional
were also invited through a public acceptance.
advertisement. All new interests were
to be made to the Chief Engineer Andhra Pradesh also allowed
(CE) at TANGEDCO. Companies such developers to re-negotiate the capacity.
as Reliance Power and Shinsung However, unlike in Tamil Nadu, where
Solar Energy (Korea) are known to 25 developers chose to increase
have submitted their proposals. The their allocation capacity, only three
capacity allocated to these projects, if developers chose to increase their
any, will be over and above the current allocated capacity while six developers
690 MW allocated capacity. chose to decrease their allocated
capacity (read the projects section of
this report for more analysis).

5. PROJECTS 5.1 NEW INSTALLATIONS (GRID
CONNECTED)
Figure 5-1: Grid connected solar projects installed in the previous quarter (April 1st to June 20th
2013)
ANDHRA
RAJASTHAN MAHARASHTRA PRADESH
Size - 50 MW Size - 125 MW Size - 20 MW

Technology - CSP Technology - PV Technology - PV
Off-take - NSM Phase 1, Batch Off-take - Captive RPO Off-take--Third-party
Off-take Industrial sale
captive
of power
Developer - Godavari Green Developer - Mahagenco Developer--EMMVEE
Developer EMMVEE
Energy

JHARKHAND
Figure 5-2: Grid connected solar projects installed in the previous quarters, that were not
covered in previous editions of the India Solar Compass
MADHYA ANDAMAN
ANDAMAN
PRADESH GUJARAT & NICOBAR
& NICOBAR
Size - 2 MW Size - 5 MW
Technology - PV Technology - PV
Off-take -APPC/Open
REC Mechanism
access + RECs Off-take - State policy Island Electrification
Developer - Deepak Spinners Developer - Avatar Solar
Size - 0.5 MW Size - 23 MW

Off-take -APPC/Open
REC Mechanism
access + RECs Off-take - State policy
Developer - M/S Gupta Sons Developer - Ujjawala Power
Private Limited
Size - 1 MW
Technology - PV TAMIL
TAMIL NADU
NADU
Off-take - APPC/Open
REC Mechanism
access + RECs
Size - 1 MW
Developer - Omega Renk
Technology - PV
Bearing
Off-take - RPSSGP
Developer - Noel Media and
Size - 1 MW
UTTAR Advertising Pvt. Ltd.
Technology - PV
PRADESH
REC Mechanism
access + RECs Size - 1 MW
Developer - Star Delta Trans- Size - 5 MW Technology - PV
formers Technology - PV Off-take - REC Mechanism
Off-take - State RPO Developer - SWELECT Energy
Developer - NTPC Systems Limited

RAJASTHAN
Size - 1 MW Size - 10 MW Size - 1 MW
Technology - PV Technology - PV Technology - PV
REC Mechanism
access + RECs Off-take - APPC/Open
NSM Phase 1, Batch
access 2
+ RECs Off-take - APPC/Open
REC Mechanism
access + RECs
Developer - Aman Home Appli- Developer - Jakson Power Developer - Raj Overseas
ance (Allocation 2)
Size - 2 MW
Size - 2.5 MW Size - 3 MW Technology - PV
Technology - PV Technology - PV Off-take - APPC/Open
REC Mechanism
access + RECs
REC Mechanism
access + RECs Off-take - APPC/Open
REC Mechanism
access + RECs Developer - Rajasthan Patrika
Developer - BMD Developer - KC (India)
Size - 10 MW
Size - 2 MW Technology - PV
Size - 1 MW Technology - PV Off-take - APPC/Open
NSM Phase access + RECs
1, Batch 2
Technology - PV Off-take - APPC/Open
REC Mechanism
access + RECs Developer - Sai Maithili Power
REC Mechanism
access + RECs Developer - Lahoti Overseas Company
Developer - Chartered Global
Financial Services Size - 10 MW Size - 2 MW
Size - 1 MW Off-take - APPC/Open
NSM Phase 1, Batch
access 2
+ RECs Off-take - APPC/Open
REC Mechanism
access + RECs
Technology - PV Developer - LEPL Projects Developer - Sanjeev Prakashan
REC Mechanism
access + RECs
Developer - Dindyal Commodi- Size - 10 MW Size - 5 MW
ties Technology - PV Technology - PV

NSM Phaseaccess + RECs
1, Batch 2 Off-take - APPC/Open
NSM Phase 1, Batch
access 2
+ RECs
Size - 15 MW

Developer - Lexicon Vanijya Developer - Sunborne Energy
Technology - PV Services
REC Mechanism
access + RECs
Size - 10 MW
Developer - DJ Malpani Size - 10 MW
Technology - PV
NSM Phaseaccess + RECs
1, Batch 2 Technology - PV
Size - 1.5 MW Developer - NVR Infrastructure Off-take - APPC/Open
NSM Phase 1, Batch
access 2
+ RECs
Technology - PV Developer - Symphony Vyapar
REC Mechanism
access + RECs
Size - 5 MW
Developer - Impact Solar
Technology - PV
NSM Phase 1, Batch
access 2
+ RECs
Size - 10 MW
Developer - Pokaran Solaire
Technology - PV
Energy
NSM Phase 1, Batch
access 2
+ RECs
Developer - Jakson Power
(Allocation 1)
Size - 1 MW
Technology - PV
Off-take - APPC/Open access + RECs
REC Mechanism
Developer - Vinay Corporartion
In the last quarter (April to June has come up in Andhra Pradesh. The
2013), 159 MW of solar PV capacity remaining capacity of 14 MW has been
has been added in India through added in Jharkhand through a single
just three new projects. The largest project. This project has been funded
capacity addition of 125 MW was by a central grant given to the state
achieved in Maharashtra through a specifically for this project that will
single project by Mahagenco. A 20 MW provide power to Jharkhand’s rural and
project for third-party sale of power Naxal5 -affected areas.
----------------------
5
Naxal, Naxalite and Naksalvadi are generic terms used to refer to various militant communist
groups operating in different parts of India under different organizational envelopes. They are
mostly concentrated in the eastern states of the mainland India (Chhattisgarh, Jharkhand, West
Bengal and Odisha).

With the capacity additions in the last rainfall, projects that have not begun
quarter, India has reached a total the construction work early, might
installed solar PV capcity of 1,746 MW. struggle to commission on time.
A capacity of 225 MW A 50 MW Concentrated Solar Rajasthan

Power (CSP) project has also been
had been allocated in commissioned in Rajasthan in the last The financial bids for an allocation
of 100 MW of solar PV projects in
Madhya Pradesh in quarter. This is the only CSP project
Rajasthan were opened on February
to have come up under the NSM
May/June 2012. allocation till date. It takes India’s total 11th 2013. A total of 25 bids worth
installed capacity for CSP to 55.5 MW. over 200 MW had been received. The
lowest bid had been submitted at `
6.45 (€ 0.10/$ 0.13)/kWh by Essel
5.2 STATUS OF ON- Mining and Industries Ltd.Other
GOING PROJECTS bidders were asked to meet this tariff.
(PV) Based on this process, an allocation
of 75 MW has since been announced
Madhya Pradesh by the Rajasthan Renewable Energy
Corporation Limited (RRECL). These
A capacity of 225 MW had been projects include Essel Mining and
allocated in Madhya Pradesh in May/ Industries (20 MW), Sidhidata Solar
June 2012. Projects were awarded to Urja (5 MW), Arjun Green Power
Acme Telepower (25 MW), Alpha Infra (5 MW), Star Solar Power (5 MW),
Properties (20 MW), MK Solar (25 MW), Sungold Energy (5 MW), Energo
Moser Baer (25 MW) and Welspun (25 Engineering Projects (10 MW) and
MW and 105 MW). The 25 MW projects Roha Dyechem (25 MW).
had to be commissioned by June
2013. The 105 MW project by Welspun Essel Mining Industries and Roha
has June 2014 as the commissioning Dyechem have previously developed
deadline. projects in India while the remaining
Karnataka is None of the 25 MW projects have been
are first time developers.
experiencing excess commissioned as of 20th June 2013. All these projects are to come up
rainfall, projects that in the Bhadla solar park, Jodhpur,
In May 2013, Welspun had announced demarcated by Rajasthan Solarpark
have not begun the that it will be able to commission Development Company Limited,
construction work the entire 130 MW capacity (a 25 MW (a subsidiary of RRECL). The park
project and a 105 MW project) by
early, might struggle August 2013, which is significantly
will provide a common evacuation
infrastructure for all the projects.
to commission on time. ahead of the June 2014 deadline for
its 105 MW project. It is expected The planned time period for
that Welspun will opt for a part commissioning of these projects is 12
commissioning of its 25 MW capacity to months from the date of signing of the
avoid delays for this project. PPAs. This means that these projects
would have to achieve financial
Karnataka closure by the end of 2013 to then be
commissioned by May 2014.
Karnataka had allocated 60MW of solar
PV capacity in April 2012. The projects
were allocated to Essel Infrastructure Tamil Nadu
(10 MW), GKC Projects (10 MW), Helena In Tamil Nadu, 52 project developers
Power (10 MW), Jindal Aluminium(10 have been issued an LoI for setting up
MW),SaiSudhir Energy (10 MW), United a cumulative capacity of 690 MW under
Telecom (3 MW) and Welspun (7 MW). the state solar policy. As mentioned
Projects are to be commissioned no in the policies section, 25 developers
later than October 2013. Given that the chose to increase their allocation
deadline is right after the monsoons capacity from the earlier capacity that
and Karnataka is experiencing excess they had bid for (read the policy section

of this report to know more about the are first-time developers. The financial
allocation process and the reasons for viability of projects in Andhra Pradesh
increase in the allocation capacity). is significantly lower than that in Tamil
Mohan Breweries & Distilleries, a Nadu as. Unlike Tamil Nadu, Andhra
project developer from Tamil Nadu, Pradesh is not offering an escalation in
In Tamil Nadu, has increased its capacity from 10 MW tariffs.
given the poor to 110 MW. Similarly, Welspun doubled
bankability of the off- its allocation capacity from 30 MW to The average project size in Andhra
60 MW and United Telecoms increased Pradesh is around 10 MW and the state
taker, most projects its allocation capacity from 5 MW to does not have big-ticket projects like
are likely to be 100 MW. the ones in Tamil Nadu. In the wake
of the weakening Indian rupee against
financed by recourse. Out of the 52 project developers who the US dollar, projects, especially of
have been issued an LoI, 41 developers capacities under 5 MW, that are not
are from Tamil Nadu itself, most of availing accelerated depreciation are
whom do not have prior experience unlikely to be financially viable at the
of solar project development. Lack tariff of ` 6.49 (€ 0.10/$ 0.13)/kWh
of previous project development (read the financing section of this
experience is expected to lead to sales report to understand this better).
and contracts being driven primarily
with a focus to reduce capital costs and Like in Tamil Nadu, a lack of previous
we can expect a time delay and a sub- project development experience is
standard project execution for some expected to lead to sales and contracts
projects. being driven primarily with a focus
to reduce capital costs and we can
Given the poor bankability of the off- expect a time delay and a sub-standard
taker, most projects are likely to be project execution for some projects.
financed by recourse.
Punjab
Engineering, Andhra Pradesh A capacity of 250 MW is likely to be
Procurement and In Andhra Pradesh, seven project allocated under the Punjab policy to
developers with a cumulative capacity 27 developers. The average project
Construction (EPC)
of 53 MW have unconditionally size per developer in the state is 13
companies will get accepted the tariff and terms of the MW but most projects are between
very limited access PPA. These projects are by developers 1 MW and 4 MW. Unlike Tamil Nadu
such as Enerparc from Germany (5 and Andhra Pradesh, a majority of the
to project capacities MW), SunBorne Energy (5 MW) and capacity in Punjab is being developed
in Punjab as most of Essel Mining and Industries (35 MW) by experienced players such as
the developers are and a number of smaller, first time Welspun, Azure, Essel Infraprojects,
project developers. SolaireDirect, Moser Baer, Lanco and
likely to do the EPC Punj Lloyd. The tariffs in the state are
work in-house. Apart from this, 27 projects with a also financially more feasible: The
cumulative capacity of 297 MW have lowest tariff in the state is ` 7.20 (€
conditionally accepted the terms 0.11/$ 0.14)/kWh and the average tariff
of agreement. These projects have across the selected projects is ` 8.22
requested for a change in conditions (€ 0.13/$ 0.16)/kWh. These tariffs are
such as a change in location, an without any escalation and for a period
increase or decrease in capacity and of 25 years.
in some cases, even an increase in
tariffs, if possible. It is expected that Engineering, Procurement and
some of these projects will not end up Construction (EPC) companies will
signing the PPA. Five developers, who get very limited access to project
account for eight projects out of these capacities in Punjab as most of the
27 projects, have previous project developers are likely do the EPC work
development experience and, like in-house. Due to the high land costs in
Tamil Nadu, the remaining developers the state, it is likely that most projects

would opt for the more efficient pooled purchase cost (APPC), most
crystalline module technology over of the new capacity that is now being
thin-film technology. added is for third-party sale of power,
typically to industrial consumers. The
Like in Punjab, tariffs These projects will now begin looking
for finance and are expected to be
power for such agreements is being
sold at tariffs between ` 4 (€ 0.06/$
in Uttar Pradesh are commissioned by July 2014. 0.08)/kWh to ` 6.5 (€ 0.10/$ 0.13)/kWh.
also likely to be high, A large part of new planned capacities
with an average tariff Uttar Pradesh

under this business model is expected
to come up in Madhya Pradesh, Andhra
of over ` 8 (€ 0.12/$ In Uttar Pradesh, a capacity of 135 Pradesh and Tamil Nadu.
MW is likely to be allocated to eight
0.16)/kWh. The tariffs developers. Given the condition for Madhya Pradesh, with one of the
in Uttar Pradesh are previous project experience in the lowest open access (and related)
without any escalation state, all the developers are likely to be
known solar players.
charges, has already seen an
installation of five projects with a
and for a period of 12 cumulative capacity of 6.5 MW under
years. Based on the financial bids submitted,
it is likely that prominent developers
this business model. Tariffs being
offered for third-party sale in Madhya
such as Azure Power, Moser Baer,
Pradesh are around ` 4.5 (€ 0.07/$
Essel Infraprojects, Jakson Power and
0.09)/kWh. These projects rely heavily
Refex Energy will receive allocations in
on accelerated depreciation and
the state.
revenue through the sale of RECs
until 2017. Failure to sell a significant
Like in Punjab, tariffs in Uttar Pradesh
portion of the RECs until 2017 can
are also likely to be high, with an
make these projects unviable at the
average tariff of over ` 8 (€ 0.12/$
given tariffs.
0.16)/kWh. The tariffs in Uttar Pradesh
are without any escalation and for a
Several such projects are being
period of 12 years (read more about the
Tariffs being offered shorter PPA time period in the June
planned across various states in
India. According to market sources,
for third-party sale in edition of the India Solar Handbook).
developers such as Kiran Energy,
Most of the capacity in Uttar Pradesh
Madhya Pradesh are will be allocated to the developers who
SunEdison, Moser Baer and Welspun
are keen on the market for third-party
around ` 4.5 would be undertaking the EPC work
sale of power. First Solar has also
in-house.
(€ 0.07/$ 0.09)/kWh. announced that it is looking to develop
These projects rely Given that in both Punjab and Uttar
such projects in India. In the past, we
have already seen projects by M&B
heavily on accelerated Pradesh most projects have been
Switchgear in Madhya Pradesh and
allocated to the developers who will
depreciation and carry out the EPC work in-house, EPC
EMMVEE in Andhra Pradesh selling
power directly to industrial consumers.
revenue through the providers looking to bag contracts
should focus on the south Indian
sale of RECs until 2017. states of Tamil Nadu and Andhra 5.3 STATUS OF ON-
Pradesh. Projects in these states are
evenly distributed among developers
GOING PROJECTS
with varied experience and in-house (CSP)
capabilities. The MNRE has decided to defer the
penalties that are to be levied on the
Third-party sale of power delayed solar thermal (CSP) projects
with REC benefits by 10 months. A capacity of 470 MW
was allocated under phase one of the
In the first two quarters of 2013, the NSM in December 2010 and these
capacity of REC based projects has projects were to be commissioned
gone up from 2.5 MW to 85 MW. While in May 2013. However, none of the
a significant part of this capacity is still projects have met this deadline.
based on sale of power at the average

A 50 MW project by Godawari Power Under phase two of the NSM, it is
has recently been completed. The expected that a capacity of 1,080
next project to be commissioned is by MW will be allocated for new CSP
Reliance (100 MW), which is expected projects in 2014. The new process
to be commissioned in the next couple will draw from the learning of the 470
Under phase two of of months. MW projects of the phase one. The
the NSM, it is expected complexity of setting up CSP plants has
that a capacity of 1,080 Some of the common reasons cited been systematically underestimated
by project developers for not meeting so far. It is unlikely that these issues
MW will be allocated the deadline are: a delay in laying will be resolved and lessons will be
for new CSP projects in of a water pipeline by the Rajasthan learnt by 2014, especially considering
government, delays in procurement
2014. of heat transfer fluid (HTF) and other
that the previous projects would have
just come up (if at all). Given the issues
components for the plant and delays in that the developers have faced in the
achieving financial closure. However, first phase of the allocations, interest
according to industry sources, the for the new project allocations, if they
main, unstated cause of delay is the happen next year, is expected to be
incorrect solar resource assessment fairly low.
for the projects at the time of planning.
The extension is likely to allow some
projects that had been delayed due to
reasons such as delay in procurement
of HTF or delay in getting water are
likely to come up. Other projects are
expected to be cancelled.

6. FINANCING In the last quarter (April 2013 to June Telepower, Azure Power, Mahindra
2013), the Indian rupee has lost over Solar, Reliance, Punj Lloyd, Tatith Solar
10% of its value against the US dollar. Energy and Universal Solar Systems
Since 2011, it has lost over 32% of its are known to have worked with
value. For the Indian solar market, a international financing. Some projects
For the Indian solar weakening rupee has a severe impact currently under operation, specifically
market, a weakening as it increases the cost of imported those under the batch one of phase
equipment, of servicing of un-hedged one of the NSM and those under the
rupee has a severe external debt and of future currency Gujarat solar policy, are known to be
impact as it increases hedging. operating without a currency hedge.
the cost of imported For these projects, the principal and
The prices for international modules, interest payments are to be made
equipment, of servicing which account for most of the imported in the currency of the loan and the
of un-hedged external equipment in Indian projects, have revenue is in the weakening Indian
more or less stabilized over the past
debt and of future quarter. However, the continuing
rupee. This nullifies the cost advantage
they enjoyed through a lower cost of
currency hedging. weakening of the Indian currency is capital. Developers looking to avail
now expected to lead to an increase finance in any international currency
in the cost of imported equipment in often hedge against such currency
rupee terms. Considering a per MW risk.
capital cost of ` 70m (€ 1.07 m/$ 1.4
m) and assuming that 45% of the Many developers thought that the
project cost is from imported material, rupee was already at an ‘all-time low’
the project cost in India should have back in 2012, when the currency hit `
directly increased by approximately 50 per $ and thus decided against fully
` 3m (€ 46,153/$ 60,000)/MW in the hedging an international debt.The ‘all-
last quarter just because of the rupee time low’ rhetoric has been there since
depreciation. and from there we have seen a further
The prices for downturn to ` 55 per $ and now to ` 60
international modules, A capacity of over 1.5 GW is expected to per $.
be allocated in the states of Rajasthan,
which account for Tamil Nadu, Andhra Pradesh, Punjab Keeping the weakening currency in
most of the imported and Uttar Pradesh. The weak rupee mind, the Reserve Bank of India has
equipment in Indian is likely to impair the viability of these now decided to put a hold on interest
projects. rate cuts. Due to this, on one hand,
projects, have more or the developers will be wary to opt for
less stabilized over the A capacity of more than 300 MW in international debt because the rupee
India has been financed using cheaper depreciation is not halting and on the
past quarter. international debt. Developers such other hand, the cost of debt is expected
as Green Infra, Mahindra Solar, to remain high in the domestic market.
Azure Power, SunEdison India, Acme
Exchange
Figure 6-1: A weakening rate
Indian-rupee
USDagainst
vs INRthe US dollar
62
60
58
Value of 1 USD in INR
56
54
52
50
48 INR/USD
46
44
42
40
Oct-11
Oct-12
Apr-11
Apr-12
Apr-13
Jan-11
Jan-12
Jan-13
Jul-11
Jul-12
Jul-13

7. UPSTREAM India currently has close to 2 GW GW manufacturing capacity in India.
INDUSTRY of module manufacturing capacity, Given that the DCR will extend to
including Moser Baer’s 200 MW of cells, only the manufacturers with cell
thin-film capacity. Much of this 2 manufacturing capability are expected
GW capacity is underutilized.Many to benefit. In India, only eight out of
Indian manufacturers are not able to the 21 manufacturers have a cell
The DCR will be offer prices competitive with leading manufacturing capability.
global manufacturers, primarily from
extended to thin film China. The MNRE has been trying Given the uncertainties about
modules for phase two to promote domestic manufacturing implementation and extent of the DCR,
Indian manufacturers have explored
of the NSM. by enforcing a Domestic Content
a further regulatory route: they have
Requirement (DCR) on projects being
set up under the NSM. The MNRE filed an anti-dumping petition with the
hopes that such protection from Directorate General of Anti-Dumping
international competition will give Duties (DGAD) under the Ministry
Indian manufacturers room to grow of Commerce for the imposition of
and become competitive. anti-dumping duties on Chinese,
American, Malaysian and Taiwanese
In February 2013, the US filed a suppliers (read a complete analysis
complaint with the World Trade of anti-dumping duties and its impact
Organization (WTO) against DCR under on the Indian solar market in the
the NSM. Similarly, the US had earlier January 2013 edition of the India Solar
filed a case against Canada’s DCR Compass).
for renewable energy projects in its
Ontario program. The US has won the The last day for stakeholders to submit
case and Canada has had to remove comments and counter briefs was
its DCR regulations. Even though India 23rd April 2013. An interim order from
is concerned about a pending WTO the anti-dumping investigations is
decision, it is expected to go ahead expected soon.
Of the 2.5 GW capacity with DCR for projects allocated under
Europe has recently imposed a duty
allocations expected batch one of phase two of the NSM. As
of 11.8% on imports of all Chinese
per the draft guidelines, the allocations
in 2013 across India, will be divided into two parts. Project solar products. The duty is set until
only about 500 MW are developers will have the option to August 6th, after which it will increase
either bid for projects with DCR or to 47.6%. The European Commission
likely have a DCR. defined this percentage as the level
to bid for projects without a DCR. In
April 2013, a senior official had made required to remove the harm caused
a statement that 500 MW of the 750 by the dumping to the European
MW would not have a DCR, leaving 250 manufacturing industry.
MW with a DCR. In a recent statement
in June 2013, Dr. Farooq Abdullah, Like in Europe, suppliers in India are
the Minister for New and Renewable also expecting an interim duty for
Energy, stated that the DCR component six months, followed by a final duty.
would likely be 75%. Final clarity on If anti-dumping duties are enforced,
the subject is still pending. However, it they will have a severe impact on
is clear that this time the DCR will be the financial viability of all recently
extended to thin film modules as well. allocated projects, including those in
Tamil Nadu, Andhra Pradesh, Punjab
Of the 2.5 GW capacity allocations and Uttar Pradesh. Developers have
expected in 2013 across India (refer planned with a low pre-duty price
to the outlook section of this report to of imported modules at the time
read more), including all state policies, of bidding (to read more on how it
only about 500 MW are likely to have will impact these projects, read the
a DCR. This in itself will not suffice to January edition of the Indian Solar
change the fortunes of the existing 2 Compass).

The largest manufacturing capacity little or no room for investments into
in India is by Moser Baer of around upgrading manufacturing capabilities
250 MW as compared to several and improving competitiveness. As
As a means to sell their manufacturers in China who are a means to sell their modules and
operating a capacity of over 2 GW keep the production lines running,
modules and keep a year. In the current scenario, a many Indian module manufacturers
the production lines lower capacity utilization of plants have integrated downstream into
running, many Indian in India, at under 15%, has reduced providing EPC services or even
the volumes further for the domestic development of projects. Even though
module manufacturers manufacturers and made it even the EPC segment has low margins, the
have integrated more difficult for them to compete manufacturers are sometimes able
with leading Chinese manufacturers to sell their own modules and keep
downstream into who are operating at more than 10 the production line operating. Vikram
providing EPC services. times the volumes. With often hefty Solar, Waree, EMMVEE Solar and Tata
loan repayments and dwindling Power Solar are examples.
company finances, there has been

8. KEY
QUESTION: 8.1 OVERVIEW 8.2 CURRENT
ARE TRACKING Tracking systems for solar PV power SCENARIO
plants generate more electricity than
SYSTEMS fixed tilt systems during the early Most projects in India use fixed-tilt
structures with no tracking. Out
VIABLE IN late afternoon. This excess generation ofIndia,
hours of the morning and during the the total 1,746 MW installed in
only approximately 80 MW
INDIA? leads to an increased yield and
6
are installed with tracking systems.

an increased CUF for the project. High initial capital costs and a lack
However, tracking systems increase of local experience and expertise for
the project cost. The question is; is installation and support have acted
the additional investment worth the as the key deterrents to the adoption
The adoption rate for increase in yield and revenue? Until of the technology. This situation may
now, very few projects in India have
axis tracking systems used tracking systems. The adoption
change as the cost of tracking systems
comes down, the familiarity with the
is significantly higher rate is significantly higher in mature technology increases and companies
markets, especially Europe. In this
in mature markets, analysis, we will evaluate the financial
start to manufacture and supply the
technology locally.
especially Europe. viability of axis tracking systems in
India. Projects in India that are using axis-
trackers are listed below:
Table 8-1: Projects in India using tracking technology7

Owner/EPC Location/ Project Module Tracking Tracker
State size type/ technology supplier
(MW) Supplier
Reliance Khimsar/ 0.032 Monocrys- Dual Axis Deger-
Solar/ Rajasthan talline/ tracking energie
Reliance Solar Reliance
Sripower/ Anantapur/ 0.375 CdTe/ Single axis Smart-
Solarsis Andhra Abound Horizontal trak
Pradesh Solar
Clover Solar/ Baramati/ 0.82 Monocrys- Single axis Sun-
Clover Solar Maharash- talline/ Horizontal Power
tra SunPower
Gildemeister/ Bhopal/ 0.8 Crystalline Vertical Sun-
SunCarrier Madhya Single Axis Carrier
Omega Pradesh tracking Omega
Mahindra Solar/ Phalodi/ 5 Polycrys- Single axis Sun-
Mahindra Solar Rajasthan talline/ Horizontal Power
SunPower
Backbone Enter- Kutch/ 5 Thin Film/ Single axis SatecEn-
prises/ InSolare Gujarat Nexpower Horizontal vir Engi-
Energy neering
Millenium Syn- Charanka/ 5 Thin film/ Vertical Idee-
ergy/Sun Edison Gujarat First Solar Single Axis matec

tracking GmbH
Millenium Syn- Suren- 9.2 Polycrystal- Vertical Idee-
ergy/ L&T dranagar/ line/ Trina, Single Axis matec
Gujarat Solarfun tracking GmbH
----------------------
6
Collated from MNRE,“Net exported power-summary” accessed here and communications with
tracker suppliers.
7
MNRE,“Net exported power-summary”, Oct 2012-April 2013 accessed here.

8.3 INTRODUCTION global horizontal irradiation and
thereby increase the yield.
TO SOLAR TRACKER
TECHNOLOGY Sun tracking principles
PV modules generate electricity Tracking systems can operate
Astronomical tracking according to two different principles11:
using global horizontal irradiation
is useful in locations (GHI), a combination of direct
Astronomically guided tracking
where the irradiation normal irradiation (DNI) and diffused
irradiation. The DNI component is This is based on astronomical data.
remains constantly uniform in the atmosphere and is The controller software stores the
high and skies are captured only perpendicular to the sunrise and sunset timings along
more or less cloudless absorbing surface. The diffused with angles of incidence of sun rays
component is captured in all the at a location for the whole year. The
throughout the year. directions and is non-uniform. Solar trackers align themselves based
module efficiency and the amount of on this data. Astronomical tracking
incident irradiation govern the yield is useful in locations where the
from a PV module. irradiation remains constantly high
and skies are more or less cloudless
Solar angles for PV throughout the year. This does not
consider the real time weather
module installations conditions or parameters relevant to
The angle θs in Figure 8-1 defines the the energy yield like reflection from
position of the sun with respect to the nearby water bodies or rocks.
module surface. As the sun moves
through the sky, this angle changes Intelligent tracking
during the day and also over the This is based on light detection at
course of the year. Tracking systems a location. The sensors align the
can rotate about the azimuth8 angle α modules towards the brightest spot
Intelligent tracking or change their inclination9 (tilt) angle in the sky. Its major advantage is in
β with respect to ground or perform
is based on light locations which have considerable
both these movements simultaneously. period of cloudy conditions in the year.
detection at a location. This movement along the sun path This takes into account the diffused
The sensors align the allows PV modules to capture more sunlight available at any instant.
modules towards the Figure 8-1: Solar angles with respect to a PV module installation10
brightest spot in the
sky.
Surface’s Zenith
s
Normal
South
----------------------
8
Azimuth is the compass direction from which sunlight is coming. At noon in northern hemisphere,
the sun is directly south and considered at azimuth angle α= 0 degree
9
The angle from ground in the vertical plane at which modules are tilted
10
Castillo JE, Russo JM, Kostuk RK, Rosenberg GA; Thermal effects of the extended holographic
regions for holographic planar concentrator. J. Photon Energy accessed
11
The Alternative Energy eMagazine

8.4 PV MODULE are further classified into two sub
categories based on the axis of rotation
TRACKER relative to the ground:
TECHNOLOGIES Horizontal Single Axis Tracking
There are three approaches to install
A horizontal axis-tracking system
PV modules in a solar power plant:
rotates about an axis that is parallel to
Single axis horizontal the ground. The modules are mounted
tracking systems are Fixed Tilt on rows of steel tube sections running
north to south. The rotational motion
an optimum solution The module mounting structures are
installed at a fixed inclination with required for tracking is controlled by
for locations where respect to the ground. The optimum a drive mechanism13. The additional
land area utilization angle for fixed tilt installations cost of materials in horizontal axis
trackers is primarily because of the
has to be optimized in depends on the latitude of the location
linkages, the central arms and the
and the season.
a project either due drive mechanisms. The number of
to high land costs or Module mounting structures in such rows and the length of a row controlled
installations are the easiest to install by the drive mechanism are decided by
scarcity of land. and are the most stable against the module rating, wind speed and soil
wind loads. They are also the the conditions at the site. It is desirable to
most inexpensive type of installation have lesser motors to keep the failure
in terms of material costs, design, and maintenance points to a minimum.
fabrication and input labor costs. The structures and the drives must
be robust and capable of withstanding
Some installations allow module harsh weather conditions.
output optimization in a certain
period of the year by adjusting the Single axis horizontal tracking systems
tilt seasonally. The provision for are an optimum solution for locations
adjustment is present in the mounting where land area utilization has to be
structures and the change in tilt can be optimized in a project either due to
made manually on the site. Seasonal high land costs or scarcity of land.
tilt can give an approximate increase In the early hours of the morning
in yield of 5% as compared to the and in the late evening, adjacent
standard fixed tilt systems. rows of modules can cause shading
on each other. The backtracking
feature corrects the tilt angle in such
Single Axis Tracking
instances and prevents any loss in
A single axis tracking mechanism yield due to shading. This also allows
follows the daily path of the sun a high density of modules to be
from east to west (azimuth tracking) accommodated in a unit area of land.
resulting in an increase in yield from
the modules. Single axis trackers
Fig 8-2: Types of PV module mounting techniques12

N N
E E
W N
W N W N W N
S S ss E E S E s E
Fixed Singly-Axis-Trackers - Dual-Axis-Trackers -

----------------------
12
SolarGIS database
13
The drive could be mechanical (gears), electrical (motors) or hydraulic.

Example installation in India is approximately 40%15 more than an
equivalent fixed tilt system16.
SunPower has installed a horizontal
tracking system in Mahindra Solar’s 5
MW project in Rajasthan. Dual Axis Tracking
According to SunPower Each electric motor of the tracking
They combine the advantage of both
horizontal and vertical single axis
India, the use of system is capable of controlling trackers. The trackers can rotate about
trackers has increased module movement of around 250-300 the horizontal and also change tilt
kW. However, this is project specific
the yield by 15% at subject to detailed engineering. The
as required. This technology is very
efficient in higher latitudes (above 40
an increased initial trackers also have a backtracking degrees), where the position of the
investment of 8% for mechanism. According to SunPower sun changes substantially with respect
India, the use of trackers has increased
the project. the yield by 15% at an increased initial
to season resulting in highly uneven
duration of daylight in summer and
investment of 10% for the project.14 winter.
Vertical Single Axis Tracking
Fixed tilt systems generate only
Vertical axis-trackers are a better marginal output in cloudy conditions.
alternative for sites having slopes or On the contrary, dual axis trackers,
uneven contour. This is because the that operate on the intelligent tracking
trackers are not interconnected and principle, are capable of pointing to
can operate in isolation. Each tracker the brightest point in the sky at any
rotates about a mounting structure instant and deliver a better yield.
supported on a foundation, which is Dual axis-tracking systems generate
generally made of concrete. Such a substantially greater output in all
systems use the astronomical tracking weather conditions. In a large project
principle. A drive motor adjusts the having multiple dual axis trackers, it is
position of the modules as per the possible that at a given point in time,
movement of the sun at periodic each tracker is pointing in slightly
intervals. The inclination (tilt) angle different directions.
can be optimized for maximum yield
Dual-axis tracking annually or in a particular season of Well known manufacturers of dual
systems in higher the year. axis trackers claim that for dual-axis
tracking systems in higher latitudes,
latitudes can lead to Example installation in India
there can be an increase in yield upto
an increase in yield of SunCarrier Omega has installed an 800 40%17 over the fixed tilt systems.
kWp solar PV system in Bhopal. The
35% to 40% over the pitch (tilt) of the SunCarrier tracker
fixed tilt systems. is fixed at 30 degrees and the module 8.5 COMPARISON
surface moves from east to west every OF VARIOUS
day as per movement of the sun. The
controller automatically adjusts the
TRACKING
drive motor to a new position every ten TECHNOLOGIES
minutes. The drive can operate with An hourly generation curve with
a three stage planetary gear or it can all types of mounting systems was
work with an electric motor with an generated using PVSyst© software.
anti-derailing mechanism. According Installed capacity for this simulation
to a SunCarrier Omega official, the has been assumed at 1 MW for a
yield of vertical single axis trackers location in Rajasthan. This simulation
----------------------
14
As per communications with SunPower India representative. BRIDGE TO INDIA has not verified the
actual plant performance data.
15
SunCarrier Omega presentation
16
The figure is based on the claims of SunCarrier representatives and the actual plant data has not
been verified by BRIDGE TO INDIA
17
DEGERenergie brochure accessed here; Mecasolar, accessed here.

Fig 8-3: Comparison of hourly generation curves with and
without trackersHourly
in Rajasthan for a 1MW
generation system size
comparison
900 Fixed Tilt
Tracking systems 800 Horizontal SAT
Hourly units generated (kWh)

36% Vertical SAT
generate more 700
Dual axis tracker
23%
electricity than fixed 600
tilt systems in the early 500

11%
hours of the morning

400

and in the evening or 300
late afternoon. 200
100
0
6 7 8 9 10 11 12 13 14 15 16 17
Time of Day (Hours)
Table 8-2: Gain in yield for various axis tracking technologies for
a system size of 1 MW

Tracking Technology Total generation18 (MWh) % gain
Fixed tilt 5,967 Base case
Horizontal single axis 6,642 11.3
Vertical single axis 7,370 23.5
An effective way to
determine if tracking
is for a typical summer day. The graph
helps us understand the comparative
8.6 FACTORS
systems make generation between various INFLUENCING
financial sense is to
technologies on a given day. The actual AN INVESTMENT
compare Return of a
generation from a similar 1 MW plant
would vary according to the location, DECISION INTO
PV installation with
irradiation data, weather conditions, TRACKING
a tracking system to
modules used, inverters used, etc.
MECHANISMS
At noon, when the sunlight is A developer‘s decision to opt for
without a tracking perpendicular to the ground, all tracking systems in any project
system. systems generate equally. Tracking depends on its financial viability.
systems generate more electricity than An effective way to determine if
fixed tilt systems in the early hours tracking system makes financial
of the morning as well as in the late sense is to evaluate the change in
afternoon. This excess generation on Equity Internal Rate of Return (EIRR)
a daily basis results in higher annual of a PV installation with tracking
generation and an increased CUF of systems as compared to without a
the plant using such trackers. tracking system. If the EIRR increases
appreciably then the additional
investment (CAPEX and OPEX) can
be justified. In the case that the
EIRR change is negligible (<1%) or
----------------------
18
Values from PVSyst report

even negative, then the additional smaller motors22. This implies different
investment for tracking systems might O&M costs for two trackers belonging
not make sense. to the same technology.
The extra investment for a tracking It is important to avoid common

PV power plants with system includes the cost of the mistakes during the initial installation
single axis and double tracking device, cost of additional of tracking devices as it can have a
materials used for mounting significant impact on the future O&M
axis-trackers require structures, additional cost of the costs. For example: any misalignment
more land than a fixed foundation and installation, additional while installing the foundations for
cost of the additional land required, trackers could lead to additional costs
tilt installation. cost of the additional BoS required and in maintenance over the lifetime of the
the additional man-hours required. project. This would reflect poorly on
Galvanized steel channels mounted the tracking technology even though
on simple foundations are sufficient the problem lies in the workmanship
for fixed tilt installations, horizontal of the installation. There exists a myth
trackers involve modified mounting in the industry that trackers involve too
structures with linkages and a drive many moving parts and therefore are
mechanism19 to control the rotation of not technically reliable. However, parts
modules and the vertically mounted like gears and electric motors are
single axis-trackers and dual axis- commonly used in many engineering
trackers are designed to withstand applications and it may not be correct
high wind speeds of up to 18020 km/ to dismiss the viability of trackers
hr . This results in added cost of civil based on this factor alone.
works (foundation structures) and
installation.
8.7 FINANCIAL
The spacing required between adjacent ANALYSIS
rows of modules determines the
Gujarat and Rajasthan have seen
additional land area required for a
maximum PV installations in the past
solar power plant. PV power plants
Any misalignment with single axis and double axis-
three years in India. Until now, most
projects in Rajasthan use fixed tilt
while installing trackers require more land than a
systems and have reported a CUF of
fixed tilt installation. This is primarily
the foundations for to avoid shadowing due to the rotating
18%-20%23. For the purpose of this
analysis, a location at 20-degree
trackers could lead modules at different times of the day.
latitude having daily global irradiation
to additional costs in An increased area also means more
of 5.5 kWh/m2 and an average CUF of
expenses on land area, electrical
maintenance over the equipment; wiring and mounting
19%24 has been considered.
lifetime of the project. structures used in the project (refer to Performance data of projects with
the financial analysis section below to tracking systems in various projects
understand the CAPEX variation). in India has been collected from
tracking system suppliers and the
Tracking systems incur an additional
performance data available from
O&M cost. Each tracker design
government sources. As there is
is unique leading to different
very little data available for dual axis
maintenance costs. For instance:
tracking systems, the values used in
SunPower’s T0 trackers use one motor
the analysis for dual axis trackers are
to drive up to 400 kW of modules
an approximation based on information
whereas Raytracker believes in a more
provided by experts in the solar
distributed actuation21 using several
industry.
----------------------
19
The drive mechanism could be electrical, mechanical or hydraulic
20
Ideematec GmbH
21
The drive mechanism of the tracker could be actuated electrically, mechanically or hydraulically.
22
Solar Pro, “PV Trackers, Smith; Stephen”, July 2011
23
MNRE,“Net exported power-summary”, Oct 2012-April 2013
24
Average CUF of a solar PV power plant in India using 14%efficiency C-Si modules

Table 8-3: Assumptions for financial analysis
Parameter Assumption
Module efficiency C-Si (%) 25
14
CUF of fixed tilt system (%) 26
19
Tariff (INR/kWh) 27
6.60
Escalation (%) 3

CAPEX (INR in millions)28 70
O&M costs (INR/Year in 1st year/MW) in millions 29
0.8
O&M escalation (%) 30
5.72
Debt: Equity ratio 70:30
Interest rate (%) 13.00
Table 8-4: Variation in yield and CUF by technology

Tracking technology Annual genera- CUF of power Increase in

tion (MWh/year)31 plant (%)32 yield(%)
Fixed tilt 1.66 19 -
Horizontal single axis 1.92 22 15
Vertical single axis 2.01 23 22
Dual axis 2.27 26 35
Table 8-5: Variation in CAPEX by technology

Tracking technology Increase in CAPEX 33(%) Increase in cost34

(` per Wp)
Fixed tilt - -
Horizontal single axis 11 7
Vertical single axis 18 12
Dual axis 30 20
Table 8-6: Variation of parameters due to axis-trackers

Tracker type Fixed Single Axis Single Axis Dual
tilt (Horizontal) (Vertical) Axis © BRIDGE TO INDIA, 2013
CUF (%) 19 22 23 25
Land Area35 (acres )36 4.5 37 5.0 6.0 7.0
CAPEX (` millions)
38
70 77 82 90
Annual O&M (` millions) 0.8 1.2 1.4 1.6
----------------------
25
Central Electricity Regulatory Commission (CERC), ”Petition No. 242/SM/2012”, October 2012
26
CERC, “Petition No. 243/SM/2012”, October 2012
27
An approximation based on Tamil Nadu’s workable tariff of ` 6.48 @5% escalation and Andhra
Pradesh’s lowest bid of ` 6.58.
28
Based on prices in solar PV industry in India in May 2013
29
IFC, “Utility Scale Solar Power Plants”, February 2012
30
CERC, “Petition No. 243/SM/2012”, October 2012
31
BRIDGE TO INDIA analysis
32
As per the data obtained from industry sources.
33
Average increase in CAPEX calculated from data obtained from industry sources in June 2013
34
Based on the % increase in CAPEX
35
Approximate land area for a 1 MW solar PV power plant using C-Si modules.
36
1 acre = 4,046 m2
36
CERC, ”Petition No. 242/SM/2012”, October 2012
38
Evaluated from assumptions in Table 5.1 and 5.3

8.8 RESULTS FOR
THE FINANCIAL
ANALYSIS
The increase in EIRR is
marginal when using Table 8-7: Variation of generation and EIRR with fixed tilt and
trackers39
horizontal single axis
and dual axis tracking Tracker type Fixed tilt Single Axis Single Axis Dual Axis
(Horizontal) (Vertical)
systems. For vertical
EIRR (%) 14.5 15.0 14.2 14.9
single axis tracking © BRIDGE TO INDIA, 2013
systems, the EIRR
actually reduces for
Indian conditions. 8.9 CONCLUSION As the industry matures and there is
an influx of global EPC companies with
The increase in EIRR is marginal when prior experience in setting up large
using horizontal single axis and dual solar power plants with trackers in
axis tracking systems. For vertical developed markets, the merits and de-
single axis tracking systems, the EIRR merits of axis-tracking technology in
actually reduces for Indian conditions. India will become clearer.
The marginal increase in EIRR does
not justify the additional costs and In the future, the key driver for
risk involved in adopting tracking adoption of tracking technology will
technology at the current cost for be the indigenization of components
tracking in India. and local manufacturing that will
help bring down costs. It is expected
Installing tracking systems for utility that the cost of tracking systems will
scale projects requires a more detailed continue to decrease as there is a
In the future, the technical and financial due-diligence. significant scope for price reduction
Given the stringent deadlines for PV
key driver for projects in most policies, developers
that still exists. However, the viability
of tracking systems will only improve if
adoption of tracking find it convenient to avoid tracking the cost of tracking systems decreases
technology will be systems and opt for fixed tilt systems. as a percentage of the total CAPEX
(refer to the figure below).
the indigenization of
components and local Figure 8-4: Variation in expected Equity IRR for reduction in the
cost of axis tracking (as a % of the CAPEX)
manufacturing that will
15.8
help bring down costs. Base case: Fixed tilt
15.6 Case 1: If the cost of
15.4 horizontal single axis
tracking is 10% of the
15.2
CAPEX
Equity IRR
15
Case 2: If the cost of
14.8 horizontal single axis
14.6 tracking is 7.5% of the
CAPEX
14.4
14.2 Case 3: If the cost of
horizontal single axis
14 tracking is 6% of the
13.8 CAPEX
Different equity IRRs for different cases
----------------------
39
BRIDGE TO INDIA financial model

Additionally, the NSM and some state of horizontal single axis trackers from
policies also include an upper and ` 7 (€ 0.11/$ 0.14) per Wp to a range
lower limit on the CUF that a solar of ` 4-5 (€ 0.06-0.07/$ 0.08-0.10)per
power plant can have. This means that Wp can result in a 1% gain in EIRR
A more competitive a plant can generate only a quantum compared to an equivalent fixed tilt
price for tracking of power that is within a CUF range, installation.
technology is required based on the capacity allocated. This
Such a decrease in initial cost of
is a deterrent for the developers and
for the tracker market leads to an even lower preference for trackers could change the perception
to pick up and become trackers for their projects. of tracker technologies and improve
adoption. A more competitive price for
relevant in India. Considering that module prices will tracking technology is required for the
remain stable in the medium term (two tracker market to pick up and become
to three years), a decrease in the price relevant in India.

9. OUTLOOK
Figure 9-1: Projected quarterly PV installations in India
700
Quarterly installations (MW)

600
500
A capacity of 1.7 GW
has already been 400

installed in India and 300
close to 1.5 GW of PV 200
is currently under
100
development.
0 Q3-2013 Q4-2013 Q1-2014 Q1-2014
NSM 0 0 0 0
Rajasthan 0 0 0 50
Madhya Pradesh 50 155 25 0
Karnataka 0 40 20 0
Tamil Nadu 0 0 50 250
Andhra Pradesh 0 0 0 80
Punjab 0 0 0 100
Uttar Pradesh 0 0 0 50
Others 30 50 80 100
Total 80 245 175 630
Until now, 80% of India’s solar PV being commissioned. In terms of

projects have been installed in Gujarat installations, this is the slowest in
and Rajasthan. Now, a capacity of 690 the last one year. Two projects of
The primary reason for MW that is to be allocated in Tamil 25 MW each, allocated under the
the growth in the REC Nadu, 350 MW in Andhra Pradesh and Madhya Pradesh solar policy, are
Karnataka is also expected to allocate expected to be commissioned.The
market has been the projects soon. If even 800 MW finally remaining capacity should come from
lack of policy based comes up in these states, it would be a combination of RPO, REC and third-
a substantial shift from the western party sale type of projects.
project opportunities states to the southern states of India.
in the second Until the end of 2012, India’s installed
A capacity of 1.7 GW has already been capacity of REC based projects was
half of 2012. installed in India and close to 1.5 GW just 2.5 MW. In the first two quarters
of PV is currently under development. of 2013, we have then seen a capacity
BRIDGE TO INDIA expects that India’s addition of over 82 MW under the REC
cumulative installed capacity will mechanism. This upward trend is
exceed 2 GW by the end of 2013. There expected to continue as the capacity
is a lot of momentum building up for of accredited projects40 now stands
capacity additions in 2014, which could at over 160 MW. The primary reason
easily exceed 2 GW. This would take for the growth in the REC market
India’s installed solar PV capacity to 4 has been the lack of policy based
GW by the end of 2014. project opportunities in the second
half of 2012, which led developers to
9.1 COMING look at other avenues. Many of these
projects are expected to sell power to
QUARTER third-party consumers under private
The coming quarter (July 2013 PPAs instead of selling it to the power
to September 2013) is expected distribution companies at APPC.
to see around 80 MW of projects
----------------------
40
The permission granted by the state agency in the form of an accreditation certificate that allows
the developers to sell renewable power to the state and be eligible to avail RECs.

Andhra Pradesh information, we expect 40 MW of this
capacity to be commissioned before
Andhra Pradesh is in the process of the deadline and the remaining 20
signing PPAs with developers who have MW capacity to spill over to the next
Only developers with been issued LOIs. It is expected that quarter.
PPAs will be signed for a capacity of
recourse are expected a little under 300 MW. These projects
Madhya Pradesh
to get finance without will be given one year for completion,
but Andhra Pradesh is offering the The deadline for commissioning of
delays in Tamil Nadu. developers an incentive for early the five 25 MW projects allocated in
commissioning. Based on the list of the first phase of the Madhya Pradesh
developers who were issued LOIs, we solar policy was in June 2013. None of
expect a capacity of around 80 MW to the projects have been commissioned
come up in the second quarter of 2014. as of 20th June 2013. Based on industry
information, we expect at least two
Tamil Nadu projects to be commissioned in the
coming quarter and the remaining
Unlike Andhra Pradesh, Tamil Nadu three projects in the quarter after that.
is not offering an incentive for early Apart from that, a 105 MW project
commissioning, but as there was has been allocated to Welspun (in
a requirement for bidding, most addition to one of the 25 MW projects).
developers have already tied up for The deadline for commissioning of
land and arranged for permissions for the 105 MW project is in June 2014.
grid inter-connection. This is expected However, based on an announcement
to reduce the project development by the company, it is expected that this
Maharashtra’s power time. Also, due to a significant delay in project would also be completed in the
allocations, many developers have had fourth quarter of 2013.
distribution company, enough time for planning their projects
Brihan Mumbai before signing the PPA. For this
Other projects
Electric Supply and reason, we expect some developers to
commission their project in the next These projects are typically RPO,
Transport Undertaking 10-11 months. The key hurdle for early REC or parity driven. Apart from the
(BEST), has signed commissioning of these projects will various REC accredited projects that
be access to finance. Only developers are yet to be commissioned, some
an agreement with with recourse are expected to get projects are being set up to meet
Welspun to set up finance without delays. Based on this the RPO of various obligated entities
a 20 MW project to understanding and after seeing the list directly. For example, Maharashtra’s
of LOIs issued, we expect a capacity power distribution company, Brihan
supply solar power of 250 MW to come up in the second Mumbai Electric Supply and Transport
to meet its RPO . quarter of 2014. Undertaking (BEST), has signed an
agreement with Welspun to set up a 20
NSM MW project to supply solar power that
will help meet the RPO for the power
A capacity of 750 MW is expected to be distribution company.
allocated under the NSM this year. As
the process is expected to start in July
2013 with PPAs signed only by October 9.2 LONG-TERM
2013, we do not expect any capacity OUTLOOK
addition in the next four quarters
Initially 4.5 GW of capacity was planned
under the NSM.
for allocation in India in 2013 under
various state and national policies.
Karnataka However, now that half the year has
The deadline for commissioning of passed, the expectation has come
the 60 MW capacity allocated in the down to 2.5 GW. More capacity might
first phase of the Karnataka policy is fall through (refer table).
in October 2013. Based on industry

Table 9-1: Long term outlook of various policy based allocations
in India
Policy Initially Current scenario Expected Reason for the
announced (as of June 2013) capacity expected capacity
capacity al- as of June
location (as 2014
of January
2013)
NSM phase 1,600 MW 750 MW likely to 0 MW The deadline for
two be allocated in the commissioning is
next few months expected to be in
or after the third
quarter of 2014
Tamil Nadu 1,000 MW LOIs issued for 300 MW Some projects are
690 MW expected to be
completed before
the deadline
as they have a
head start before
signing of the PPA
Andhra 1,000 MW LOIs issued for 80 MW Some projects
Pradesh 350 MW, out of are expected to
this, over 200 MW be commissioned
has provisionally before the
agreed to the deadline as
terms there is a fiscal
incentive for
commissioning
before the
deadline
Rajasthan 100 MW A capacity of 75 50 MW These projects
MW has been are expected to
allocated be commissioned
within the
deadline
Uttar 200 MW Financial bids 50 MW Some experienced
Pradesh received for 135 developers
MW. No clarity are expected
on whether LOIs to be able to
will be issued commission the
as, due to an projects a couple
undersubscribed of months before
tender, some of the deadline
the tariffs quoted
are very high
Punjab 500 MW The state came 100 MW Some experienced
out with a tender developers
for 300 MW but are expected

only 250 MW has to be able to
been issued an commission the
LOI projects a couple
of months before
the deadline

Karnataka 40 MW was An allocation for 0 MW The deadline for
expected 130 MW is under commissioning of
as per the process these projects is
policy expected to be in
or after Q3 2014.

A capacity of 60
MW from the first
round of biddings
is expected to be
commissioned
this year

10. ANNEXURE 10.1 GLOSSARY OF TERMS
APPC – Average Pooled Purchase Cost
BEST – Brihan Mumbai Electric Supply and Transport Undertaking
CAPEX – Capital Expenditure
CE – Chief Engineer
CERC – Central Electricity Regulatory Commission
CSP – Concentrated Solar Power
CUF – Capacity Utilization Factor
DCR – Domestic Content Requirement
DISCOM – State Distribution Company
DNI – Direct Normal Irradiation
DGAD – Directorate General of Anti-Dumping Duties
EPC – Engineering, Procurement and Construction
EIRR – Equity Internal Rate of Return
FiT – Feed-in-Tariff
GHI – Global Horizontal Irradiation
HTF – Heat Transfer Fluid
LoI – Letter of Intent
MNRE – Ministry for New and Renewable Energy
MoP – Ministry of Power
NCEF – National Clean Energy Fund
NOC – No Objection Certificate
NSM – Jawaharlal Nehru National Solar Mission
NTPC – National Thermal Power Corporation
NVVN – NTPC Vidyut Vyapar Nigam
O&M – Operation and Maintenance
PV – Photovoltaic
PPA – Power Purchase Agreement
REC – Renewable Energy Certificate
RfP – Request for Proposal

RPO – Renewable Purchase Obligation
RRECL – Rajasthan Renewable Energy Corporation Limited
SECI – Solar Energy Corporation of India
TANGEDCO – Tamil Nadu Generation and Distribution Company
TEDA – Tamil Nadu Energy Development Authority
VGF – Viability Gap Funding
WTO – World Trade Organization

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business proposition for commercial
OWNERS an additional income from
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BRIDGE TO INDIA is a consulting
company with an entrepreneurial
approach based in New Delhi,
Munich and Hamburg. Founded
in 2008, the company focuses on
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the Indian market. BRIDGE TO INDIA
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INDIA

© BRIDGE TO INDIA, 2013 1

This report is owned by BRIDGE TO The information contained in this

© BRIDGE TO INDIA, 2013

8. Key question: Are tracking systems viable in 19

© BRIDGE TO INDIA, 2013

Figure 2-2: Indian solar market prices  02

Figure 5-1: Grid connected solar projects installed in the previous 10

Figure 5-2: Grid connected solar projects installed in the previous 10

Figure 6-1: A weakening Indian rupee against the US dollar  16

Figure 8-1: Solar angles with respect to a PV module installation 20

Figure 8.2: Types of PV module mounting techniques  21

Figure 8-3: Comparison of hourly generation curves with and without 23

Figure 8-4: Variation in expected equity IRR for reduction 26

Figure 9-1: Projected quarterly PV installations in India  28

Table 8-1: Projects in India using tracking technology 19

Table 8-2: Gain in yield for various axis tracking technologies 23

Table 8-3: Assumptions for financial analysis 25

Table 8-4: Variation in yield and CUF by technology 25

Table 8-5: Variation in CAPEX by technology 25

Table 8-6: Variation of parameters due to axis-trackers 25

© BRIDGE TO INDIA, 2013

© BRIDGE TO INDIA, 2013 01

© BRIDGE TO INDIA, 2013

2.2 INDIAN SOLAR MARKET PRICES

All prices are for a reference 10MW project

Source: BRIDGE TO INDIA

© BRIDGE TO INDIA, 2013 02

© BRIDGE TO INDIA, 2013

© BRIDGE TO INDIA, 2013 03

© BRIDGE TO INDIA, 2013 04

© BRIDGE TO INDIA, 2013 05

Uttar Pradesh is at up signing the PPA at this tariff.

Evaluation of financial bids and Zero date + 90 days

© BRIDGE TO INDIA, 2013 06

© BRIDGE TO INDIA, 2013 07

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Size - 50 MW Size - 125 MW Size - 20 MW

Source: BRIDGE TO INDIA

Size - 0.5 MW Size - 23 MW

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Source: BRIDGE TO INDIA

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A capacity of 225 MW A 50 MW Concentrated Solar Rajasthan

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with an average tariff Uttar Pradesh

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are installed with tracking systems.

Table 8-1: Projects in India using tracking technology7

ergy/Sun Edison Gujarat First Solar Single Axis matec

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Fig 8-2: Types of PV module mounting techniques12

Fixed Singly-Axis-Trackers - Dual-Axis-Trackers -

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Figure 2-2: Indian solar market prices 02

Figure 6-1: A weakening Indian rupee against the US dollar 16

Figure 8-1: Solar angles with respect to a PV module installation 20

Figure 8.2: Types of PV module mounting techniques 21

Figure 9-1: Projected quarterly PV installations in India 28