A.

To better predict Schneider Electric India growth - Using End markets

B.

Understanding the Solar Off Grid Business in India

Summer Internship !roposal for

!ost-Graduate !rogramme in "anagement

b#

bha# Tilwankar $$!$%&

Management Development Institute

Gurgaon $'' (($ "a#) '($'

Page | 1

A.

To better predict Schneider Electric India growth - Using End markets

B.

Understanding the Solar Off Grid Business in India

b#

bha# Tilwankar

Under the guidance of

Shri Anshul Gupta Manager, Strategy & Alliances Schneider Electric India

Management Development Institute

Gurgaon $'' (($ "a#) '($'

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Certificate of Approval

The following Summer Internship Report titled "To better predict Schneider Electric India growth Using End markets and Understanding the Solar Off !rid "#siness in India" is hereby approved as a certified study in management carried out and presented in a manner satisfactory to warrant its acceptance as a prerequisite for the award of $ost-!rad#ate %iploma in "#siness &anagement for which it has been submitted. It is understood that by this approval the undersigned do not necessarily endorse or approve any statement made, opinion expressed or conclusion drawn therein but approve th e Summer Internship Report only for the purpose it is submitted.

Summer Internship Report Examination Report

ommittee for evaluation of Summer Internship

!rgani"ational #uide

Signature $ame% &r. 'nshul #upta (esignation% &anager, orporate Strategy 'ddress% Schneider Electric India )vt. *td. +th ,loor, (*, -uilding $o. ./, Tower , (*, yber ity, )hase II, #urgaon 0 .11//1 2aryana, India Tel $o% /.13 4+3/ 3// Email% anshul.gupta5schneider0electric.com

$ame% 'bhay Tilwan6ar Roll $o. ..).73

Page | 3

Acknowledgments
I would like to express my deep gratitude towards my mentor, Mr. Anshul Gupta for his constant encouragement and guidance to effectively meet the Project !jectives within the schedule. I would also like to thank Mr. P I Mathew, Mr. "achin #halla and Mr."unil $iku from the "chneider %lectric team for sharing their precious time and experience with me. I also thank them for giving their feed!ack and insights on my work. I would like to express my special gratitude and thanks to all Industry exper ts and &hannel Partners in the "olar ff ' Grid industry for sharing critical information with me. I would also like to thank the (aculty at M)I Gurgaon for having helped me at various junctures and the *i!rary team for making availa!le resources which were really critical for successful completion of this project. A!hay $ilwankar

Page | 4

Contents
Acknowledgments ......................................................................................................... + &ontents ........................................................................................................................ , %xecutive "ummary .................................................................................................... -. Project !jectives ....................................................................................................... --

*iterature /eview ........................................................................................................ -0

A!out "chneider %lectric.............................................................................................................. 12 %nergy 1 Infrastructure ............................................................................................................ 12 Industry ................................................................................................................................ ...... 12 )ata &entres 1 2etworks ........................................................................................................ 13 #uildings .............................................................................................................................. ...... 13 /esidential............................................................................................................................ ..... 13 "tatistical )ata!ases3................................................................................................................... 14

Project3 $o !etter predict "chneider %lectric India growth ........................................... -4

Macroeconomic Indicators ........................................................................................................... 1 &ompetitor %nvironment .............................................................................................................. 1! "%I Growth (orecast .................................................................................................................... 1!

Project3 5nderstanding the "olar

ff ' Grid #usiness in India .................................... 00

6ey Market )rivers ....................................................................................................................... 22 7awaharlal 2ehru 2ational "olar Mission 8722"M9 .............................................................. 22 /enewa!le Purchase !ligation 8/P 9 ................................................................................. 24 "olar &ities ................................................................................................................................ 2

"tate Policies ............................................................................................................................ 2" "chneider %lectric /enewa!le %nergy 2! ffering and &ompetitor Mapping ..............................

Market /esearch .......................................................................................................................... 32

&onclusions and /esults ............................................................................................. ::

Page | #

&ustomer sentiments ................................................................................................................... 33 &ustomer 2eeds ........................................................................................................................... 3# Market Potential ............................................................................................................................ 3$ )eriving from the Government Policy drivers ......................................................................... 3$ )eriving from the IM" Market /esearch ; Apr 0.-0.............................................................. 3$

/ecommendations and suggestions ........................................................................... :< /eferences .................................................................................................................. := Appendix ..................................................................................................................... +.

Appendix A3 (ield >isit /esidential &ustomer Preliminary Interviews ..................................... 41 Appendix #3 (ield >isit Industrial &ustomer Interviews ............................................................. 42 Appendix &3 (ield >isit &hannel Partner ? "I @uestionnaire .................................................... 42 Appendix )3 (ield >isit &hannel Partner ? "I Interviews ........................................................... 42 Appendix %3 43 nline @uestionnaire for ff ' Grid "olar &ustomer ...........................................

Appendix (3 IM" /esearch Aorld Inverter "ales (orecast $ill 0.-, 8In B9 ............................. 44

Page |

List of Tables
$a!le -3 &apex under implementation .......................................................................................... 1$ $a!le :3 &ompetitor "egment wise @uarter wise /evenues ........................................................ 2% $a!le +3 722"M $argets ................................................................................................................. 23 $a!le ,3 /P rates across "tates .................................................................................................. 24 $a!le 43 *ist of "olar cities .............................................................................................................. 2 $a!le C3 "tate wise Policies for /oof $ops .................................................................................... 2" &a'le " ( &ompetitor Mapping for "%I /% #usiness ....................................................................... 31

Page | $

Table of Figures
(igure -3 &apex ' &MI% .................................................................................................................. 14 (igure 0 3 India "tat .......................................................................................................................... 1# (igure :3 )atamonitor :4. ............................................................................................................... 1# (igure +3 $rend analysis .................................................................................................................. 1! (igure ,3 Growth of "%I vis;D;vis 0 of the &ompetitors ................................................................. 21 )igure ( *antre+ *, ............................... ................................ ................................ ......................... . 2! )igure $ ( *antre+ G& ............................... ................................ ................................ .......................... . 2! )igure " ( *antre+ -harge -.ntr.llers ............................... ................................ ................................ .. 2! (igure = 3 Perceptual map "chneider /% Inverter......................................................................... 31 )igure 1% ( &ustomer 2eeds3 Industrial &ustomer .......................................................................... 3# )igure 11 ( &ustomer 2eeds3 /esidential &ustomer ....................................................................... 3 (igure -0 3 "olar 3$ ff ' Grid Market (orecast till 0.-, ; India .......................................................

(igure -: 3 Market %stimates )erived for the /esidential markets .............................................. 3$ (igure -+ 3 Market %stimates )erived for the &ommercial and Industrial markets .................... 3$ (igure -,3 Market %stimates )erived for the &ommercial and Industrial markets ..................... 3$ (igure -4 3 /esidential . ' - 6w ..................................................................................................... 3$ (igure -C 3 "mall commercial - 6A ' -. 6w................................................................................. 3$ (igure -< 3 Medium commercial -. 6A ' -.. 6A ....................................................................... 3$ (igure -= 3 *arge commercial -..6A ' - MA .............................................................................. 3$

Page | "

List of Abbreviations "%I; "chneider %lectric India #5 ; #usiness unit /P ; /enewa!le Purchase !ligation

G(&( ; Gross fixed capital formation M2/% ; Ministry of /enewa!le %nergy "I ' "ystem Integrator

RE Renewable Energy

Page | !

Executive Summary
A. $he project is to !etter predict the growth of "chneider %lectric India using the macro; economic indicators and the competitor analysis. $he delivera!le included development of a model using the trend analysis of the indices vis'a; vis the growth of the &ompany, validate it using previous Euarters data and also find an index to incorporate the effects due to the &ompetitors actions. $his project involved data collection and analysis with respect to the Indian economy, the &ompany and its competitors. $he scope of the project was reduced post the detailed study as the results showed a good correlation !etween the macro; economic indicators and the other trendsF a suita!le forecast could !e made with the model. As the competition segments were not easily mapped to "chneiderGs !usiness units and the activity level segment wise Euarterly data was not availa!le, the competitor analysis was not used in the model.

#. $he renewa!le energy is a critical future resource which needs to !e tapped and there is tremendous focus and incentive given !y the Indian government for installation of renewa!le energy generation plants especially "olar %nergy. $hese are via Grid connected as well as ff; Grid installations in various spaces like the Industrial 1 commercial, /esidential and Government. $he project involved identification of the need of the off;grid customer, the market potential of the "olar ff ' Grid !usiness in these spaces and giving recommendations to tap this market potential.

Disclaimer )ue to the confidential nature of the report the data points and results in the report have !een modifiedF also names of entities and people have !een changed in the interest of the &ompany. $he results and recommendations !oth !eing confidential in nature have not !een pu!lished in this report.

Page | 1%

Project

bjectives

A. ; ; ; ;

5nderstanding the lines of !usinesses of "chneider %lectric 5nderstanding the trends !etween the Macro;economic indicators and &ompany order !ooking &ompetitor mapping and analysis )eveloping a model to !etter forecast the growth of "%I using %nd ; Markets

#. ; ; ; ; ; ; ;

"tudying the triggers for installations in the "olar market Analysing the impact of these triggers 6ey market driver identification "tudying the various "tate and &entral government policies which are incentiviHing the renewa!le energy usage &onducting a market research to know the reEuirements of the customer )etermining the market potential for "olar ff ' Grid solutions

/ecommending action plans and esta!lishing changes in strategy to tap the market potential

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Literature !evie" About Sc#nei$er Electric

"chneider %lectric 8"chneider9 is a (rance;!ased company that specialiHes in electricity distri!ution, industrial control and automation management. $he company offers integrated energy solutions to !uildings, industry, data centres and networks, energy and industrial and residential markets. "chneider has operations across %urope, 2orth America, Asia Pacific and other continents. It is headEuartered in /ueil Malmaison, (rance. "chneider %lectric in figures3 I00.+ !illion in sales in 0.--:.,...J employees in more than -.. countries. :=K of revenue in new economies "chneider %lectric India is a su!sidiary of this company. $he !usinesses of "chneider %lectric are explained as given !elow3 Energy % Infrastructure Products and services solutions cover3 / / / / / / / / Processes control and supervision Power supply 1 distri!ution %nergy monitoring and control 5tility management 8lighting, ventilation, elevators, intruder alert, etc.9 "mart electrical networks management "ingle site or multi;site production data management &ritical power ffer prepayment systems that !ring electricity to disadvantaged customers

Main customers3 %lectrical utilities, water 1 waste treatment plants, Pu!lic;sector investors, oil 1 gas infrastructure, Marine sector, etc. In$ustry Products and services solutions cover3 / / / / / / / Processes automation Machine control and monitoring Power supply 1 distri!ution %nergy monitoring and control 5tility management 8lighting, ventilation, elevators, intruder alert, etc.9 "ingle site or multi;site production data management &ritical power

Main customers3 %ngineering firms, systems integrators, %Ms, large industrial companies, panel !uilders and electrical eEuipment distri!utors, end users.

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Data &entres % 'et"or(s

Products and services solutions cover3 / / / / / / / / %lectrical distri!ution, %nergy monitoring and control, Architecture design and installation audits. *eading;edge 5P" systems, electrical switchgear, generators, etc. &ooling systems with a uniEue rack;!ased cooling techniEue to avoid overheating nline supervision and analysis $raining and maintenance "ecurity

Main customers3 (rom small companies to glo!al groups, hospitals, administrations, etc. ur customers are where the availa!ility and Euality of the electrical energy is critical )uil$ings Products and services solutions cover3 / / / / / / / Power supply and distri!ution 5tility management 8lighting, air conditioning, elevators, intruder alert, etc.9 )ata exchange 8>oice;)ata;Image and radio technologies9 Multi;site remote management %nergy monitoring and control &ritical power "ecurity

Main customers3 )evelopers, engineering offices, developers, engineering and design firms, systems integrators, contractors, panel !uilders, electrical eEuipment distri!utors, !uilding operators and end users. !esi$ential Products and services solutions cover3 / / / / / Power supply and distri!ution Lome automation 8supervision, energy efficiency, lighting and heating control, etc.9 >oice;)ata;Image networks &ritical power "ecurity

Main customers3 Architects, !uilding owners, developers, !uilding contractors, electricians, electrical eEuipment distri!utors, )IM superstores and end users.

Page | 13

Statistical Databases*
Figure +* &apex , &MIE

Page | 14

Figure - * In$ia Stat

Figure .* Datamonitor ./0

Page | 1#

Project* To better pre$ict Sc#nei$er Electric In$ia gro"t#

Macroeconomic In$icators $he macroeconomic indicators are indicators which if used accurately can closely forecast the economic scenario for a company. $he changes can !e seen to affect certain sectors. A few important macroeconomic indicators are

/ Gross )omestic Product / &onsumer price index / Producers price index / Inflation rate / %mployment rate / 2ational Association of Purchasing management
(or the line of !usiness "chneider operates any amount of change in the Investment of the & J I J G leads to a direct impact in sales. $he Gross (ixed &apital (ormation hence has !een considered as the most important macro;economic parameter in this study. $he amount of fixed investment may !e stated NgrossN 8!efore taking into account depreciation9 or NnetN 8after depreciation9. #y su!tracting disposals of fixed assets from additions to fixed assets in an accounting period, we o!tain a measure of the net 8fixed9 capital formation. $he concept of Ngross fixed capital formationN 8G(&(9 used in official statistics however does not refer to total fixed investment in a country. (irstly G(&( measures only the value of additions to the fixed capital stock less the value of disposals of scrapped fixed assets. "o normally total fixed investment in a year is in fact a larger value than G(&(. N$otal fixed investmentN 8gross9 is not usually a pu!lished statistical measure, since economists are interested primarily in the contri!ution of fixed investment to value added i.e., they are interested in the net additions made to the total fixed capital stock 8additions less withdrawals9. If, hypothetically, the amount of fixed investment and the amount of scrapped fixed assets are eEual in value, then the total fixed investment figure would tell us only that the scrapped fixed assets have !een replaced. If we want to know !y how much the fixed capital stock has increased, we need to know the relationship !etween fixed assets purchased and disposals of fixed assets. "econdly, G(&( does not include land purchases, only investments in land improvement, !ecause land purchased !y one person or company from another does not normally increase the total amount of land there is 8except in cases of land reclamation9. All that happens is that the same land changes owners. If land is sold, it may yield a capital gain for the seller, !ut such profits from land sales are not usually made explicit in official statistics, in part !ecause a standard valuation of what the land was previously worth is often difficult to operationalise, in particular if the land was improved or developed !y the seller. $he value of land can increase or decline due to all kinds of factors, and land valuations may differ from place to place. At !est one could estimate the total value of land sales in an accounting interval. Page | 1

2ow that the concept of G(&( is explained, the data for the last -0 Euarters was extract ed from the &MI% data!ase and noted. $his data was then used to create the indices taking March 0..= values as the !ase. $he Indices were then related to the "chneider %lectric end market ratios to arrive at the #usiness unit &omposite index to get a clear picture of the impact of the &apital formation in a given Industry or sector on the order !ooking for the #usiness 5nit.

Table +* &apex un$er implementation

Industry Aggregates (Source : CMIE (capex under i ple entation!! 0.n12inancial Manu2acturing 3, ",3$ % 3, % ,$$ ##,$%% 4$,2! $ 41,"! $ 3,%",1 % 2$,!4 1 !,21,#3 3 ","$,1 % 34,3$ 3 % 4",12# 4%,%%% 11,133 1#,%%% 1,3",12 % 4%,$2% 1,3%,#1% 1,42,! 1 1,42,41 % ##1 % % 1,%%% 2,"%,"3 2 2,"%,"3 2 1, 4,4! 3 3,1%,#" # 3,1%,#" # 3,%4,!3 % 2,3 , % " 2,3 , % " 1,%",#4 2 1,4 , " # 1,4 , " # !","%% 2, ",311 Page | 1$ Mar"## $un" ## Sep" ## %ec" ## Mar"#&

0.n13etallic 3ineral pr.ducts

4 ,4%%

-e3ent

2,#!,# Metals & 3etal pr.ducts " ,"!1 Machinery 1%,!#,21 Electricity 1%,"",3 1 ,"## Electricity distri'uti.n !4 -.33unicati.n ser4ices

3,2#,4# 1 " ,!!%

2,3!,1"%

$,14,% % $,12,41 4 1, 4

",%#,$4%

Electricity generati.n

",%#,$4%

2,"#%

-.nstructi.n & real estate

2,!3,"%1

5eal estate

2,!3,"%1

6.using c.nstructi.n

-.33ercial c.3ple+es

1,1 ,33 "

#, ##

1,2",% $

4$,""# 2#,4!%

Indices (Mar"'( )#''! 0.n12inancial Manu2acturing 1 2. " 0.n13etallic 3ineral pr.ducts $1".42 -e3ent 1,%%1. " !!.%! Machinery "%.## Electricity "2.!2 Electricity generati.n 4#.2$ Electricity distri'uti.n %.%% -.33unicati.n ser4ices 3%2. " -.nstructi.n & real estate 3%2. " 5eal estate 3"".$1 6.using c.nstructi.n !%.#% -.33ercial c.3ple+es 2 2. 12.$$ 2"!.14 1%".11 1#%.#" 2$!.14 !!.3 !%.44 1"2.!1 2%2.2! 1#4.11 !#.#4 1"2.!1 2%2.2! 1#4.11 !#.#4 1#.$$ 4$.#% %.%% %.%% !. 1 2.31 4".1" %.$$ 1%2.1% ."3 "3.22 13.3 ! .3% 2.$" "1.%3 12.#$ 1,232.% ! 1,24!.1 1 1$%.!" 1##."$ 14%.$# 3$.4% 2$2.32 41.1" 34.! 3#.#"

Metals & 3etal pr.ducts

1,# $

.1

1,4"2.!

4. "

1$1.1$

#4.!"

"%.13

$he ta!le a!ove shows the &AP%O under implementation in the Industries and "ectors given. $he industry aggregates have then !een indexed to the March 0..= value. $he indexed values are then used to develop the %nd market Indicator 8*ike /esidential, &ommercial #uildings, Industry, %nergy Page | 1"

and )ata centres9. $he !usiness unit 8#59 composites have then !een derived using the %nd Market indicators $his part of the exercise had !een done along with the senior team ' "trategy 1 Alliances $eam at "%I. A trend analysis was then done !y plotting the #5 indicators over several Euarters against the rders !ooked. $he plots showed a certain relation in the trends and using this, a fairly accurate forecast could !e made. Figure 1* Tren$ analysis 8&he analysis cann.t 'e pu'lished due t. the -70)I8E0&IA9 nature .2 this rep.rt:

&ompetitor Environment

"chneider electric India 8"%I9 !eing into diverse !usinesses like Industrial automation, )istri!ution systems, "tarters, )rives, 5P", Power monitoring, "witchgear, "&A)A distri!ution monitoring system, #uilding management systems, %nergy management systems, "ensors and /enewa!le %nergies. It faces competition from companies like, A##, "iemens, *1$, )anfoss, /ockwell automation, *e Grand, Loneywell in various segments and !usinesses. SEI 2ro"t# Forecast

$he forecast model and details have not !een pu!lished in the report due to &onfidential nature of the /eport.

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Table -* &ompetitor Segment "ise 3uarter "ise !evenues

(All Figures in Rs. Lakhs) ABB Seg ent Type %ec"## Sep"## $un"## Mar" ## Sep"'( $un"'( Mar"'( To %ec "'( ( %ata not disclosed intentionall y! 1 3"13%.4" 4 42$.1$ 44$1 .1! 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 4$33 ."2 #%1 #." 42#!%.3#

P.;er Syste3s P.;er Pr.ducts Pr.cess Aut.3ati.n 8iscrete Aut.3ati.n 9.; <.ltage Pr.ducts &.tal

$3141.#2 #4 1 ."2 #%$ $. #!#1!.4" 4!$#1. $ 4 "$!.22 42##1. 3 2$"%#.4 2!3$!.!"

24%1!.4" 2!22%. " 23##2.# 44$"1.!! 4%43%.!2 3"43$.$ 1%31.# 1!14. # 14$2

#2$13."4 4343#.#3 4211%."# 1222!3." 13!%!.11 12$4 .23 " 24242%.3 1"!#1".# 1"1""3.! # ! 4 "%!!43 $4 1! !%4%

1##3%%.3 1 "1#!.3 1#%$ "." 3 ! "#$$" $%$ $ #%!## !214 $!!12! #$2!1 #$#"# 43 !$ $$11 $4$ 43 !43$3# $!%%2 2% % 132# 1%$12$4

L*T

124 #3! !$212! Engineerin g and -.nstructi .n Electricaland "42# "4$41 Electr.nics Machinery & Industrial Pr.ducts 7thers &.tal = 9ess Inter Seg3ent 5e4enue: $1!$$ 2 $%4 141##4 $"%3

22211 1!"!" 113$#%% !#$"3$

Sie en In2rastructur e and -ities s (Ex Real Estate)* Energy Industry 6ealthcare &.tal =9ess Inter Seg3ent 5e4enue:

324".4% 1#3 .#4 !$% %.3% $3#23. 2%1!".3 23 1%4.1 243% #.% ! 1 2". 1 4 4%"#2.2" 42 2 %.$ 4

1 1$.!# 14$!3$.! 122$##.4 2 2#%!1. " 2$$"#%.1 2

1$ 1."3

1#%!.!%

1"31."$

134!2#.4 !"23#.$3 143%#4.$ 1 $!"34.#4 !$"%4.!3 $ 1%22!$.% 1%$32.3" 113$!.#" # 1222#.%# 213%%4.3 1!%! %.3 23 "1$.2 4 1

Page | 2%

(igure ,3 Growth of "%I vis;D;vis 0 of the &ompetitors

$he development of the model was not pursued !eyond this point as the Project !jective was met. $he incorporation of a factor to take into account the competitors was not accomplished due to3 -. *ack of activity level data of the revenues, reason !eing several competitors not !eing listed and with no reporting in place. 0. $he mapping of segments at a #usiness 5nit level would not give the desired results.

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Project* 4n$erstan$ing t#e Solar

5ey Mar(et Drivers 6a"a#arlal 'e#ru 'ational Solar Mission 76''SM8

ff , 2ri$ )usiness in In$ia

$he 7awaharlal 2ehru 2ational "olar Mission is a major initiative of the Government of India and "tate Governments to promote ecologically sustaina!le growth while addressing IndiaGs energy security challenge. It is a trigger for major investments in this space !y companies and entrepreneurs !oth. It will also constitute a major contri!ution !y India to the glo!al effort to meet the challenges of climate change. &ost* "olar is currently high on a!solute costs compared to other sources of power such as coal. $he o!jective of the "olar Mission is to create conditions, through rapid scale;up of capacity and technological innovation to drive down costs towards grid parity. $he Mission anticipates achieving grid parity !y 0.00 and parity with coal;!ased thermal power !y 0.:., !ut recogniHes that this cost trajectory will depend upon the scale of glo!al deployment and technology development and transfer. $he cost projections vary ' from 00K for every dou!ling of capacity to a reduction of only 4.K with glo!al deployment increasing -4 times the current level. $he Mission recogniHes that there are a num!er of off;grid solar applications particularly for meeting rural energy needs, which are already cost;effective and provides for their rapid expansion. $he immediate aim of the Mission is to focus on setting up an ena!ling environment for solar technology penetration in the country !oth at a centraliHed and decentraliHed level. $he first phase 8up to 0.-:9 will focus on capturing of the low hanging options in solar thermalF on promoting off;grid systems to serve populations without access to commercial energy and modest capacity addition in grid;!ased systems. In the second phase, after taking into account the experience of the initial years, capacity will !e aggressively ramped up to create conditions for up scaled and competitive solar energy penetration in the country. $o achieve this, the Mission targets are3 $o create an ena!ling policy framework for the deployment of 0.,... MA of solar power !y 0.00. $o ramp up capacity of grid;connected solar power generation to -... MA within three years ' !y 0.-:F an additional :... MA !y 0.-C through the mandatory use of the renewa!le purchase o!ligation !y utilities !acked with a preferential tariff. $his capacity can !e more than dou!led ' reaching -.,...MA installed power !y 0.-C or more, !ased on the enhanced and ena!led international finance and technology transfer. $he am!itious target for 0.00 of 0.,... MA or more, will !e dependent on the PlearningG of the first two phases, which if successful, could lead to conditions of grid;competitive solar power. $he transition could !e appropriately

Page | 22

up scaled, !ased on availa!ility of international finance and technology. $o create favoura!le conditions for solar manufacturing capa!ility, particularly solar thermal for indigenous production and market leadership. $o promote programmes for off grid applications, reaching -... MA !y 0.-C and 0... MA !y 0.00. $o achieve -, million sE. meters solar thermal collector area !y 0.-C and 0. million !y 0.00. $o deploy 0. million solar lighting systems for rural areas !y 0.00. $he aspiration is to ensure large;scale deployment of solar generated power for grid connected as well as distri!uted and decentraliHed off;grid provision of commercial energy services. $he deployment across the application segments is envisaged as follows3 Table .* 6''SM Targets

Page | 23

!ene"able Purc#ase

bligation 7!P 8

5tility connected applications3 constructing the solar grid. $he key driver for promoting solar power would !e through a /enewa!le Purchase !ligation 8/P 9 mandated for power utilities, captive generating plants and the open access consumer with a specific solar component. $his will drive utility scale power generation, whether solar P> or solar thermal. $he "olar Purchase !ligation will !e gradually increased while the tariff fixed for solar power purchase will decline over time. $a!le +3 /P State Laryana $amil 2adu Maharashtra Gujarat 6arnataka Punja! Madhya Pradesh Andhra Pradesh 5ttar Pradesh /ajasthan Assam #ihar &hhattisgarh Limachal Pradesh 7ammu 1 6ashmir Goa and 5$ MiHoram Manipur 7harkhand 6erala Meghalaya 2agaland rissa $ripura 5ttarkhand rates across "tates Man$atory min Solar percentage consumption un$er t#e !P -0++9+..0,K ...,K ..0,K ..,.K ..0,K ...:K ..+.K ..0,K ..,.K ....K ..-.K ..,.K ..0,K ..-.K ..-.K ..:.K ..0,K ..0,K ..,.K ..0,K ..:.K ..0,K ..-.K ..-.K ...0,K

$he off;grid opportunity ; lighting homes of the power; deprived poor3 A key opportunity for solar power lies in decentraliHed and off ;grid applications. In remote and far;flung areas where grid penetration is neither feasi!le nor cost effective, solar energy applications are cost;effective. $hey ensure that people with no access, currently, to light and power, move directly to solar, leap;fogging the fossil fuel trajectory of growth. $he key pro!lem is to find the optimum financial strategy to pay for the high;end initial costs in these applications through appropriate Government support.

Page | 24

&urrently, market !ased and even micro;credit !ased schemes have achieved only limited penetration in this segment. $he Government has promoted the use of decentraliHed applications through financial incentives and promotional schemes. Ahile the "olar Mission has set a target of -... MA !y 0.-C, which may appear small, !ut its reach will add up to !ringing changes in millions of households. $he strategy will !e learn from and innovate on existing schemes to improve effectiveness. $he Mission plans to3 Provide solar lighting systems under the ongoing remote village electrification programme of M2/% to cover a!out -.,... villages and hamlets. $he use of solar lights for lighting purposes would !e promoted in settlements without access to grid electricity and since most of these settlements are remote tri!al settlements, =.K su!sidy is provided. $he su!sidy and the demand so generated would !e leveraged to achieve indigeniHation as well as lowering of prices through the scale effect. (or other villages which are connected to grid, solar lights would !e promoted through market mode !y ena!ling !anks to offer low cost credit. ; "et up stand alone rural solar power plants in special category "tates and remote and difficult areas such as *akshadweep, Andaman 1 2ico!ar Islands, *adakh region of 716. #order areas would also !e included. ; Promotion of other off grid solar applications would also !e encouraged. $his would include hy!rid systems to meet power, heating and cooling energy reEuirements currently !eing met !y use of diesel and other fossil fuels. $hese devices would still reEuire interventions to !ring down costs !ut the key challenge would !e to provide an ena!ling framework and support for entrepreneurs to develop markets. Lence, knowing the availa!ility of the market the o!jective is to find out how !ig the market is and how can "chneider %lectric tap it.

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Solar &ities $he "olar &ity aims at minimum -.K reduction in projected demand of conventional energy at the end of five years, through a com!ination of enhancing supply from renewa!le energy sources in the city and energy efficiency measures. $he !asic aim is to motivate the local Governments for adopting renewa!le energy technologies and energy efficiency measures. In a "olar &ity all types of renewa!le energy !ased projects like solar, wind, !iomass, small hydro, waste to energy etc. may !e installed along with possi!le energy efficiency measures depending on the need and resource availa!ility in the city. M2/% has identified +< such potential solar cities of which :C have got sanctioned and 4 cities have su!mitted their Master plan. Table :* List of Solar cities

Sr;'o;

State

&ities for "#ic# in9principle approval given -. >ijaywadaQ 0. Guwahati, :. 7orhatQ +. ItanagarQ ,. &handigarh Q 4. #ilaspurQ, C. /aipurQ <. /ajkotQ, =. GandhinagarQ , -.."urat --. Panji &ityQ -0. GurgaonQ, -:. (arida!adQ -+. "himla Q, -,. LamirpurQ -4. MysoreQ, -C. Lu!li;)harwadQ -<. $hiruvananthapuram, -=. 6ochi 0.. 2agpurQ, 0-. $haneQ, 00.6alyan; )om!iwaliQ, 0:. Auranga!ad, 0+.

-. 0. :. +. ,. 4. C. <. =. -.. --. -0.

Andhra Pradesh Assam Arunachal Pradesh &handigarh &hhattisgarh Gujarat Goa Laryana Limachal Pradesh 6arnataka 6erala Maharashtra

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2anded, 0,. "hirdi -:. Madhya Pradesh 04. Indore, 0C.GwaliorQ, 0<. #hopal, 0=. /ewa :.. ImphalQ :-. AiHawlQ :0. 6ohimaQ, ::. )imapur :+. #hu!aneswar :,. AmritsarQ, :4. *udhianaQ, :C. "A" 2agar 8Mohali9 :<. Ajmer, :=. 7aipur, +.. 7odhpurQ +-. &oim!atore +0. AgartalaQ +:. )ehradunQ, ++. Laridwar 1 /ishikeshQ, +,. &hamoli;Gopeshwar +4. AgraQ, +C. Morada!adQ +<. Lowrah

-+. -,. -4. -C. -<.

Manipur MiHoram 2agaland rissa Punja!

-=. 0.. 0-. 00.

/ajasthan $amil 2adu $ripura 5ttrakhand

0:. 0+.

5ttar Pradesh Aest #engal Q "anction issued for these &ities

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State Policies Apart from the &entral government initiatives the "tate Governments and the 2odal Agencies for /enewa!le %nergy )evelopment also come out with policies. A summary of state wise policies are given !elow3 Table /* State "ise Policies for !oof Tops State pportunity Policy Driver

Aest #engal Meghalaya Andhra Pradesh

Ligh /ise #uildings #uilding Integrated P> "ystems up to , kAp "P> Power Projects

Mandatory for all Ligh /ises to have "olar Installations M2/% support up to ,.K of the cost, or /s. 0 lakhs per kAp Generation #ased Incentive 8G#I9. $ariff applica!le is /s.-C.=- ps. per 6wh and the tariff is applica!le for a period of 0, years

Gujarat 6arnataka

Gandhinagar /esidential space /oof $op Grid connected solar 6Ap level projects of , 6Ap to -.. 6Ap Power Plants 1 ther systems

Green Incentive for the /oof $op owner Green Incentive via 2et Metering

7harkhand Maharashtra

/s. -,<.,... ? 6Ap of P> array &apacity or ,. K of %x;works cost $ariff for "olar /ooftop P> /s ..,. ?kAh higher than the $ariff specified for "olar P> projects. *evelised $ariff /s. -<.+-. Accelerated depreciation M2/% support up to ,.K of the cost, or /s. 0 lakhs per kAp

"olar /oof $ops for the state

5ttar Pradesh

#uilding Integrated P> "ystems up to , kAp

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Sc#nei$er Electric !ene"able Energy

ffering an$ &ompetitor Mapping

"chneider %lectric currently has the following products in the sta!le after it acEuired Oantrex.

Oantrex OA ; Inverter?charger for renewa!le energy systems and !ackup power applications
+igure , : *antre+ *,

Oantrex G$' Grid tied Inverters? power conversion solution +igure - : *antre+ G&

Oantrex &harge &ontrollers ' MPP$ system and PMA systems )igure " ( *antre+ -harge -.ntr.llers $he current market is active with close to C, players registered with the Ministry of /enewa!le %nergy 8M2/%9. Players such as "un %dison, $ata #P "olar, Moser #aer, "u; 6am and %xide are !ig players in the market. $hese are a few of the esta!lished %P& companies. $he companies provide complete turn;key order execution !eginning from site survey, system designing, procurement, installation, commissioning and annual maintenance. $ypically the $otal project cost is shared as !elow3 ; ; ; ; ; P> modules 3 +. ; ,. K Inverters 3 , ' -. K "tructural and other electrical components 3 -. ; -, K )ata *ogging and /ecording systems 3 0; , K ther Project &osts 3 -. ' 0. K ff ' Grids includes suppliers of a range of components

Lence, the market for the "olar and services.

Ae are here considering the competition !y only the players having same or similar products in the market. $hese competitors can !e categorised into 0 types3 i. %sta!lished players with Glo!al operations like "MA, /efu"ol, Morning "tar, Power; ne, %merson )# Power and )elta

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ii. Indian players with good local reach like PP" , "tat;con, 5niline etc $he market sees a trade;off !etween price and Euality, where local players in general have a lower price, lower Euality and lesser lead time, whereas the international !rands tend to have a higher cost, !etter Euality and longer lead times. "chneider Oantrex products can !e categorised in the &ategory I of the two categorie s a!ove. A few !enefits are as listed !elow 3

*ightweight and easy to install Inverters can !e mounted side !y side with Hero clearance *&) provides instantaneous information ' power level, daily energy and lifetime production, system status, and installer customiHed screens. $hese can !e used for remote monitoring of the Plant and communication. "ealed inverter enclosure can !e Euickly separated from the wiring !ox allowing )&?A& connections to remain intact in the event the inverter needs to !e serviced $en;year standard warranty "eamless networking with Oantrex OA system components Ligh efficiency over operating range %asy;to;install (lexi!le system configuration 5sed as stand;alone or as complete system Oantrex G$ 8Grid $ie9 /ange from :.C 6A ' ,.: 6A Oantrex OA 8 ff ; Grid9 /ange from + k>A ' 4 k>A MPP$ charge controllers and PMA range of &harge controllers

It is a !uyerGs market in the solar Inverter market with the Installer, &onsultants and the %nd ; 5ser, in the order of increasing Importance, determine the installation of a the component.

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$he perceptual map !elow gives a picture of the market "cenario for the "chneider Oantrex Inverters3 (igure = 3 Perceptual map "chneider /% Inverter

Table - : &ompetitor Mapping for SEI !E )usiness

Sr; 'o ;

'ame of t#e &ompetitor

Max; P< po"er projects un$erta(e n 7=p8 > Available

&#annel Type

In$ian Pro$uction ?

Ta(es Turn 5ey Projects ?

=arranty

!emar( s

-R -.

The details of this table are CONFIDENTIAL, hence not disclosed

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Mar(et !esearc#
$he research and survey was divided into : phases3 Preliminary survey Interview !ased "urvey for &hannel ? Partners and "Is nline survey for the /esidential and Industrial customers $he aim of the research was to identify and esta!lish3 Preliminary survey ; $o gain insights into the market drivers and hindrances $he preliminary survey was conducted via interviews of the various fficers of AAA and staff and customers at the ### and the &&&. $he preliminary survey also consisted of meeting + Industrial customers namely O , M, A and S to understand the scope of solar in the Industrial space and the key drivers for the Industry to Install a "olar P> system. &hannel Partners ? "Is ' (ield >isit Interviews3 / Aho are the players in this market / Ahat are the products availa!le with them / $o judge the market sentiments / Possi!ility of the channel partner tie ' up with "chneider %lectric $he Euestionnaire used refer Appendix & 8&onfidential9. -. &hannel partners and "Is over the )elhi ' 2&/ region were interviewed to gain a perspective ? opinion over the "olar ff ' Grid &ustomer ' nline survey3 / / / / $o understand as to what makes a customer go for an investment in a solar Installation Ahat are the major hindrances in going solar Ahere would a prospective !uyer go to find out a!out more the avenues $he need of the customer, primarily from the /esidential and Industrial space

$he nline survey received 00= responses. $he target audience for the survey were the &ustomers of "%I. $his ensured the survey was a Pan India survey and it had the correct mix of the Industrial and /esidential users. $he respondents were from 0- states, with ++ K of the respondents from the Leavy %ngineering and Industries !ack ground. $he responses for the Euestions were taken on a likert scale. $he Euestionnaire was drafted on the !asis of the (ield >isits and the preliminary surveys at the Aditya "olar shop and the /ajiv Gandhi /enewa!le %nergy Park, done !efore framing the survey Euestions.

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&onclusions an$ !esults

Given !elow is the "ummary of /esponses to understand the customer sentiments in the "olar off Grid industry. &ustomer sentiments

Lindrances in going "olar3

&he c.nclusi.ns cann.t 'e shared due t. the -70)I8E0&IA9 nature .2 the rep.rt

/eason for going "olar3

&he c.nclusi.ns cann.t 'e shared due t. the -70)I8E0&IA9 nature .2 the rep.rt

Page | 33

Avenues a customer approaches to go "olar3

&he c.nclusi.ns cann.t 'e shared due t. the -70)I8E0&IA9 nature .2 the rep.rt

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&ustomer 'ee$s
+igure #' : &ustomer 'ee$s* In$ustrial &ustomer

8&he c.nclusi.ns cann.t 'e shared due t. the -70)I8E0&IA9 nature .2 the rep.rt:

Page | 3#

+igure ## : &ustomer 'ee$s* !esi$ential &ustomer

&he c.nclusi.ns cann.t 'e shared due t. the -70)I8E0&IA9 nature .2 the rep.rt

Page | 3

Mar(et Potential

$he market Potential for the solar ff; Grid !usiness was calculated !asis the Government Policy drivers, market environment and through insights gained from the Industry expert interactions. $he market potential was segregated into : major parts /esidential &ommercial and Industrial Government

Deriving from t#e 2overnment Policy $rivers

(igure -0 3 "olar

ff ' Grid Market (orecast till 0.-, ; India

(igure -: 3 Market %stimates )erived for the /esidential markets (igure -+ 3 Market %stimates )erived for the &ommercial and Industrial markets (igure -,3 Market %stimates )erived for the &ommercial and Industrial markets

Deriving from t#e IMS Mar(et !esearc# 9 Apr -0+-

Market estimates for segments3 (igure -4 3 /esidential . ' - 6w (igure -C 3 "mall commercial - 6A ' -. 6w (igure -< 3 Medium commercial -. 6A ' -.. 6A (igure -= 3 *arge commercial -..6A ' - MA $he 2.recast 2igures and the graphs ha4e n.t 'een pu'lished here due t. the -70)I8E0&IA9 nature .2 the rep.rt.

Page | 3$

!ecommen$ations an$ suggestions

/ &he rec.33endati.ns ha4e 'een discussed and c.n4eyed t. the SEI Manage3ent. &he c.ntents .2 this secti.n cann.t 'e shared as it is -70)I8E0&IA9.

Page | 3"

!eferences
1. 2. 3. 4. #. http(>>;;;.schneider1electric.c..in http(>>;;;.indiastat.c.3 http(>>cape+.c3ie.c.3> http(>>;;;.in4est.rguide.c.3>igu1article12""1ec.n.3ic1trends1leading1ec.n.3ic1 indicat.rs1 e+plained.ht3l ?erry @. Shan, 6siu1Ahuern &ang, 5en ,u, )ereyd..n Sa2ai =2%%#:, 8yna3ic M.delling and ).recasting .n Enterprise 5e4enue ;ith 8eri4ed Granularities, 6P912%%#1!% May 12, 2%%#, Intelligent Enterprise &echn.l.gies 9a'.rat.ry, 6P 9a'.rat.ries Pal. Alt. http(>>india.g.4.in>alli3p2r3s>alld.cs>1# #$.pd2 098- 1 http(>>nldc.in>5E-.asp+ Electricity in India B 7ct.'er 2%11 B 8ata 3.nit.r rep.rt 5E -.nnect <.lu3e( < M.nth( 8ecC1% & ?anC11

. $. ". !.

1%. &he ,.rld MarDet 2.r P< In4erters 1 Pre3iu3 Editi.n 1 E1F12 Gpdate 1 Ash Shar3a & -.r3ac Gilligan, April 2%12 11. 5ene;a'le Energy -erti2icate Mechanis3 in India 1 S.A.S..nee, -E7H, Mina+i Garg, 8GM I, and Satya PraDash, Engineer 12. @hang Peid.ng, Jang Janli, Shi Kin, @heng J.ngh.ng ,,ang 9ishenga, 9i *inr.ng, 7pp.rtunities and challenges 2.r rene;a'le energy p.licy in -hina, Science8irect, 5ene;a'le and Sustaina'le Energy 5e4ie;s 13 =2%%!: 43!B44!. 13. ;;;.3nre.g.4.in 14. ;;;.p.;er3in.nic.in. 1#. ;;;.cea.nic.in 1 . &he Indian Electricity Act, 2%%3. 1$. -entral Electricity 5egulat.ry -.33issi.n =&er3s and -.nditi.ns 2.r rec.gniti.n and issuance .2 5ene;a'le Energy -erti2icate 2.r 5ene;a'le Energy Generati.n: 5egulati.ns, 2%1%.

Page | 3!

Appen$ix
Appendix A3 (ield >isit /esidential &ustomer Preliminary Interviews Appendix #3 (ield >isit Industrial &ustomer Interviews 8&he c.ntents .2 this appendi+ cann.t 'e shared as it is -70)I8E0&IA9: Appendix &3 (ield >isit &hannel Partner ? "I @uestionnaire 8&he c.ntents .2 this appendi+ cann.t 'e shared as it is -70)I8E0&IA9: Appendix )3 nline @uestionnaire for solar ff;

Grid customer 8&he c.ntents .2 this appendi+ cann.t 'e shared as it is -70)I8E0&IA9: Appendix %3 IM" /esearch Aorld Inverter "ales (orecast $ill 0.-, 8&he c.ntents .2 this appendi+ cann.t 'e shared as it is -70)I8E0&IA9:

Page | 4%

Appen$ix A* Fiel$ <isit !esi$ential &ustomer Preliminary Intervie"s Insights o!tained during interaction with O, M and S3 !esi$ential* < Projects of the range -kw ' 0kw have !een sanctioned in the last - year. Majority of sales have !een in the "olar *antern category priced at /s.-+4,. &onfiguration3 : watt "P> module, 4 volt +., Ah !attery and luminance ,. lux when measured from a distance of - foot away from the centre point of the !ottom of the lamp in the same plane of horiHontal working for +;, hours per day. $here were also options in the /s.04.. and /s.+,.. price range. $he other popular model is the home lighting system which is a :C watt solar panel, one = watt &(*, one 0. watt -0T )& fan, -0 volt +.Ah tu!ular lead acid !attery, working for 0 ;: hours per day. "ystem cost /s. -.4:.?; "u!sidies availa!le /s.0,..?; 5sers share /s.<-:.?; &ommercial* Although M does not offer any system for commercial !uildings there have !een a few inEuiries. A few corporate like AAA 80 x -.. kA Plants9 and ### 8-.. kA9 have installed the "olar P> plants under the ff;Grid )ecentraliHed "olar Application Programme. $he *ead for the AAA and ### plants were claimed to !e generated here.

Page | 41

Appen$ix )* Fiel$ <isit In$ustrial &ustomer Intervie"s ./y Custo er In0est in Solar AAA L 888 1artner 2 Installe r 3eason for Selectio n 8&he Cost +uture re4uire ent s c.ntent s .2 this append i +

cann.t 'e shared as it is -70)I8E0&IA9:

Appen$ix &* Fiel$ <isit &#annel Partner > SI 3uestionnaire 8&he c.ntents .2 this appendi+ cann.t 'e shared as it is -70)I8E0&IA9:

Appen$ix D* Fiel$ <isit &#annel Partner > SI Intervie"s 8&he c.ntents .2 this appendi+ cann.t 'e shared as it is -70)I8E0&IA9:

Page | 42

Appen$ix E* nline 3uestionnaire for ff , 2ri$ Solar &ustomer 8&he c.ntents .2 this appendi+ cann.t 'e shared c.3pletely as it is -70)I8E0&IA9:

Page | 43

Appen$ix F* IMS !esearc# =orl$ Inverter Sales Forecast Till -0+: 7In @8 8&he c.ntents .2 this appendi+ cann.t 'e shared as it is -70)I8E0&IA9 and 9icensed 2.r use t. Schneider Electric.:

Page | 44