PANCHABUTA

RENEWABLE ENERGY AND CLEANTECH IN INDIA

Outlook on
Indian Renewable
Energy
2013

Page
3 Page
10 Page
22
Wind REC Solar
 TABLE OF CONTENTS

WIND ENERGY........................................................................ 3

Outlook on Indian Wind Sector............................................................... 3

RENEWABLE ENERGY CERTIFICATES .................... 10

Dear Colleagues,

The Indian renewable sector today can be compared Outlook on Indian REC Market..............................................................10
to an animal that is crouching but is about to spring.

Things have not been good for wind in the recent Interview with Vishal Pandya (REConnect Energy) ................... 14
past, but there is good newsgeneration-based
incentive (GBI) is coming back. The fifty paise a
unit and the increase in quantum of GBI to one GUJARAT SOLAR PV PLANTS - ANALYSIS OF
crore is a whiff of fresh air and could be the
turning point that the industry is waiting for. ONE YEAR PERFORMANCE DATA ............................ 15

After all, accelerated depreciation has not been

ruled out. Since there is support within the govern- SOLAR ENERGY.................................................................. 22
ment, there is hope. Competitive bidding seems not
imminent, and the central regulator is likely to show
some leniency if the industry is able to show financial Outlook on Indian Solar Sector ........................................................... 22
injury due to scheduling and forecasting.

The wind industry is in a consolidation mode.

Evaluating the performance of Solar PV plants in India using
Non energy companies are exiting wind busi-
ness and the industry is getting more into the Performance Ratio (PR) .......................................................................... 29
hands of IPPs as we had predicted in our last
years edition.
Interview with Pashupathy Gopalan (SunEdison) ...................... 32
Coming to solar, there is no news of the Phase
II of JNNSM, but one sees some action, in some
states, particularly in Tamil Nadu. If the Courts Interview with Bikesh Ogra (Sterling & Wilson)............................34
uphold the states right to bring in the solar pur-
chase obligation, Tamil Nadu is sure to become
the preferred destination for solar in India. Even
Solar Showcase State - Tamil Nadu...................................................... 38
without waiting for SPO, many industries are
putting up solar plants. It is practically a given
that other states will follow Tamil Nadu.

There is good news on the REC front. The reg-

ulators of Punjab, Delhi and Maharashtra have
told their discoms that they shall meet the RPO
targets this year.

The end of the tunnel is getting closer by the day.

Best Wishes,
Vineeth Vijayaraghavan
Founding Editor
Panchabuta

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 3

OUTLOOK ON INDIAN WIND SECTOR

Indias renewable energy sector is dominated by the wind segment. As of 31st March 2013, India had a renew-
able energy installed capacity of 28 GW out of which 68% or 19.05 GW was contributed by the wind segment.
In the overall energy mix of 223 GW, winds contribution is 8.5%.
The dominance of wind energy in the overall Indian renewable energy mix is obvious and a number of factors
have contributed to the same. Indias foray into wind energy began in the early 1990s and has shown remark-
able growth over the past two decades to become the largest contributor of renewable power generation in the
country.
The tremendous growth witnessed in the wind energy sector is seen in the results achieved so far India cur-
rently ranks 5th in the global list of top countries in terms of installed wind energy generation capacity.

After four years of continuous high

growth, Indias wind sector saw instal-
lations reduce to half from the previous
year. From a peak of about 3 GW annual
capacity additions in 2011-12, the annual
addition was only 1.7 GW in 2012-13. The
major factor that contributed to the drop in
installations was the withdrawal of the Ac-
celerated Depreciation (AD) benefit. The
ambiguity over the Generation Based Incen-
tive (GBI) also added to the challenges.

Not surprisingly, Indias ranking in the

Ernst & Young (E&Y) report for the wind Source: Indian Wind Energy Association, MNRE

sector dropped from three to six in the

Annual Renewable Energy Country At- Gamesa 15.3 230.3 312 89.5 to come from repowering of existing
tractiveness Index released in May 2013. wind farms. This is due to the fact that
Vestas 121.95 175.5 260 N.A
most high wind energy density sites are
M a r k e t s h a re of wind Others 259.7 334.23 259 83.65* already exploited and are occupied (in
most cases) by older, low capacity wind
t u rb i n e m a n ufacturers Total 1563.9 2320.28 3163 1700
turbines. Upgrading these wind farms
The year 2013-14 saw some major changes in with latest design as well as promoting
* Including Vestas
the market share of wind turbine manu- the use of more efficient turbines would
facturers. Suzlon and Gamesa lost sig- result in the wind farms seeing higher
nificant market share in the year 2012- Potential PLF, thereby aiding in the realization of
13 over the previous year. Enercon and higher revenue.
ReGen Powertech improved their market The total potential for wind power in India
shares marginally in 2012-13 compared to was first estimated by the Centre for Wind
previous year. Energy Technology (C-WET) at 45 GW, and Off-shore Wind Segment in India
was recently increased to 48.5 GW. This In addition to the on-shore and repow-
Manu- Installed Capacity in MW year-wise figure was also adopted by the Govern- ering segments, significant potential ex-
facturer
ment as the official estimate. ists in the off-shore wind energy sector.
2009- 2010- 2011- 2012- According to the Ministry of New and
10 11 12 13 At heights of 55 - 65 metres, the
Renewable Energy (MNRE), India is es-
Indian Wind Turbine Manufacturers
Ener- 348.8 504 767 453.6 timated to have 350 GW of off-shore
con
Association (IWTMA) estimates that the
wind energy capacity. Recognizing the
potential for wind development in India
Suzlon 762.65 954.6 1149 414.75 importance of off-shore wind energy,
is around 65 - 70 GW. According to the
MNRE released a draft National Off-
ReGen 55.5 55.5 416 273 Ministry of New and Renewable Energy
shore Wind Policy in May 2013. The
Pow- (MNRE), it is estimated that by 2030, in-
ertech policy draft says that there is a potential
stalled capacity could reach 191 GW.
of 1 GW, each along the Rameshwaram
Inox N.A N.A N.A 264
In the future, a considerable portion of and Kanyakumari coasts in Tamil Nadu.
GE N.A N.A N.A 121.5 The policy aims to facilitate off-shore
the capacity addition is also expected
Wind

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4

wind farms upto 12 nautical miles from

The year-wise capacity additions since 2006-07 (in MW)
the coast. The policy offers several fiscal
incentives in the form of a 10 year tax 2006-07
State 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13
(Cumulative)
holiday, concessional import duties and
certain duty waivers. Tamil Nadu 3,492.7 3,873.4 4,304.5 4,907.0 5,904.4 6,987.6 7,162.18
Gujarat 636.6 1,252.9 1,566.5 1,864.0 2,175.5 2,966.3 3,174.58
In August 2013, it was announced that a
Maharashtra 1,487.7 1,755.9 1,938.9 2,078.0 2,310.8 2,733.3 3,021.85
National Offshore Wind Energy Authori-
ty (NOWA) under the aegis of the MNRE Rajasthan 469.8 538.8 738.4 1,088.0 1,524.8 2,070.7 2,684.65

would be constituted, that will act as the Karnataka 821.1 1,011.4 1,327.4
nodal agency for Off-shore Wind Proj- Madhya Pradesh 57.3 187.7 212.8
ects in the country. NOWA will carry out
Andhra Pradesh 122.5 122.5 122.5
resource assessment and surveys in the
Kerala 2.0 10.5 27.0
Exclusive Economic Zones (EEZ) of the
country and simultaneously enter into Others 1.1 1.1 1.1
contracts with project developers for Total (MW) 7,090.8 8,754.2 10,239.1
development of off-shore wind energy
projects in the territorial waters (12 nm).
% of Total Installed Capacity
NOWA will be the single window agency
and will coordinate with concerned Min-
istries/Departments for necessary clear-
ances. However, NOWA will only act as
a facilitator for getting clearance and ap-
plication for clearance will be dealt in en-
tirety by the concerned Ministry/Depart-
ment.In
Tamil Nadu Gujarat Maharashtra
Installed Capacity Rajasthan Karnataka Madhya Pradesh
Andhra Pradesh Kerala Others
The geographic distribution of wind en-
Source: MNRE as of 31st March 2013
ergy generation capacity is diverse. It can
be argued that the geographic distribu-
tion of wind power in the country fol- constitute 95% of the total capacity in-
lows the available wind energy potential stalled in the country.
in the states. For instance, some of the
regions with the highest wind energy Maharashtra is slowly gaining ground
on Tamil Nadu as most developers ob-
density (Class 1/Class 2) sites can be
serve that the states wind zone-based
found in Tamil Nadu, Gujarat, Rajasthan,
tariff system is conducive for financial-
Maharashtra and Karnataka. Of these
ly viable development of power plants.
states, almost all available high wind
Furthermore, with payment security
energy sites have been utilized in Tamil
sighted as one of the major concerns in
Nadu. The state where there is a signifi-
Tamil Nadu, developers are moving away
cant divide between the available poten-
from the once home of wind energy to
tial and installed capacity is Karnataka.
new pastures. However, Tamil Nadu has
Tamil Nadu is the clear leader when it cleared most of the pending payments,
comes to the total wind capacity in- and is once again gaining the confidence
stalled in India accounting for about of investors.
38% of the overall installed wind ener-
gy capacity as of 31st March 2013. Tamil Capacity additions were down by a sig-
Nadu is followed by Gujarat, Maharash- nificant percentage this financial year in
tra and Rajasthan three states which some of the leading states such as Tamil
have taken significant effort in bolster- Nadu, Gujarat and Maharashtra. But
ing their wind capacity. states such as Rajasthan and Karnataka
have either seen an increase or stable ca-
The top 5 states (Tamil Nadu, Gujarat, pacity additions.
Maharashtra, Rajasthan and Karnataka)
1,473.0 1,730.0 1,933.5 2,135.15
229.0 275.5 376.4 386.00
236.0 200.2 245.5 447.65
28.0 32.8 35.1 35.10
4.0 - 3.2 4.30
11,907 14,154 17,351.6 19,051.46
Policy Framework
Feed-in-Tariff
The wind energy capacity additions has
been driven primarily through a feed-in-
tariff (FiT) mechanism. The FiT for each
state is determined by its respective
State Electricity Regulatory Commission
(SERC). The various SERCs thus far have
adopted a cost-plus approach wherein,
the costs associated with setting up a
wind power plant such as capital ex-
penses and operational expenses are
considered based on discussions with
various stakeholders. The FiT is then cal-
culated based on the levelized cost and
a fixed profit margin determined by the
regulators.
One other important aspect consid-
ered while setting the wind energy tariff is
the capacity utilization factor (CUF). CUF
is a function of the site at which the wind
turbine is located and as such various re-
gions across a state might have different
wind profiles thereby affecting the elec-
tricity generated and hence revenues. This
has led to some states such as Maharash-
tra opting for a tariff scheme which is tied
to the prevailing wind regime across the
various parts of the state leading to what
is known as a zone based tariff. In this
mechanism, the projects in regions with
the lowest wind energy density are offered
a higher tariff while the highest wind en-
ergy density region is given a lower tariff.
This ensures that the returns from all proj-
ects remain the same and the variance due
to wind energy regimes is minimized to a
very large extent.

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6

State Tariff Annual Notes Rajast- Rs. 5.18 No escala- State 2011-12 2012-13 Change
rates per tariff han (without tion for 25 Year
KWh escalation AD) years. Ap- -over-
plicable to Year
Andhra Rs. 4.70 Constant for Order Rs. 4.89
Pradesh 10 years for wind Power
on (with Tamil Nadu 1,083.20 174.58 -84%
the PPAs to Plants
15/11/12 AD) Gujarat 790.80 208.28 -74%
be signed located in
during Jaisalmer,
01-05-09 to Maharash- 422.50 288.55 --32%
Jodhpur tra
31-03-14
& Barmer
Gujarat Rs. 4.15 No escala- Order Rajasthan 545.90 613.95 12%
districts
tion for 25 on Karnataka 203.50 201.65 -1%
Rs. 5.44 No escala-
years of 07/01/13
(w it h ou t tion for 25 Madhya 100.90 9.60 -90%
project life Pradesh
AD) years. Ap-
Karna- Rs. 3.70 No escala- plicable to Andhra 45.30 202.15 346%
taka tion for 10 Rs. 5.13 wind Power Pradesh
years (with Plants
Kerala 2.30 - -100%
AD) located in
Kerala Rs. 4.77 No escala-
districts Others 3.20 1.10 -66%
tion for 20
years of other than Total 3,197.60 1,699.86 -47%
project life Jaisalmer, (MW)
Jodhpur
Madhya Rs. 5.92 No escala- Order (Source: MNRE)
& Barmer
Pradesh tion for 25 on
districts.
years of 26/03/13 Generation Based Incentive
project life Tamil Rs. 3.51 No escala-
Nadu tion for 20 The Generation Based Incentive (GBI)
Maha- Wind No escala- Net scheme was introduced in 2009. The
years of
rashtra Zone I - tion for 13 tariff
project life reason behind the introduction of the
Rs. 4.86 years includ-
ing AD West Rs. 4.87 No escala- 2013 GBI mechanism was to persuade de-
Wind Bengal velopers to install wind capacity which
benefit tion for 10
Zone II -
years would focus on the quantum of electric-
RS. 4.23
ity generated rather than mere installa-
Wind Accelerated Depreciation tion of wind turbines to gain the acceler-
Zone III -
Rs. 3.60 Wind capacity additions reached their ated depreciation benefit i.e. using wind
zenith under the Accelerated Deprecia- as a financial instrument as opposed to
Wind
tion (AD) regime where wind farm de- a power source. Thus, the GBI mecha-
Zone IV -
Rs. 3.24 velopers were offered fiscal incentives nism favoured developers whose wind
(tax benefits). The incentive offered, al- farms were more efficient. Furthermore,
Maha- Wind No escala- Tariff
rashtra Zone I - tion for 13 without lowed for wind farm developers to opt the introduction of the GBI was one
AD for 80% AD on their assets. This led to of the first steps which indicated that
Rs. 5.67 years
benefits
a tremendous growth in wind capacity there would be a shift in market dynam-
Wind
Zone II - additions. The AD benefit can be cred- ics towards a more IPP driven model as
Rs. 4.93 ited for single-handedly driving India to the GBI model favoured IPPs who were
Wind the top of the leader boards in the wind likely to have higher installed capacities
Zone III - sector. thereby producing a larger quantum of
Rs. 4.20 electricity.
Earlier it was suggested that the AD ben-
Wind
efit for setting up wind farms would be The scheme offered a GBI of Rs. 0.50 per
Zone IV -
Rs. 3.78 withdrawn with the introduction of the kWh with a predefined cap of Rs. 62.5
new direct tax code. However, the AD lakhs per MW of the capacity installed.
Orissa Rs. 5.31 No escala-
benefits enjoyed by developers thus far The GBI offered is over and above the
tion for 13
years were withdrawn from the financial year tariff offered by each SERC. This howev-
2012-13 i.e. from 1st April 2012 onwards. er is exclusive of the AD benefit that the
Punjab Rs. 5.96 Wind
(without Zone I wind farm developer would get. Thus,
The impact of the removal of AD is ev- the developer has to make a choice as to
AD)
ident as seen from the drastic drop in whether to go for the AD benefit or avail
Rs. 5.36 installations in every major state, except
(with
the GBI. The GBI incentive scheme was
Rajasthan. available till the end of the financial year
AD)
2011-12, i.e. all projects commissioned

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 7

before 31st March 2012 were eligible for by the existence of the AD mechanism. May'13 CESC 40 Not Com-
GBI provided the developer chose to go With AD being phased out, wind power Avail- mis-
through this route. developers can no longer use installa- able sioned
tion of WTGs as a financial instrument. May'13 Mytrah 100 Not An-
The expiry of the GBI in March 2012 and Furthermore, the most financially viable Avail- nounced
the consequent non-availability of the wind projects are those under the REC able
incentive also contributed to the huge mechanism which favour a higher quan- May'13 Tata 21 Not Com-
slump in the sector in 2012-13. The Gov- tum of energy generation. Such projects Power Avail- mis-
ernment of India, acknowledging the typically have capacity additions of a able sioned
importance of the GBI in the growth of larger scale (on a per project basis). In April'13 Oil 54 Not Com-
the sector, especially after the phasing this scenario, capacity additions are like- India Avail- mis-
out of AD benefits, reinstated the GBI ly to be driven by large scale IPPs as op- limited able sioned
from 1st April 2013 and allocated Rs. 800 posed to several small scale developers. Decem- Nalco 50 .4 274 Com-
Crore towards the same. On 1st August ber'12 mis-
2013, the Union Cabinet of Ministers for- The updates from some of the leading sioned
mally approved the reinstatement of the developers are given below. Novem- Bho- 25.5 180 Com-
scheme. ber'12 ruka mis-
Month Devel- Ca- Esti- Project Power sioned
Corpo-
The incentive of 50 paise per kWh of oper pacity mated Status ration
electricity generated by wind projects (MW) Project
registered under the scheme will contin- Cost The shift towards an IPP driven market
ue. The cap of Rs. 62 lakhs per MW has (Rs.
has also had an impact on the business
Crore
been increased to Rs. 1 Crore per MW, models of the turbine manufacturers.
which can be drawn in not fewer than 4 August ITC Not 300 An- Initially, all turbine manufacturers in
'13 Avail- nounced
years and not more than 10. the country offered to undertake EPC
able
services for wind power plants, in addi-
Renewable Purchase July'13 Reli- 45 300 Com-
tion to providing turbines, as customers
Obligations (RPO) ance mis-
expected the turbine manufacturers to
Power sioned
In the absence of the AD benefits and install the turbines and connect it to the
July'13 GAIL 100 Not An-
GBI, the wind industrys reliance on the grid. This is in stark contrast with what is
Avail- nounced
RPO regulations have increased mani- able witnessed in the Western markets where
fold. However, due to the lack of enforce- the turbine manufacturers merely pro-
July'13 Gre- 250 Not An-
ment of RPO in many states, the demand enco Avail- nounced
vide the turbine and support services.
for wind power and for the Renewable able With the emergence of large scale wind
Energy Certificates (REC) has not tak- IPPs in the country, the turbine manu-
July'13 Jawa- 7 50 An-
en off as planned. The prices at which harlal nounced facturers might no longer need to pro-
RECs have been traded are at the floor Nehru vide the EPC services. IPPs, as opposed
for some time, and the number of un- Port to small scale developers, are building
sold RECs has been increasing. In order Trust in-house expertise for developing as well
(JNPT) as installing wind turbines. Further, IPPs
to provide relief to the renewable energy
power producers whose RECs were in July'13 Surat 6.3 Not An- would prefer to keep all sourcing/instal-
Mu- Avail- nounced lation tasks under their control as this
the process of expiring due to lack of de-
nicipal able
mand, the Central Electricity Regulatory would help them cut costs significantly.
Corpo-
Commission (CERC) extended the valid- ration
In the future, we are likely to see a tran-
ity of the RECs by 12 months meaning (SMC) sition to the Western model wherein the
that the RECs are now valid for a period turbine manufacturers merely provide
June'13 Nalco 47.6 283 Com-
of two years as opposed to the initial pe- mis- the turbines and assist in the mainte-
riod of one year. sioned nance of the power plants. The initial
June'13 SJVNL 47.6 Not An-
phases of such a transition are already
The status of RPO and REC trading are evident as the model is evolving.
Avail- nounced
explained in detail in a separate section. able
Consolidation
May'13 NLC 50 Not An-
Paradigm Shift Avail- nounced The wind sector has already set in mo-
able tion the inevitable consolidation, which
There is no doubt that the market until has resulted in two categories of entities.
a couple of years ago has been driven On one side, there are several business
entities that are exiting the wind busi-

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8
ness. Some of the major companies in
this category include TVS Energy, Ashok
Leyland, DLF, among others. On the oth-
er side, there are IPPs like Green Infra,
BLP and Mytrah Energy that are growing
or looking to grow through green field
projects and through acquisitions of ex-
isting wind assets.
In August 2013, IDFC backed Green In-
fra announced the acquisition of 59.75
MW wind assets of TVS Energy. With
this sale, TVS Energy exited the sector
citing the high capital intensity of the
sector. Similarly, DLF sold off a total of
228.7 MW in 4 different states to differ-
ent buyers. The details are as follows
a. Karnataka 11.2 MW sold to Goyal
MG Gases for Rs. 30 Crore
b. Gujarat 150 MW sold to Bharat
Light and Power for Rs. 325 Crore
c. Tamil Nadu 34.5 MW sold to Tulip
Renewable Power Tech for Rs. 188.7
Crore
d. Rajasthan 33 MW sold to Violet
Green Power for Rs. 52.2 Crore
e. Wind assets of VRL Logistics total-
ling 42.5 MW were purchased by
Amplus Infrastructure
f. Madhya Pradesh - 180 MW sold to
Continuum Wind Energy for an un-
disclosed value
Apart from these, Mytrah Energy and
Ushdev International have announced
intentions to procure operational wind
assets.
Way Forward
Evacuation
The increased capacity addition of
wind in the country is unfortunately
not matched by an equivalent addition
of power evacuation infrastructure. The
lack of grid availability during the peak
wind seasons is a major problem for the
wind power producers, mostly in Tamil
Nadu, where technical challenges result in
grid congestion. According to the leading
IPP Orient Green Power Ltd. (OGPL), the
generation of wind power dropped by 15%
or more for most companies in November
2012 due to the lack of grid availability.
Panchabuta-Renewable Energy & Cleantech in India
The fact that the Southern Grid, of which
Tamil Nadu is part of, is not synchronised
with the rest of the grids compounds the
problem.
According to the Indian Wind Turbine
Manufacturers Association (IWTMA),
during the peak wind season from May
to September 2013, about 500 MW ca-
pacities would be forced to shut down
in the Tirunelveli region of Tamil Nadu.
Green Corridor
The Government of India, acknowledg-
ing the importance of evacua tion infra-
structure for renewables, has announced
the setting up of Green Energy Corridors
for transmission of power. The aim is
to supply 30 GW of renewable power
(solar and wind) to the national grid by
2020. Germany has announced that it
will provide financial assistance of Euro
One Billion for this project and the Joint
Declaration of Intent on Establishment
of Green Energy Corridors was signed by
the Prime Minister of India and Chancel-
lor of Germany in April 2013.
Forecasting Wind Power Gen-
eration
In July 2013, the Central Electricity Reg-
ulatory Commission (CERC) issued an
order to all wind power generators with
a capacity of 10 MW or more to forecast
their generation for the next day, for ev-
ery 15 minute interval. The scheduling
and forecasting order was conceptu-
alised in order to make the grid opera-
tions better and reduce instability that
may arise out of the fluctuation of power
from wind turbines to the grid. If the
actual generation is 30 per cent more or
less over the submitted forecast, penal-
ties would be imposed. The order is ap-
plicable for all wind turbines installed
after May 2010.
Wind power producers like Tata Power
have mentioned that this ruling will se-
verely affect the profitability of the wind
farms. On the other side, CERC has men-
tioned that the order was released after a
two year delay following objections from
the wind power producers.
The Wind Independent Power Produc-
ers Association (WIPPA) filed a petition
with the Delhi High Court over the CERC
scheduling and forecasting order.
Conclusion
The shift from a turbine manufacturer
driven-market to an Independent Power
Producer (IPP) driven-market accelerated
over the past year. The reinstatement of
the GBI mechanism not only provides
relief to the industry, but also stands to
benefit the IPP more than from AD. The
RPO/REC mechanism seems to be holding
the wind industry up at the moment. As to
whether the industry can depend solely on
this mechanism remains to be seen.
It should be noted that in significant con-
trast with the solar industry, the wind
industry is heavily indigenized. It is es-
timated that anywhere between 40%
to 75% of all components used for the
development of a wind turbine/farm are
manufactured within the country. The
success of the wind industry would then
have a direct impact on the economy as
the sector has created many jobs along
with fostering the growth of various
other associated businesses. The sector
would continue to do so depending on
the growth of the wind market in India.
The wind industry is now grappling with
some old challenges that are becoming
bigger and some new challenges. The in-
creasing power evacuation problem falls
in the former category and the need for
scheduling and forecasting falls in the
latter. While forecasting is very impor-
tant for the industry, a higher level of
accurate forecasting might take some
more time.
Overall, the wind industry is at cross-
roads. The restoration of the GBI is a
boon but it is likely to take a few years
for the industry to touch the peak capac-
ity installation in 2011-12. The lacklustre
RPO enforcement is also hurting the
growth of the sector. The consolidation
caused by the downturn in the sector
will continue, with many firms exiting
the wind business and some entering
due to attractive valuations.
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10

OUTLOOK ON INDIAN REC MARKET

Financial year 2012-13 (April 2012 - March 2013) was a lacklustre year for the Renewable Purchase Obligation
(RPO) mechanism and for the REC markets. With no enforcement of the RPO in sight by most states, the
demand for RECs was quite limited. On the other hand, the number of projects registered under the REC mech-
anism and the number of RECs issued (supply of RECs) has been increasing at a fast pace, mainly Non-Solar
RECs. For Solar RECs, the demand was more than the supply till April 2013. But, the situation has reversed
from May 2013.
Since the number of RECs were far in excess of the demand, many of the RECs were in danger of expiry. The
Central Electricity Regulatory Commission (CERC) stepped in to help the REC generators and
extended the validity of RECs from one year to two years in February 2013.

low. This price band is valid till March 2017.

Background Orissa 5.80 % 0.20 %

Punjab 3.37 % 0.13 %

Non-Solar Solar REC
Renewable Purchase Rajasthan 7.20 % 1.00 % REC
Obligation Tamil Nadu 8.95 %** 0.05 %** Floor Price 1,500 9,300
As per the Electricity Act of 2003, it is (Rs./REC)
mandatory for Obligated Entities (OEs) 0.90 % 0.10 % Forbear- 3,300 13,400
Tripura
to buy a certain percentage of the to- ance Price
tal energy requirement from renewable Uttara- 5.00 %** 0.05 %** (Rs./REC)
energy sources. The RPO targets are set khand
for each state and it is the responsibility Uttar The table below gives the details of the
5.00 %** 1.00 %**
of the State Electricity Regulatory Com- Pradesh projects accredited and registered under
mission (SERC) to enforce the targets. the REC Mechanism for different renew-
The targets for 2013-14 for each state are West 3.90% 0.10 %
able energy sources.
given below. Bengal

Goa & UTs 2.60 % 0.4 0 % Source Accreditation Registration

States 2013-14 2013-14 RPO
RPO Obligation Capacity Unit Capacity Unit
Obligation (Solar) (MW) (MW)
Manipur 4.75 % 0.25 %
(Non-Solar)
Mizoram 6.75 % 0.25 %
Andhra 4.75 % 0.25 %
Nagaland 7.75 % 0.25 % Wind 2253.18 566 2038.29 534
Pradesh

Assam 5.40 % 0.20 % ** RPO targets are not determined for FY14 and are
assumed to continue FY13 target levels. Urban or 16 2 0 0
Arunachal 5.45 % 0.15 % * 10% + 0.25% (BESCOM, MESCOM, CESC), 7% + Muncipal
Pradesh 0.25% for others. Waste
(Source: REConnect as of July 2013) Solar 3 1 0 0
Bihar 3.50 % 1.00 %
Thermal
Chhattis- 5.75 % 0.50 % Renewable Energy Certificate Solar PV 171.68 83 162.68 78
garh
(REC) Mechanism Small 218 25 197.5 23
Delhi 4.60 % 0.20 %
REC mechanism is a way by which the Hydro
Gujarat 6.00 %** 1.00 %**
obligated entities under RPO can meet Others 1.67 1 1.67 1
Haryana 2.90 % 0.10 % their targets. The Renewable Energy gen-
erators are issued one Renewable Energy Geother- 0 0 0 0
Himachal 10.00 % 0.25 % mal
Pradesh
Certificate (REC) for every 1 MWh of
power generated. The certificates can Biomass 639.9 65 582.85 60
J&K 4.75 % 0.25 % then be sold in the exchanges to the ob-
Bio-fuel 777.87 79 669.3 70
ligated entities.
Jharkhand 3.00 % 1.00 % cogenera-

Karnataka 10.00 % * 0.25 % * The REC trading mechanism was launched tion
in November 2010 and got off to a good Total 4081.29 822 3652.28 766
Kerala 3.65 % 0.25 % start. The RECs were classified into two
categories Solar and Non-Solar RECs, (Source: REC Registry of India, as of 23 August 2013)
rd
Madhya 4.70 % 0.80 %
Pradesh and the trading takes place on the last
The statewise projects accredited under
Wednesday of every month. The trading
Maharash- the REC mechanism as of 23rd August
8.50 % 0.50 % is done in the power exchanges - Indian
tra 2013 are given below.
Energy Exchange (IEX) and Power
Meghalaya 0.60 % 0.4 0 % Exchange India (PXIL). The price band for The trading dynamics of solar and non-
the RECs as set by the CERC is given be- solar RECs are quite different owing to

Panchabuta-Renewable Energy & Cleantech in India www.panchabuta.com

 11

the demand and supply differences and

the price of RECs. Buy Bids vs Sell Bids (Non-Solar RECs)
Statewise Accredited Status (Number of
Units & Capacity) 23-08-2013
S.No. Type/ State Total

Unit Capacity
(MW)

1 Tamil Nadu 210 986.56

2 Maharashtra 336 918.8

3 Uttar Pradesh 53 678.13

4 Gujarat 52 418.6

5 Karnataka 29 234.79
The reason for the low demand can be directly attributed to the lack of RPO
6 Rajasthan 46 224
enforcement by most of the states.
7 Andhra Pradesh 15 130.55
Non-Solar REC Traded Volumes
8 Madhya Pradesh 41 110.4
The number of non-solar RECs traded from April 2012 to July 2013 is given below.
9 Chhattisgarh 9 88.5 The traded volume as a whole has remained fairly constant, despite the increase in
10 Punjab 4 66.78 the number of RECs available for sale. The only exception was March 2013, when the
REC sales touched an all-time peak. This can be attributed to the fact that March is
11 Himachal Pradesh 6 47.5
the end of the financial year and many companies bought RECs to meet with their
12 Odisha 4 33.9
RPO compliance.
13 Bihar 5 26.6
14 Nagaland 1 24
15 Uttarakhand 1 24
16 Kerala 2 23.2
17 Jammu and Kash- 2 17.5
mir (JKSPDCL)
18 Delhi 2 16
19 Haryana 4 11.5
Total 822 4081.31
(Source: REC Registry of India)

Non-Solar REC trading However, this spike in March is an anomaly and the next month, April 2013, saw the
number of RECs sold crashing.
One of the major challenges for non-
solar renewable power generators is the Non-Solar REC Price Realisation
ever increasing gap between demand
Since supply of RECs outstripped their demand significantly, the price of RECs
and supply. Till July 2012, the supply and
demand were fairly balanced, but since
then the number of RECs generated (sup-
ply) has been growing at a rapid pace.
However, the demand has either fallen
or stagnated during the same period.
For example, the difference between sell
bids (supply) and buy bids (demand) in
July 2012 was 306,514. But one year later,
in July 2013, the difference between sell
bids and buy bids increased by about
8.5 times to 2,610,796. The graph below
clearly indicates this trend.

Panchabuta-Renewable Energy & Cleantech in India www.panchabuta.com

 12

touched the floor price and has remained there for the last 12 months. This situation since there was not enough supply of
is unlikely to change in the near future. RECs. But once that situation reversed,
the price of solar RECs started to fall.
After hitting a high (Rs. 13,200/REC)
Solar REC Trading
in March 2013, the price of solar RECs
Unlike non-solar RECs, the supply of solar RECs was less than the demand till April dramatically dropped to the floor price
2013. But from May 2013, the trend appears to have reversed. With more and more (Rs. 9,300/REC) within 3 trading ses-
solar projects coming up under the REC mechanism, the supply of solar RECs is sions by June 2013. For the last three
expected to see a dramatic increase as witnessed in the non-solar REC segment. months (June to August 2013), the price
has remained at the floor price and it is
unlikely to increase any further unless
Demand Vs Supply (Solar RECs)
demand for RECs is stimulated by the
enforcement of RPO at the state-level.

Conclusion
The RECs (non-solar and solar) have
been trading at the floor price over the
last few trading sessions on increasing
supply leading to a huge supply side fa-
tigue. The key challenge remains the lack
of regulatory will to enforce the obliga-
tions. With an ever increasing demand-
If the RPO is not enforced properly, solar REC trading will face a situation similar to supply spread, the market requires short
that faced by non-solar RECs. term and long term interventions to
boost the confidence of participants on
Solar REC Traded Volumes
the supply side. The spot market trad-
The traded volume of solar RECs has followed a path similar to that of non-solar ing of the REC has not provided enough
market liquidity and stakeholders have
recommended that bilateral and multi-
lateral trading be permitted. A critical
reassessment and repricing of solar REC
must be done at the earliest. As regu-
lators enforce compliance and steps are
taken to deepen the market mechanism,
the REC market should witness renewed
interest.

RECs. The number of RECs sold touched an all-time high in March 2013, but dropped
again in the subsequent months.

Solar REC Price Realisation

Solar REC prices stayed close to the upper limit (forbearance price) till May 2013

Panchabuta-Renewable Energy & Cleantech in India www.panchabuta.com

*FY 2012 - 13
14

INDIAN REC MARKET: LOOKING BACK AND

LOOKING FORWARD

Vishal Pandya is co-founder of REConnect Energy Indias largest REC

Trading company. Today, REConnect manages about 46% market
share in Non - Solar RECs and about 80% market share in Solar REC
trading. Further, REConnect has also gained significant market share
in wind/solar forecasting/scheduling as required under RRF mech-
anism and is managing such requirements of wind farms across 5
states in India.

REConnect is as old as the REC market in
India. How has your experience been so far?
We were the first company in the mar-
ket to trade both solar and non-solar
RECs. The changed market dynamics
explosive growth in REC supply and
lack of regulatory will to drive demand
has moved REC sellers from the posi-
tion of privilege to peril. Non-solar RECs
are trading at floor price for 12 consecu-
tive months, and now solar RECs are
also joining the beleaguered league.
Every stakeholder including REConnect
on the supply side of REC has been under
a lot of stress and fatigue. As a stake-
holder, I think we and our clients are just
completing a cycle of REC market evo-
lution.
Do you foresee any reprieve for the
troubled REC Market?
Without any prejudice to our existing
stake in the REC market, we firmly be-
lieve that it would still be premature to
write-off REC market completely as the
market is yet to see its best. In our un-
derstanding, FY 2013-14 would be the
first year where we would see as many
as 5-6 state DISCOMs meeting their RPO
compliance. Delhi, Maharashtra, Pun-
jab, Karnataka and Chhattisgarh state
regulators have already summoned state
DISCOMs and captive/open access con-
sumers to meet their past RPOs includ-
ing current year RPO by this FY. Even
if these five states only are to comply
with their past and current RPO by FY14,
we are looking at a demand of about 38
Lakh non-solar RECs and 4 Lakh solar
RECs. This demand alone will be sub-
stantial enough to give a big relief to the
REC market.
What are the key issues that need to be
addressed to sustain the REC market?
The larger issue is regulatory will, which
is largely driven by political motives.
Apart from this, there are other softer is-
sues which have made a few regulators
jittery about the REC mechanism. For
example, in non-solar, REC represents
three types of asset classes projects
which will need REC revenue for their
absolute viability, projects that need
RECs for increased ROI and projects
needing RECs for windfall gains. Some
rationalist regulators would naturally ob-
ject against creation of windfall gains at
the cost of the consumer. This lack of depth
in the framework has created negative senti-
ments among few regulators.
What are the key changes that stakehold-
ers are expecting from the regulators?
The framework needs significant chang-
es for its own sustainability. For exam-
ple, different treatment of different asset
classes call for differential REC prices
or differential REC multipliers to ensure
every project under REC mechanism
has been provided a level playing field.
The framework shall not create scope
for windfall gains. This is absolutely
essential for increasing stakeholders
confidence. Likewise, the liquidity issue
needs to be sorted out. The current spot
market based trading is not sufficient as
it has failed miserably to attract liquidity.
If only spot market needs to function,
then we must have a multilateral market.
Otherwise, bilateral trades of RECs must
be introduced along with multilateral
trades to ensure better debt structuring
and project financing.
Do you think failure of RECs will affect
Indias growth story in renewables?
Whether RECs remain or not, we as a
country have a huge RE potential to
tap. Today, corporates have become
more cost conscious when it comes to
energy. With the kind of energy tariffs
currently prevailing in the country, in
many consumer types, renewable energy
is cheaper than the price being offered
by distribution companies. Hence, even
without RECs, we have a very long term
future in renewable sector. However, the
key motive behind REC mechanism was
to trigger high growth in capacity addi-
tion which could have driven down the
cost of renewable further. However, the
shortsightedness of containing the im-
pact on tariff for near-term is failing the
long-term objective of securing low cost
future energy supply. Given the current
circumstances, we are not far away from
seeing every Indian corporate adopting
a complete energy portfolio manage-
ment approach like optimally mixing up
energy supply from renewable, energy
exchanges and from distribution compa-
nies to gain better energy cost economics.
We have already got a few clients who have
started working in this direction.

Panchabuta-Renewable Energy & Cleantech in India www.panchabuta.com

 15

Gujarat Solar PV Plants

Analysis of one year performance data

In this white paper, a total of 50 plants totalling 665.64 MW have been ranked based on their annual yield (MWh/MW). All these plants have been operational for at least 1
year. Of these 50 plants, 15 plants are located in Charanka Solar Park and 35 plants outside Charanka. There is an overall ranking of the 50 plants and a separate ranking
each, for plants in Charanka and outside Charanka.
The module, inverters, tilt mechanism and EPC details are also available for several plants. But we would like to point out that knowing the module, inverter and EPC
details is still not enough to benchmark the plants, because there are other variables that influence the performance of the plant. Some of them include quality of balance
of system components (cables, connectors, etc) and build quality.
Gujarat signed Power Purchase Agreements (PPAs) towards a total 968.5 MW of installed capacity towards end of 2010 and early 2011. As of 31st March 2013, 77 projects
totalling 852.31 MW were commissioned and operational.

Charanka Solar Park

The Charanka Solar park is spread over about 2000 Hectares in the wastelands of the Rann of Kutch. The Rann of Kutch is a salt marsh at the edge of Thar Desert, and
it borders Pakistan. The total area available can be used to set up solar plants of a total 500 MW capacity. Of this, 214 MW has been installed by 21 developers. (As of
19th April 2012 Source: GPCL)

Solar Plant performance

The sections below aim to quantify the performance of the solar power plants set up in the state of Gujarat. For the purpose of evaluation, the generation data available
from the Gujarat State Load Dispatch Centre (SLDC) has been used. Ranking of the power plants has been done on the basis of the Plant Load Factor (PLF) or Capacity
Utilisation Factor (CUF). PLF or CUF is calculated as the ratio of actual energy generated (for a given period of time) to the maximum (theoretical) possible generation of
a power system. The formula for CUF is given below.

Capacity Utilisation Factor (CUF) = Energy measured (kWh) / (365*24*installed capacity of the plant).

While the Gujarat Energy Development Agency (GEDA) has shared a list of 77 commissioned projects totalling 852 MW as of March 31st,2013, the SLDC data is available
only for 62 projects totalling 832 MW.

Since some of the plants have been in operation for less than a year, only those 50 plants that have been operational for at least 1 year have been ranked.

Ranking of Plants operational for at least 1 Year (Overall) :

The energy yield of a plant will depend on several factors, including type of modules, inverters and other components, usage of tracking systems, design optimization and build
quality. The ranking given below is based only on the energy yield and does not consider the input parameters like design optimisation, components used or build quality.

Rank Developer Capac- Total Normalized CUF Module Type Module Manu- Inverter Manu- Tilt EPC
ity Generation (MWh per facturer facturer
(MW) (MWh) MW per
Year)
1 Konark Gujarat PV Pvt. Ltd. 5 9361.009 1872.2018 21.3% Crystalline Si Vikram Solar AEG Seasonal Tilt Vikram Solar

2 Unity Power 5 9328.561 1865.7122 21.2% Thin Film Solar Frontier Power One Fixed Tilt Enfinity

3 Mono Steel (india) Ltd 10 18644.292 1864.4292 21.2% Crystalline Si Waaree Power One Seasonal Tilt Waaree

4 WAA Solar Pvt.Ltd 10.22 18461.595 1806.418297 20.6% Thin Film First Solar SMA Not Available Madhav Power

5 Palace Solar Energy Pvt. Ltd. 15 26173.722 1744.9148 19.9% Crystalline Si Candian Solar Power One Seasonal Tilt Etain - immodo / Lourex Group

6 TATA Power Renewable Energy Ltd. 25 43393.098 1735.72392 19.8% Crystalline Si Tata, Canadian Solar ABB Not Available Tata

7 NKG infrastructure Ltd. 10 17310.26 1731.026 19.7% Crystalline Si Solar World Delta (String) PPS Enviro Power

8 Sun Clean Renewable Pvt. Ltd. 6 10341.53 1723.588333 19.6% Thin Film Sharp Power-one Fixed Tilt L&T

9 ZF Steering Gear (India) Pvt. Ltd. 5 8598.95 1719.79 19.6% Thin Film N/A

10 Roha Dyechem Pvt. Ltd 25 42898.65 1715.946 19.5% Thin Film Nex Power Satoon Fixed Tilt Wipro Eco Energy

11 Gppc Pipavav Power Company Ltd. 5 8570.004 1714.0008 19.5% Crystalline Si Suntech Bonfiglioli Fixed Tilt Lanco

12 AZURE (Hariyana) 10.2 17401.797 1706.058529 19.4% Crystalline Si Suntech Self

13 Alex Astral Power Pvt. Ltd 25 42530.899 1701.23596 19.4% Thin Film First Solar SMA Cirus Solar

14 Green Infra Solar Energy Ltd. 10 17012.341 1701.2341 19.4% Thin Film First Solar SMA Fixed Tilt Juwi

15 Solarfield Energy Pvt. Ltd. 20 33948.276 1697.4138 19.3% Thin Film Sharp Sharp Fixed Tilt L&T

16 Welspun Urja Gujarat Pvt. Ltd. 15 25458.575 1697.238333 19.3% Thin Film First Solar SMA Fixed Tilt Conergy (Sun Technics)

17 SEI Solar Power Gujarat Pvt. Ltd. 25 42415.609 1696.62436 19.3% Crystalline Si Chin/Trina Power One Fixed Tilt L&T

18 BACKBONE Enterprises Ltd. 5 8452.757 1690.5514 19.2% Thin Film Nexpower Siemens Not Available Self

19 Millenium Synergy (Gujarat) Pvt. Ltd. 10 16870.807 1687.0807 19.2% Crystalline Si Trina SMA Single Axis L&T

20 ACME Solar Technology 15 25180.906 1678.727067 19.1% Thin Film First Solar ABB Fixed Tilt M+W

21 ESP Urja Pvt. Ltd. 5 8345.851 1669.1702 19.0% Thin Film Sharp SMA

22 PLG Photovoltic Ltd. 20 33140.469 1657.02345 18.9% Crystalline Si PLG / Kyocera Power One Fixed Tilt Zamil Group

23 ICML 9 14802.466 1644.718444 18.7% Crystalline Si LDK IDS

24 GMR Gujarat Solar Power Pvt. Ltd. 25 40983.17 1639.35268 18.7% C-Si Canadian Solar SMA Fixed Tilt Indu Project (Cirus)

25 GHI Energy Pvt. Ltd. 10 16336.161 1633.6161 18.6% Crystalline Si Suntech

26 Emami Cement Ltd 10 16310.494 1631.0494 18.6% C-Si TATA BP ABB Fixed Tilt Tata BP
16

27 Moser Baer Energy & Development Ltd. 15 24456.697 1630.446467 18.6% Thin Film First Solar, SMA Not Available Moser Baer
Moserbaer, Oupont

28 Precious Energy Services Pvt. Ltd. 15.2 24719.672 1626.294211 18.5% Thin Film First Solar, SMA Not Available Moser Baer
Moserbaer, Oupont

29 Azure Power (Gujarat) Pvt. Ltd. 5 8078.944 1615.7888 18.4% Thin Film First Solar SMA/Poweron Not Available

30 AEL(Solar) - Adani 40 64331.765 1608.294125 18.3% Thin Film Sunwell / Sunner Well SMA Fixed Tilt Aries Waaree

31 Solitaire Energies Pvt. Ltd. 15 24100.389 1606.6926 18.3% Thin Film First Solar, Moserbaer N/A Not Available Moser Baer

32 Sand Land Real Estate Pvt. Ltd. 25 40061.177 1602.44708 18.2% Thin Film First Solar SMA Fixed Tilt Moser Baer

33 GPCL 5 7947.638 1589.5276 18.1% c-Si C-Sun

34 GMDC 5 7930.4 1586.08 18.1% Crystalline Si Tata BP Power One Fixed Tilt Tata BP

35 Surana Telecom & Power Ltd. 5 7914.732 1582.9464 18.0% c-Si Surana AEG Fixed Tilt Self

36 LANCO (BHRD) 5 7821.247 1564.2494 17.8% Crystalline Si N/A Hellos Systems Lanco

37 EMCO Ltd 5 7787.114 1557.4228 17.7% Crystalline Si Trina Ingeteam

38 Visual Percept Solar Projects Pvt. Ltd. 25 38359.028 1534.36112 17.5% Crystalline Si Hanwha Solarone Power One Fixed Tilt Sterling and Wilson

39 GIPCL 5 7626.817 1525.3634 17.4% Crystalline Si Titan ABB

40 Louroux Bio Energies Ltd. 25 37676.577 1507.06308 17.2% Thin Film Tianwel and Sungen Siemens Fixed Tilt Inspira Martifer

41 Hiraco Renewable Energy Pvt. Ltd. 20 29567.821 1478.39105 16.8% Crystalline Si Hanwha Solarone SMA Fixed Tilt Moser Baer

42 Ganeshvani Merchandise Pvt. Ltd. 5 7241.912 1448.3824 16.5% Crystalline Si Trina Bonfiglioli Fixed Tilt Insolare Energy Pvt. Ltd.

43 CBC Solar Technologies Pvt. Ltd 10 14225.313 1422.5313 16.2% Crystalline Si Trina Bonfiglioli Not Available Moser Baer

44 AES Solar Energy Gujarat Pvt. Ltd 14.92 20896.17 1400.544035 15.9% Thin Film First Solar Power Oner Fixed Tilt Enfinity

45 Jaihind Project 5 6878.733 1375.7466 15.7% Crystalline Si Nantong Helofax Fixed Tilt Self

46 Lanco infratech ltd. 15.01 20432.741 1361.275217 15.5% Crystalline Si C-Sun Bonfiglioli Fixed Tilt Self

47 Solar Semiconductor Power Company 20 26205.372 1310.2686 14.9% Thin Film Sunwell Santerno Fixed Tilt Self

48 Lanco (Chandiyana) 15.01 19096.039 1272.221119 14.5% Crystalline Si and Trina/Dupont/CSUN Bonfiglioli, Elt ek, Fixed Tilt Self
Thin Film REFUSol

49 Arvali Infapower ltd. 5 5529.347 1105.8694 12.6% Crystalline Si LDK Eltek Fixed Tilt Moser Baer

50 Gangesh Green Energy Pvt. Ltd. 25.08 26947.408 1074.458054 12.2% Thin Film First Solar SMA Fixed Tilt Not Available

Total 665.64

(Note : Plants operational in the Charanka Solar Park are highlighted in yellow)

From the above list, it can be seen that Konark Gujarat PV Pvt Limited comes first overall, and it narrowly edges its nearest rival, possibly due to its seasonal tilt mecha-
nism. Among plants with fixed tilt mounting structures, Unity Power (Welspun) is the number one, with a CUF of 21.2%.

A word of caution here the ranking above is not an indicator of how good or bad a component or EPC is. The CUF will depend on some more factors like build quality,
Balance of Systems used (cables, structures, etc) and design optimization.

Ranking of Plants operational for at least 1 Year (Charanka Solar Park)

Rank Developer Capacity Total Genera- Normalized CUF Module Module Inverter Tilt EPC
(MW) tion (MWh) (MWh per Type Manufacturer Manufac-
MW per turer
Year)

1 Palace Solar Energy Pvt. Ltd 15 26173.72 1744.9148 19.9% Crystalline Si Candian Solar Power One Seasonal Etain - Immodo / Lourex Group
Tilt

2 NKG Infrastructure Ltd 10 17310.26 1731.026 19.7% Crystalline Si Solarworld Delta PPS Enviro Power
(String)

3 Sun Clean Renewable Pvt. Ltd. 6 10341.53 1723.588333 19.6% Thin Film Sharp Power - One Fixed Tilt L&T

4 ZF Steering Gear (india) Pvt. Ltd. 5 8598.95 1719.79 19.6% Thin Film N/A

5 Roha Dyechem Pvt. Ltd. 25 42898.65 1715.946 19.5% Thin Film Nex Power Satcon Fixed Tilt Wipro Eco Energy

6 GPPC Pipavav Power Company Ltd. 5 8570.004 1714.0008 19.5% Crystalline Si Suntech Bonfiglioli Fixed Tilt Lanco

7 Alex Astral Power Pvt. Lt.d 25 42530.899 1701.23596 19.4% Thin Film First Solar SMA Cirus Solar

8 Solarfield Energy Pvt. Ltd. 20 33948.276 1697.4138 19.3% Thin Film Sharp Sharp Fixed Tilt L&T

9 SEI Solar Power Gujarat Pvt. Ltd. 25 42415.609 1696.62436 19.3% Crystalline Si Chint/Trina Power One Fixed Tilt L&T

10 GMR Gujarat Solar Power Pvt. Ltd. 25 40983.817 1639.35268 18.7% c-Si Canadian SMA Fixed Tilt Indu Project (Cirus)
Solar

11 Emami Cement Ltd 10 16310.494 1631.0494 18.6% c-Si TATA BP ABB Fixed Tilt TATA BP

12 GPCL 5 7947.638 1589.5276 18.1% c-Si C-Sun

13 Surana Telecom & Power Ltd 5 7914.732 1582.9464 18.0% c-Si Surana AEG Fixed Tilt Self

14 AES Solar Energy Gujarat Pvt. Ltd. 14.92 20896.117 1400.544035 15.9% Thin Slim First Solar Power One Fixed Tilt Enfinity

15 Lanco Infratech Ltd. 15.01 20432. 1448.3824 16.5% Crystalline Si C-Sun Bonfiglioli Fixed Tilt Self

Total 210.93
 17

In case of Charanka, Palace Solar has the highest CUF, very closely followed by NKG Infrastructure and Sun Clean Renewables.

Ranking of Plants operational for at least 1 Year (Outside Charanka Solar Park)

Rank Developer Capacity Total Genera- Normalized (MWh per CUF Module Type Module Manu- Inverter Tilt EPC
(MW) tion (MWh) MW per Year) facturer Manufac-
turer

1 Konark Gujarat PV Pvt. Ltd. 5 9361.009 1872.2018 21.3% Crystalline Si Vikram Solar AEG Seasonal Tilt Vikram Solar

2 Unity Power 5 9328.561 1865.7122 21.2% Thin Film Solar Frontier Power One Fixed Tilt Enfinity

3 Mono Steel (india) Ltd. 10 18644.292 1864.4292 21.2% Crystalline Si Waaree Power One Seasonal Tilt Waaree

4 WAA Solar Pvt. Ltd. 10.22 18461.595 1806.418297 20.6% Thin Film First Solar SMA Not Available Madhav Power

5 TATA Power Renewable Energy Ltd. 25 43393.098 1735.72392 19.8% Crystalline Si Tata, Canadian Solar ABB Not Avaliable Tata

6 Azure (Hariyana) 10.2 17401.797 1706.058529 19.4% Crystalline Si Suntech Self

7 Green Infra Solar Energy Ltd. 10 17012.341 1701.2341 19.4% Thin Film First Solar SMA Fixed Tilt Juwi

8 Welspun Urja Gujarat Pvt. Ltd. 15 25458.575 1697.238333 19.3% Thin Film First Solar SMA Fixed Tilt Conergy (Sun
Technics)

9 BACKBONE Enterprises Ltd. 5 8452.757 1690.5514 19.2% Thin Film Nex Power Siemens Not Available Self

10 Millenium Synergy (Gujarat) pvt.Ltd. 10 16870.807 1687.0807 19.2% Crystalline Si Trina SMA Single Axis L&T

11 ACME Solar Technology 15 25180.906 1678.727067 19.1% Thin Film First Solar ABB Fixed Tilt M+W

12 ESP Urja Pvt. Ltd. 5 8345.851 1669.1702 19.0% Thin Film Sharp SMA

13 PLG Photovoltic Ltd. 20 33140.469 1657.02345 18.9% Crystalline Si PLG / Kyocera Power One Fixed Tilt Zamil Group

14 ICML 9 14802.466 1644.718444 18.7% Crystalline Si LDK IDS

15 GHI Energy Pvt. Ltd. 10 16336.161 1633.6161 18.6% Crystalline Si Suntech

16 Moser Baer Energy & Development Ltd 15 24456.697 1630.446467 18.6% Thin Film First Solar, Mose- SMA Not Available Moser Bear
baer, Dupont

17 Precious Energy Services Pvt. Ltd. 15.2 24719.672 1626.294211 18.5% Thin Film First Solar, Mose- SMA Not Available Moser Bear
baer, Dupont

18 Azure Power (Gujarat) Pvt. Ltd. 5 8078.944 1615.7888 18.4% Thin Film First Solar SMA/PowerOn Not Available

19 AEL (Solar) - Adani 40 64331.765 1608.294125 18.3% Thin Film Sunwell/ Sunner Wel SMA Fixed Tilt Aries Waaree

20 Solitarire Energy Pvt. Ltd. 15 24100.389 1606.6926 18.3% Thin Film First Solar, Moserbaer N/A Not Available Moser Baer

21 Sand Land Real Estate Pvt. Ltd. 25 40061.177 1602.44708 18.2% Thin Film First Solar SMA Fixed Tilt Moser Baer

22 GMDC 5 7930.4 1586.08 18.1% Crystalline Si Tata BP Power One Fixed Tilt Tata BP

23 LANCO(BHRD) 5 7821.247 1564.2494 17.8% Crystalline Si N/A Hellios Lanco

System

24 EMCO Ltd. 5 7787.114 1557.4228 17.7% Crystalline Si Trina Ingeteam

25 Visual Percept Solar Projects Pvt. Ltd. 25 38359.028 1534.36112 17.5% Crystalline Si Hanwha Solarone Power One Fixed Tilt Sterling and
Wilson

26 GIPCL 5 7626.817 1525.3634 17.4% Crystalline Si Titan ABB

27 Louroux Bio Energies Ltd. 25 37676.577 1507.06308 17.2% Thin Film Tianwei and Sungen Siemens Fixed Tilt Inspira Martifier

28 Hiraco Renewable Energy Pvt. Ltd. 20 29567.821 1478.39105 16.8% Crystalline Si Hanwha Solarone SMA Fixed Tilt Moser Baer

29 Ganeshvani Merchandise Pvt. Ltd. 5 7241.912 1448.3824 16.5% Crystalline Si Trina Bonfiglioli Fixed Tilt Insolare En-
ergy Pvt. Ltd.

30 CBC Solar Technologies Pvt.Ltd. 10 14225.313 1422.5313 16.2% Crystalline Si Trina Bonfiglioli Not Available Moser Baer

31 Jaihind Project 5 6878.733 1375.7466 15.7% Crystalline Si Nantong Helofax Fixed Tilt Self

32 Solar Semiconductor Power Company 20 26205.372 1310.2686 14.9% Thin Film Sunwell Santerno Fixed Tilt Not Available

33 Lanco (Chandiyana) 15.01 19096.039 1272.22119 14.5% Crystalline Trina/Dupont/CSUN Bonfiglioli, Fixed Tilt Self
Si and Thin Eltek,
REFUSOL
Film

34 Arvali infrapower Ltd. 5 5529.347 1105.8694 12.6% Crystalline Si LDK Eltek Fixed Tilt Moser Baer

35 Gangesh Green Energy pvt. Ltd. 25.08 26947.408 1074.458054 12.2% Thin Film First Solar SMA Fixed Tilt Not Available

Total 454.71

Incidentally, the first 4 top ranking plants in the entire state of Gujarat are outside Charanka Solar Park.

Seasonal Characteristics
The seasonal variation graph represented below has been rendered using data from power plants which have completed one year of operation. All numbers in the graph
have been normalized to the total MWh generated per MW of installed capacity.

The plant with the best performance characteristics, M/s Konark Gujarat Pvt Ltd, had a peak monthly production of 189.95 MWh/MWp in May 2012. Though this is not
a characteristic of all the plants in the sample set, a vast majority had peak production that fell in one of three months March, April or May. The highest individual peak
generation recorded was 216.39 MWh/MWp by M/s Backbone Enterprises Ltd in the month of May 2012 but the annual production of this plant was lower than the top
ranking power plant.
18

The lowest generation is merely presented here to provide a representation of the lowest perfor-
mance and should not be treated as the general performance of power plants in Gujarat. It can
be clearly seen that the average performance closely follows the generation characteristic of the
best performing power plant in the sample set. The average annual performance is estimated to
be 1581.78 MWh/MWp.

Seasonal Characteristics Charanka

The seasonal variation for plants in Charanka is presented below.

The performance of the highest rated power plant can be taken as representative of the perfor-
mance of all the power plants in the Charanka Solar Park as the difference between the average
value and the highest generation is minimal. Peak power output from the solar park was produced
in the month of May as opposed to the three month spread seen in the above scenario. Addition-
ally, a secondary peak is seen in the month of October which is slightly lower than the production
numbers in May. The best performing power plant, M/s Palace Solar Energy Pvt. Ltd., had a peak
generation of 172.63 MWh/MWp in the month of March 2013 while the highest recorded genera-
tion for a given month is 179.76 MWh/MWp also generated in the same month by M/s ZF Steering
Gear (India) pvt. ltd.

Interestingly, though the plant with the lowest CUF (M/s Lanco Infratech Ltd) produced signifi-
cantly lower output in the first few months of operation, the yield caught up during the latter part of
the year indicating that the plant was experiencing teething issues. It is likely that when the data for
the next year is compiled, the lowest performance numbers would be more in line with the average
and that the degree of variation between the highest and lowest numbers would be minimal. The
average yield per year is estimated to be about 1643.28 MWh/MWp, which is comparatively higher
than the average yield seen across the state of Gujarat (non-Charanka average).

Crystalline Silicon vs. Thin Film Technologies

To identify the difference between the choice of the module makes, we looked at the performance of power plants within the same region (only plants in the Charanka
Solar Park were chosen) so as to minimize the variations that may be attributed to external factors such as irradiation conditions, grid availability etc. In addition to this,
the Charanka solar park has an almost even distribution between c-Si and TF installed capacity. While analysing the results, it can be seen that the TF modules perform
marginally better than the c-Si modules with an average performance advantage of about 0.4%.

Looking at the seasonal variation characteristics of the plants (refer image below), it is easy to spot the difference. Plants using TF modules have higher generation than
plants using c-Si modules in hotter months (April to July) while c-Si modules have higher generation in colder months (December to February) which can be attributed to
the lower temperature derating coefficient of TF modules compared to c-Si modules (which have a comparatively higher temperature coefficient).

We would however like to emphasise that the data is not sufficient enough to say one technology is better than the other.

String inverter vs. Central inverter

Continuing in the similar vein of the TF vs c-Si discussion, we did a brief analysis of the performance of
string inverters compared to central inverters. It should be noted that the sample set available for string
inverters is minimal and limited to just one in the Charanka solar park.

With this in mind, the average performance of the top central inverter plants was compared to the perfor-
mance of the solitary string inverter plant. The only real observation which can be made from this com-
parison is that the string inverters offer better performance in the winter as opposed to central inverters
which can be attributed to the fact that the solar park using string inverters has more MPPTs and hence
a better MPPT window when compared to plants using central inverters.

Conclusion
Of the 50 plants for which performance data is available for at least one year, the annual Capacity Utilisation Factor (CUF) for 70% of the plants is above 18%. The top 3
plants had CUFs of more than 21%. In case of Charanka Solar Park, most of the plants have an annual CUF of more than 18%.

One very interesting insight that can be drawn from the performance ranking is that the right component selection is a necessary, but not sufficient condition for the optimal
performance of a plant. One inference that could be drawn is that a developer should pay equal attention to the selection of the balance of system components, ensure
design optimisation and select the right EPC contractors who can ensure build quality and high plant uptimes. Another aspect that could have an impact on the plant
CUFs is the Operation and Maintenance (O&M) of the plants. A plant that has a very good performance monitoring system (remote monitoring or local SCADA) and is well
maintained will obviously lead to higher generation.

In terms of PV module technology selection, the difference in plant performance of crystalline Silicon and Thin Film technologies has been found to be very minor. In order
to draw any conclusion, we will have to wait for longer term performance of the plants and also get additional plant information like plant design, BOS components used,
O&M practices, among others. The Central vs String Inverter debate is also inconclusive since we could compare the performance of only 2 plants, each using one of the inverter
topologies (Central or string).

To conclude, the plant performance data made available by the State of Gujarat has been providing some very valuable insights into the PV plant performance which will
help increase the confidence of the investor community on the technical aspects of the solar PV plant. It also helps other states in the formulation and execution of their
policies and regulations.
RESolve Energy Consultants would once again like to acknowledge the work done by
Mr. Jigneshbhai Shah and M/s Movya Consultancy Pvt. Ltd, Ahmedabad, India, which have been used in this report.
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22

OUTLOOK ON INDIAN SOLAR SECTOR

After entering the 1 GW club in 2012, India is all set to join the countries with more than 2 GW capacity by
the end of 2013. As of 31st July 2013, India had a total grid connected capacity of 1,839 MW (Source: MNRE).
While the solar policy of Gujarat was the engine for the growth of the sector to reach the 1 GW stage, the
JNNSM Phase I was instrumental in reaching the 2 GW milestone. The JNNSM Phase II and the solar initia-
tives by various states will drive the future growth of the sector.

Solar Growth Drivers in
India
Even though the 2 GW capacity is min-
iscule in the 100 GW installed capacity
globally, India is considered a natural
market for solar because
i. India has one of the highest irradia-
tion levels in the world
ii. The peak power deficit in the country
- according to the Central Electric-
ity Authority (CEA), the country
is expected to experience energy
shortage of 6.7% and peak short-
age of 2.3% for the year 2013-14
The Solar Resource map which depicts
the GHI data is given below.
Policy and Regulatory
Framework
In India, the growth of the solar sector
is driven mainly by the policies at the
central and the state government level.
In addition to policies, regulations in the
form of Renewable Purchase Obligation
(RPO) also play a key role in the growth
of the sector.
Jawaharlal Nehru National Solar
Mission (JNNSM)
The Ministry of New and Renewable
Energy (MNRE)s flagship programme
is the JNNSM. Since its launch in 2009,
JNNSM has been the key driver of the
growth of the Indian solar industry. The
mission stipulates installation targets of
20 GW of grid-connected and 2 GW of
offgrid solar power by 2022 (both PV and
CSP) to be completed in three phases.

Phase I - (2009-13) 1,000-2,000 MW

Phase II - (2013-17) 4,000-10,000 MW
Phase III - (2017-22) 20,000 MW

Phase I
In the first of its three phases, from 2010
to 2013, the government incentivized
the construction of 1,000 MW of grid-
connected power plants. Both PV
and CSP based solar installations are
given equal precedence with 500 MW of
capacity being allocated for each
technology.

The projects under Phase I fall into three

categories

Projects under migration scheme

Projects allotted under the Rooftop

PV & Small Solar power Generation
Programme (RPSSGP)

Projects allotted through NTPC

Vidyut Vyapar Nigam (NVVN)

For the first batch of projects allotted

through the NVVN which commenced
in late 2010, as many as 333 project
developers had put forward bids worth
1,815 MW for 150 MW of PV projects. As

Panchabuta-Renewable Energy & Cleantech in India www.panchabuta.com

24

the volume of developers interested in CSP Projects 30 The breakup between PV and CSP for
solar projects was much higher than an- through Migra- the states is as follows.
ticipated, the government opted to go for tion scheme
Proposed share of Solar PV & Solar thermal
a competitive reverse bidding process so RPSSGP (PV) 98.05 and Central/State during Phase II
that all developers were given an equal
Total 802.05
chance.
Batch II Technology Ratio Central State
Developers that offered the highest dis- Schemes Schemes
PV Projects 350
count on the initial tariff of Rs. 17.91/kWh through NVVN
Solar PV 70% 40% 60%
would be given preference and allotted
Grand Total 1152.05
projects until the 150 MW of capacity
Solar 30% 40% 60%
(for solar PV) was filled. The competi- Of these allotted projects, a majority of Thermal
tive bidding process resulted in develop- the PV plants have been commissioned. (Source: MNRE)
ers placing highly competitive bids. The But under CSP, only 52.5 MW capacity
rates quoted by the winners were in the has been commissioned. Proposed share of target capacity mix
range Rs. 10.9 to 12.7/kWh for solar PV as a
result of which tariffs fell by around 30% Technology Capacity Central State
to an average of Rs. 11.8/kWh. Phase II Schemes Schemes
(MW)
(MW) (MW)
Subsequently, the guidelines for Phase I The MNRE released the draft guidelines
Batch II of the solar PV allocations were for the JNNSM Phase II. Some of the sa- Solar PV 6300 2520 3780
announced in early August 2011 with lient features are as follows
the bidding process coming to a close on Solar 2700 1080 1620
a. Target for Phase II (2012-17) 10 GW
3rd December 2011. The result of this Thermal
cumulative capacity addition in utility
round of bidding was even more star-
scale and 1 GW in off-grid. Of this, 4 Total 9000 3600 5400
tling than the first. The tariffs quoted
GW will be under the central scheme
in this round of bidding ranged between (Source: MNRE)
and 6 GW under the various state initia-
Rs. 7.49/kWh to Rs. 9.44/kWh. The
tives. The 6 GW under the state initia- b. Financing Implementation of Phase
bidding for Batch II clearly indicat-
tives will be met by the enforcement of II will have to rely upon a combination of
ed a sharp decline in the solar tariffs
Renewable Purchase Obligations (RPO). various schemes like Generation Based
across the countr y. The lowest bid of
Rs. 7.49/ kWh by Solairedirect sent
shockwaves across the indus-
try. Though the industry expect- Timeline for achieving the targets (in MW) under the central scheme
ed a drop in tariff, a fall of this 2012-13 2013-14 2014-15 2015- 16 2016-17 Total
magnitude was not foreseen. The aver-
Rooftop & Small
age tariff quoted fell by about 25% to Solar
Rs.8.88/kWh as developers and EPCs start-
PV 100 100 200
ed coming to grips with the nuances of the
solar PV sector.
Bundling
A total of 1,152 MW were allotted by the
MNRE in the Phase I of JNNSM. The PV 800 800
details are given below.
VGF
Phase I Projects
Allotted (MW)
PV 750 770 1520
Batch I PV Proj- 150
ects through Thermal 1080 1080
NVVN
Batch I CSP 470 Total PV 1650 870 2520
Projects
through NVVN
Total Thermal 1080 1080
PV projects 54
under Migration
Grand Total 3600
scheme

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Incentive (GBI), Viability Gap Funding
(VGF) and Bundling schemes.
i. Bundling The target under
bundling will be finalised based on
deliberations with Ministry of Power
(MoP), but it is unlikely to be signifi-
cant due to the limited availability of
conventional power from unallocated
central quota.
ii. GBI Total target will be 60 MW.
Only states that did not get allot-
ment under the first phase of the
GBI scheme will be eligible for this
scheme. GBI assistance from the
MNRE will be about Rs. 2-3/kWh.
iii. VGF This will be the most preva-
lent mechanism under Phase II. Un-
der this option, bidders would bid for
viability gap funding requirement in
Rs/MW and the bidder with mini-
mum VGF requirement would be se-
lected.
c. Rooftop installations Target of 1 GW
through both grid-connected and off-
grid rooftop systems.
d. Domestic content requirement
Several options are explored, but a final
decision has not been made yet.
f. Off-grid systems - The upper limit for
off-grid systems eligible for subsidy has
been increased to 500 kWp.
Phase II allocation under Viability
Gap Funding (VGF)
With the unallocated electricity quota
under Phase I of JNNSM no longer avail-
able and the fact that NVVN (NTPC) is
no longer the procurer of solar electric-
ity under the JNNSM, MNRE has estab-
lished the Solar Energy Corporation of
India (SECI) for handling the power pro-
curement from the second phase of the
JNNSM.
In this scenario however, SECIs role
would be limited to providing an upfront
subsidy known as Viability Gap Funding
(VGF) which is basically a part payment
made by SECI to the project developer
in order to make the project viable. In
this scenario, the developer opting for
the lowest amount of funding to bridge
Panchabuta-Renewable Energy & Cleantech in India
the gap would be chosen first and so on.
This is a new form of reverse bidding
wherein the developer would no longer
quote the electricity tariff but the quan-
tum of money required to make the proj-
ect viable. In view of this, MNRE has
released the draft guidelines for the first
phase of second batch under JNNSM for
setting up of 750 MW of solar capacity.
Some of the information presented in
the draft document is highlighted below.
Total capacity 750 MW
- Min capacity 10 MW
- Max capacity 50 MW
- All projects to be allocated in
multiples of 10 MW
- Max allocation per bidder or com-
pany 100 MW
Tariff The tariff would be fixed
at R s .5. 45/ kW h for 25 year s or
R s. 4.95/ kW h (with AD benefit)
Upper limit of VGF 30% of project
cost or Rs. 2.5 Crores/MW whichever
is lower
Equity contribution At least
Rs. 1.5 Crores/MW
Timeline for VGF disbursal
- 25% at time of delivery of at least
50% of major equipment (modules,
inverters, mounting structures,
switchgear and transformer) on site
- 50% after full commissioning
- 25% after one year of successful
operation
Domestic content requirement it
has only been stated that 75% per-
centage of the solar capacity would
be reserved for projects with do-
mestic content while the rest of the
projects would be free to procure
components from any country. DCR
would mean that both the solar cells
and modules would have to be man-
ufactured in India.
Financial closure within 180 days
of signing PPA
25
Payment security SECI would set
up a payment security corpus from
the encashment of bank guarantees,
interest earned on this fund, incen-
tives for early payment, the extra
money coming from 10% lower tar-
iff to developers claiming AD and
grants from Government/National
Clean Energy Fund (NCEF). This fund
would cover three months of pay-
ment to the project developer.
State Policy Scenario
As per the JNNSM Phase II guidelines,
60% of the targeted capacity will be
through state policies. Each state has
to meet its own Renewable Purchase
Obligations (RPO) leading them to come
up with solar initiatives.
Two states had been pioneers in announcing
and implementing their respective state
policies - Gujarat and Karnataka. Of these,
the Gujarat state policy is the one that is
both aggressive and ambitious, with Gujarat
looking to add close to 1 GW of solar PV
in the coming years. On the other hand,
even though Karnataka had announced its
policy and also completed the first round
of allocations, projects are yet to be com-
missioned. In addition to these two states,
several other states have announced solar
policies that are either in draft stages or
under advanced stages of implementa-
tion including Madhya Pradesh, Tamil
Nadu, Uttar Pradesh, Punjab and Andhra
Pradesh.
Gujarat State Policy
The state of Gujarat was the first Indi-
an state to launch its own solar policy
in 2009, showing significant foresight
with regards to the promise that solar
holds for the future of energy generation
in the country. The current policy is op-
erative until 2014. The initial target was
to achieve an installed capacity of 500
MW. However, given the interest from
a large number of developers and a like-
lihood that a significant number of the
initial projects might not materialize, the
government allocated projects totalling
968.5 MW capacity.
As of 31st July 2013, Gujarat had a solar
installed capacity of 857 MW and con-
tributed to almost half of all the installa-
tions in the country.
www.panchabuta.com
26
The Gujarat Solar Policy is the only policy
in the country, which has awarded projects
with a fixed FiT, on a first-come first-
serve basis. In view of this and the fact
that there werent too many restrictions
imposed on developers, the amount of
interested parties who were allotted
projects was significant. This laid the
foundation for the meteoric rise of Gujarat
as a hub for solar projects in the country.
The tariff structure has been de-
signed so that higher rates are offered
during the first 12 years of the proj-
ect, with lower rates from the 13th
year onwards. This has a positive in-
fluence on cash flows as debt repay-
ment usually occurs within the first
12 years of operation of the power
plant which helps alleviate some of
the concerns that developers have
with regards to debt repayment con-
sidering the fact that solar was much
more capital intensive compared to
competing technologies.
Other State Policies
Following the success of the prevalent state
policies, numerous other states followed
suit, driven both by the need to bridge the
demand-supply gap in power generation as
well as the mandate to fulfil their Renew-
able Purchase Obligation. A brief summary
of these state policies is provided below.
State Status of solar in state
Gujarat Announced - 968.5 MW,
Commissioned - 857 MW
Maharashtra Announced - 205 MW,
Commissioned - 40 MW
(Setup in Rajasthan),
(In addition, 125 MW com-
missioned by Mahagenco)
Karnataka Commissioned - 8 MW,
Plans for 600 MW; Bids
invited - 80 MW in Round 1
and 130 MW in Round 2
Rajasthan Announced 200 MW, First
round of allocation of
75 MW complete
Odisha Awarded - 25 MW,
Announced - 50 MW
Panchabuta-Renewable Energy & Cleantech in India
Madhya Awarded - 200 MW,
Pradesh 130 MW expected to be
commissioned by
September 2013.
Tamil Nadu Announced - 3000 MW
(by 2015), first round of
bidding for 1000 MW was
done in January 2013. LOIs
issued for 690 MW
Andhra Announced - 1000 MW,
Pradesh Bidding process complete.
LOI issued.
Kerala Announced 500 MW (by
2017)
Bihar Announced 150 MW
Punjab Announced - 1000 MW (by
2022) - Bids invited
300 MW in 2013 and 251 MW
of projects allotted
Uttar Pradesh Announced - 500 MW
target by 2017. 250 MW of
projects allotted
(Source: MNRE and other state policy
documents)
Geographical Distribution
The nations flagship solar policy, the
Jawaharlal Nehru National Solar Mission
(JNNSM), and the policy of the state of
Gujarat which was implemented in two
phases have been instrumental in kick-
starting the sector. About 1 GW of proj-
ects were allotted under each of these
two policies. Interestingly, a majority of
solar projects under the JNNSM came up
in the state of Rajasthan due to the high
irradiation and availability of inexpen-
sive arid land.
Naturally, a vast majority of grid-connect-
ed solar projects have been commis-
sioned in these two states. Of the total
1,839 MW commissioned as of July 2013,
Gujarat has 857 MW (47% of the total) and
Rajasthan has about 608.5 MW (33%).
Together, the two states constitute 80%
of the total capacity in the country.
The capacity addition in the other states
are mainly due to the projects that were
commissioned under the National Solar
Mission as well as the other (now ex-
pired) central policy the Rooftop PV &
Small Solar Generation Program (RPSS-
GP) scheme in addition to the various
projects which opted to migrate and take
advantage of the NSM.
Since no new project allocations in
Gujarat have been announced, a shift
in the market towards other regions
such as Andhra Pradesh, Maharash-
tra, Tamil Nadu and Madhya Pradesh
could be expected.
Steps Forward
RPO Driven Market
All the states have come up with their
own state policies specifically to meet
the Renewable Purchase Obligations.
The state of Tamil Nadu has also pro-
posed a separate Solar Purchase Obliga-
tion (SPO) in addition to the RPO.
The factors that would drive the success
of this segment are
The effective enforcement of the
RPO regulations
The financial health of the state
utilities
While the RPO mechanism is quite at-
tractive on paper, the results on the
ground have been disappointing because
most of the states are reluctant to enforce
the RPO for various reasons.
The Solar REC trading over the past
months have been quite subdued be-
cause there is not enough demand for
the RECs generated. The price of the
RECs traded has also gone down.
(A detailed analysis of the REC trading is
available in a separate section)
Rooftop PV
Another area where solar has been mak-
ing some advancements has been the
Rooftop PV segment. The Solar Energy
Corporation of India (SECI) allotted solar
PV projects in two batches of 5.5 MW
and 11.1 MW spread across 9 cities in the
country. Apart from that, several states
have announced rooftop PV programmes
within their states. Gujarat, the pioneer
in the deployment of solar PV rooftop
programme, allotted 5 MW of grid-con-
nected rooftop projects to Azure Power
www.panchabuta.com

and SunEdison, and has announced its
plans to expand the programme to 5
more cities in the state totalling 25 MW
in capacity.
Kerala announced a policy for the de-
ployment of 10,000 off-grid systems
(each system with a size of 1 kW) across
the state. The project owners will get
capital subsidies from both the MNRE and
the state government. Tamil Nadu state
solar policy targets 350 MW of rooftop
installations by 2015, out of which 50
MW will be on residential rooftops. The
support will be through a Generation
Based Incentive, which is similar to the
FiT. Net metering option is also under con-
sideration.
Karnatakas rooftop PV programme targets
about 1.2 MW of grid-connected roof-
top installations across 5 cities in Kar-
nataka. The project sizes are 0.5 kW and
1 kW, with the government providing
capital subsidy.
Decentralized and Captive Power
Generation
The industrial sector in various parts
of the country has been reeling under
severe power deficits. The opportunity
cost/loss in revenue due to the power
deficit is a source of serious concern for
these industrial units and as such, many
industries are opting to go for captive
power generation which guarantees en-
ergy security.
Many industries have opted to go for
thermal power based captive power gen-
eration. However, the rising cost of the
various fossil fuels primarily diesel and
coal coupled with the fall in capital costs
associated with solar has resulted in so-
lar being extremely cost competitive
with traditional captive power plants. In
addition to this, solar power plants set
up for captive purposes are eligible for
AD benefits (up to 100%). This could
stimulate the solar market much like
how the AD in the wind segment led to
the growth of wind capacity additions,
primarily by captive power producers.
Furthermore, with recent increases in
overall electricity tariffs and specifically
industrial consumer tariffs in various
parts of the country, solar has become
Panchabuta-Renewable Energy & Cleantech in India
27
a competitive source of energy for such is expected to be added. In Punjab, no
consumers, having achieved diesel parity major hurdles for execution of the project
already. are expected. While Andhra Pradesh has
also given LOIs to prospective developers,
In addition to the above mentioned the political uncertainties and also the
factors, some state policies have low tariffs proposed by the administra-
clauses which strongly favour the tion are major challenges for solar in the
decentralized/captive markets. For instance, state.
the recently announced Andhra Pradesh
state policy has a clause which In Karnataka, projects are expected to be
enables offgrid projects coming up in the allocated very soon since the submission
state to be eligible for RECs under the of bids is complete. The projects already
deemed injection clause. This addresses allotted in Madhya Pradesh are expected
another concern which adopters of solar to be commissioned by September 2013.
captive power plants might have which In Maharashtra, the utility company
is What happens to the excess power Mahagenco is planning to add more solar
that is generated? while also providing capacity. States like Bihar and Orissa are
an additional source of revenue which also planning to make allocations soon.
might make the case of setting up a
captive power plant more favourable. In addition to these, the number of
REC based projects will also grow,
In the short term, we believe the above provided there is a clear indication of RPO
three to be the key drivers for solar in enforcement at the state level. Third
India. With utility scale solar additions party sale of power is also expected to
on the wane as a result of capacity pick up.
allocations being few and far in between,
the next big thing with respect to the Looking at the overall scenario, the
solar segment in India is most likely number of projects that will come up
to be the rooftop and decentralized in the short term (till end of December
segment; especially considering the 2013) are quite limited. It is expected
widening gulf between supply and that the momentum will pick up towards
demand. In addition to this, RPO and the end of 2013 all through 2014.
its compliance is likely to be the biggest
contributor to solar capacity addition in
the country.
Conclusion
The MNRE draft guidelines for the Phase
II of the JNNSM makes it quite clear that
60% of the solar capacity additions have
to come from states. There is clear evi-
dence that all the major states have out-
lined their ambitious solar plans.
Going forward, the 750 MW under
the Batch I, Phase II is expected to
increase capacity additions in the
financial year 2014-15. In case of state
policies, Tamil Nadu, which is reported
to have given LOIs for 690 MW, will
be the biggest state in terms of capacity
allocation. However, the realisation
of this capacity is contingent upon the
removal of all legal and regulatory
hurdles currently faced by the state.
Punjab is another state where the capacity
www.panchabuta.com
 29

EVALUATING THE PERFORMANCE OF SOLAR PV

PLANTS IN INDIA USING PERFORMANCE RATIO (PR)

Sebastian Drr is the Founder and CEO of CHROSIS, a company

based in Germany with focus on renewable energy and Co-Founder &
Director of REACH Solar Consultants, an India-based solar consulting
company located at Chennai. He has a decades experience in the Re-
newable Energy domain with focus on solar-PV systems (rooftop and
open area systems). Sebastian is well-versed in international business,
having worked with clients in Germany, India and Switzerland.

Performance ratio
gives insights into how
efficiently the available
solar energy is converted
into electrical energy.
It is possible to compare
the performance of
various plants at
Performance Ratio (PR)
Performance ratio (PR), stated as per-
centage, describes the relationship be-
tween the actual and the theoretical
possible energy output of a solar PV
plant. It shows the proportion of the
energy that is actually available for ex-
port to the grid after deduction of energy
losses (e.g. thermal losses, soiling etc.)
and energy consumption for operation.
The closer the PR value for a PV plant
approaches 100%, the more efficient the
operation of the plant. Since losses will
different context, but CUF is now the de-
facto performance metric as far as solar
plants are concerned.
But the problem with CUF is that it depends
a lot on the uncontrollable factor irradiation
and is not a true metric of performance
of a plant. For example, a poorly built
plant with average quality components
in Rajasthan can still have a better CUF
compared to an excellent plant built using
high quality components in West Bengal,
purely because the irradiation levels in
Rajasthan is much higher than irradiation
in West Bengal.

different locations.
CUF neither takes
into account any envi-
ronmental factors like
variation of irradiance
from one year to
another nor does it take
into account the
de-rating or degradation
of the panels.
always be present, a PR of 100% cannot
be achieved.
Insights from Performance Ratio
Performance ratio gives insights into
how efficiently the available solar energy
is converted into electrical energy. It is
possible to compare the performance of
various plants at different locations on a
normalized independent from climate
conditions level over a long period of
time. Deviations in the PR (e.g. values
below the expected range) indicate a
possible fault or problem in the solar PV
plant. PR can therefore be understood as
an early warning system.
In India, project developers and lenders
typically demand performance assur-
ance from the EPCs in the form of yield
guarantees or Capacity Utilization Fac-
tor (CUF). The term CUF is commonly
used in the thermal power plants in a
However, a better and globally accept-
ed metric Performance Ratio (PR)
accurately estimates the performance of
the plant after removing the externality
of solar irradiation. If PR is used to as-
sess the plants in the earlier example,
the plant in West Bengal will have a
much higher PR compared to the one in
Rajasthan.
Difference between
PR and CUF
PR is a worldwide accepted standard for
measuring the performance of a solar PV
plant.
PR is defined as
Energy Measured (kWh)
PR =
Energy Modelled (kWh)

Panchabuta-Renewable Energy & Cleantech in India www.panchabuta.com

30
Where, Energy Modelled =
Irradiance x Active Area of PV Panels x
= module efficiency
Irradiance (kWh/m2) is measured at the specific
location
Active Area (m2) is the active area of the PV
Panels
CUF is defined as
Energy Measured (kWh)
CUF =
Installed Capacity (kW ) 8760 hours
The CUF neither takes into account any
environmental factors like variation of ir-
radiance from one year to another nor
does it take into account the de-rating
or degradation of the panels. Therefore,
CUF is not a good secondary parameter
to provide insights into a solar PV system.
Some other factors that could be impor-
tant when comparing PR & CUF:
PR will take into account the avail-
ability of the grid; CUF will not
PR will take into account the mini-
mum level of irradiation needed to
generate electrical energy; CUF will
not
PR will take into account irradiation
levels at a given period of time; CUF
will not
PR can be used as a tool to compare dif-
ferent solar PV systems even if they
are located in different regions since all
environmental factors will be taken into
account. Therefore, only the design and
the ability of the system to convert so-
lar energy into electrical energy will be
compared with each other.
Calculation of Performance Ratio
of a Solar PV Plant
Different variables are needed to calcu-
late the performance ratio of a PV plant.
First and foremost, the irradiation data
for the respective PV plant is needed.
This can be achieved with an irradiance
sensor (preferably a Pyranometer). Other
values are the ambient temperature and
the panel temperature, since the ef-
ficiency of the panel would drop with
temperature. There are many reliable
Monitoring and Control solutions avail-
able in the market that enable a conve-
Panchabuta-Renewable Energy & Cleantech in India
nient measurement of all values needed
and also offer the PR that is calculated
automatically.
Values that do not change will also play a
role in the PR calculations; e.g. the active
surface of the panels and the efficiency
of the panels. Both these information
can be found in the datasheets of the
panel manufacturer.
Requirements for calculation
The orientation of the PV modules and
the irradiance sensor must be the identi-
cal to calculate the PR value correctly. It
is a must that the PV modules and the ir-
radiance sensor are exposed to the same
quantities of solar irradiation. It is nearly
impossible to re-calculate the irradi-
ance data measured from a Pyranometer
with horizontal alignment to the plane
of the panels.
Analysis period
The typical analysis period for Perfor-
mance Ratio calculations is one year.
Other time periods are possible.
Manual calculation
It is possible to calculate the perfor-
mance ratio manually. The following
formula- energy generated or measured
divided by the energy modeled is used
Energy Measured (kWh)
PR =
Energy Modelled (kWh)
Where, Energy Modelled =
Irradiance x Active Area of PV Panels x
= module efficiency
Irradiance (kWh/m2) is measured at the specific
location
Active Area (m2) is the active area of the PV-
Panels
Before this irradiation value can be de-
termined, the mean of the irradiation
values measured by the measuring gauge
must be determined. This determined ir-
radiation value per m 2 is then extrapo-
lated to the entire modular surface of the
PV plant (equal to the generating area).
One can obtain the modular efficiency
from the data sheet for the PV plant.
It is important to note that the panel
temperature and therefore, the loss of
efficiency of the panel, are not taken into
account in this example. A detailed de-
scription of all calculations can be found
in the IEC 61724 Photovoltaic system
performance monitoring Guidelines
for measurement, data exchange and
analysis. The IEC 61724 also mentions
the measurement of wind speeds. These
are not needed for calculation, but can
be understood as optional values espe-
cially if the plant is located in an area
with very rough climate conditions.
Example: Calculation of the perfor-
mance ratio for an analysis period of
1 year
The following information is required to
do a manual PR calculation
Analysis period: Define the analy-
sis period in advance. The optimum
analysis period is one year
Generator area of the PV plant:
The active area of the PV system is
known (or can be calculated)
PV panel efficiency: As given in the
datasheets
Measured plant output: As given by
the energy meter
Calculated nominal plant output:
This value will be calculated sepa-
rately
In-plane irradiance data: Value as
given by the irradiance sensor (pref-
erably a Pyranometer)
The following specific conditions and
values are considered in this example
Analysis period: 1 year
Measured average solar irradiation
intensity in 1 year: 120 kWh/m 2
Generator area of the PV plant: 10 m2
Efficiency factor of the PV modules: 15 %
Electrical energy actually exported
from PV plant to grid: 110 kWh
The irradiation values measured on loca-
tion yield an average solar irradiation of
120 kWh/m2 for the entire analysis period.
www.panchabuta.com

This irradiation value is extrapolated to
the modular area of the PV plant as fol-
lows:
Irradiation value in kWh/m 2 x Plant Area
in m 2 = 120 kWh/m 2 x 10 m 2 = 1,200 kWh
In order to subsequently calculate the
nominal plant output, the irradiation
value for the PV plant is multiplied by
the modular efficiency:
1,200 kWh x 15 % = 1,200 kWh x 0.15
= 180 kWh
The nominal plant output of 180kWh
corresponds to a PR of 100%. Since the
actual energy fed into the grid is only
110kWh, the performance ratio can be
calculated using this formula:
110kWh
PR = = 0.61 or 61%
180kWh
The PR is therefore about 61% i.e. 39%
of the solar energy is not converted into
electrical energy that is fed into the grid.
Typically, an EPC will always run a simu-
lation for PR based on the design. So,
if the PR simulated is 75% and the PR
achieved is 61%, then this should be
understood as a warning sign that some-
thing might be wrong with the PV plant.
Especially in arid conditions (i.e. deserts),
it is possible that soiling could cause a
drop in PR. It is recommended cleaning
the irradiance sensor on a daily basis in
order to attain quality data. A soiled irra-
diance sensor might behave completely
different from a well-cleaned one. It is to
be noted here that soiling does not have
the same effect on the irradiance sensor
as it has on the panels.
Conclusion
The following factors can influence the
PR value
Environmental factors
Temperature of the PV module
Solar irradiation
Shading or soiling of the Pyranometer
Shading or soiling of the PV panels
Other factors
Recording period
Panchabuta-Renewable Energy & Cleantech in India
31
Conduction losses Degradation of the solar cells
Efficiency of the PV modules As pointed out above, the degradation
Efficiency of the inverter or de-rating of the solar cells can result
in lower PR values.
Temperature of the PV module
Performance and efficiency of a solar
cell depends, among other factors, on
the temperature of the PV module. At
lower temperatures, the PV module will
be more efficient than at higher tempera-
tures.
Shading of the PV modules
It is likely that the individual PV panels
of various rows will shade each other in
the morning or the evening. This will
result in lower power output. Depend-
ing on the location of the Pyranometer,
the Pyranometer itself will get shaded or
the PR will drop during the time period
when the panels are shaded. Since shad-
ing of the panels cannot be avoided in
total, it is a good approach to install the
Pyranometer on the upper row of the so-
lar PV array.
Measurement period
If the measurement period is too short
(i.e. less than 1 month), chances are that
non-typical events like rainfall, cloudy
weather etc. will influence the measure-
ments. A longer time frame of DAQ will
bring more reliable PR results.
Conduction losses
Conduction losses (DC and AC) will in-
fluence the PR; the higher the losses, the
lower the PR.
Efficiency of the PV modules
Higher the efficiency of the PV mod-
ules, the higher the PR value (with cor-
responding ambient conditions such as
higher solar irradiation at the location
etc.). A constantly falling PR can there-
fore be understood as an indicator of
panel de-rating.
Efficiency and intelligence of the
inverter
The inverters have a huge impact on PR.
Inverters with high efficiency will typi-
cally lead to a good PR. But one must
also be aware, that a fast and accurate
MPP tracking is also important for a high
PR. The more independent MPP trackers
an inverter offers, the better.
www.panchabuta.com
32

INDIA LIKELY TO BE ONE OF THE WORLDS

LARGEST MARKET FOR SOLAR

Pashupathy Gopalan is President, SunEdison Asia Pacific (ex-China),

Middle East and South Africa. He is responsible for building SunEdisons
solar energy business in these regions. Pashupathy has led SunEdison
to build 230 MW of Solar Power Plants in India, Thailand, Malaysia and
South Africa and has raised over $800M in debt and equity for the same.

Seven million farmers
use diesel pump to irri-
gate their crops and are
exposed to the vagaries
in diesel supply and
pricing. SunEdison is
very excited about the
opportunity and has de-
veloped a cost effective
solar pumping solution
that is being deployed
in several states.
Private PPAs will lenge since lenders do not want to take
play an important role
in the solar industry in
India. Large corpora-
tions want to conserve
their capital for their
own core business. This
makes the PPA model
very attractive for such
corporations.
You have participated and developed
projects under the Gujarat State Policy,
the first and second batch of the Jawa-
harlal Nehru National Solar Mission
(JNNSM) and other schemes, for the last
three years. What have been your learn-
ings in India and how are these different
from your global experiences?
The biggest learning has been that it is
tougher to get projects completed in In-
dia compared to other parts of the world
driven by land related issues and labor is-
sues in the construction industry. While
this may be an issue in India compared
to some other countries, this is similar to
what other infrastructure project devel-
opers face whether it is building roads
or conventional power plants. Given
the execution challenges, securing non-
recourse project finance poses a chal-
the risk and expect the sponsor to cover
for the various risks. Challenges always
have a way of making us better and we
are happy that the Indian experience has
made us stronger and better prepared for
the immense growth we see ahead of us.
You have been the first solar power
company in India to sign a private
Power Purchase Agreement (PPA) with
a leading multinational bank, at their
Chennai campus in India. Can you talk
about it a little more? Do you see pri-
vate PPAs playing an important role in
the development of roof top solar in
India?
Private PPAs will play an important role
in the solar industry in India. Large cor-
porations want to conserve their capital
for their own core business. This makes
the PPA model very attractive for such
corporations. Since the finance for these
PPA based projects are raised on a non-
recourse basis, the strength of the PPA
comes from the credit worthiness of the
off-taker of power (the PPA signing enti-
ty). Our experience so far has been good,
and payments have been given to us on
time barring minor hiccups. Its a 100kW
plant that we decided to experiment on
at Standard Chartered banks facility in
Chennai. This has given us a lot of con-
fidence going forward, and has become
one of our prime offerings to large cor-
porate houses.
As the Phase II of National Solar Mis-
sion is about to start and the action has
shifted to the states, what would be the
key policy recommendations that you
would make to both central and state
governments?
In light of the Phase II of NSM, the in-
centive structure VGF Viability Gap
Funding where capital cost is linked
to the incentive received. This should be
changed to a Generation Based Incen-
tive which is linked to performance
of the plant in which power producers
benefit based on the amount of renew-
able energy generated and perverse in-
centives are avoided to reduce the capi-
tal costs to the lowest possible extent

Panchabuta-Renewable Energy & Cleantech in India www.panchabuta.com


impacting the quality of the plant.
There is a lot of interest from policy
makers from around the country in So-
lar Water Pumps for agriculture and ru-
ral water supply. How does SunEdison
view this sector and can you elaborate
on your work in this area?
In India, where agriculture provides live-
lihood to more than 60% population, ir-
rigation pumps consume nearly 20-25%
of the countrys electricity. India spends
more than INR 30,000 crores annually
on electricity subsidy to agriculture and
this is the number one reason for the
poor balance sheets of the Indian state-
owned utilities. By a systematic pro-
gram, switching to Solar Water Pump,
the state electric utilities can improve
their financial status and focus on capi-
tal expenditure to improve the infra-
structure. Seven million farmers use
diesel pump to irrigate their crops and
are exposed to the vagaries in diesel sup-
ply and pricing. Irrigation through Solar
Water Pump is cheaper than irrigation by
diesel, and also provides year around as-
sured supply of water to farmers.
SunEdison is very excited about the op-
portunity and has developed a cost ef-
fective solar pumping solution that is be-
Panchabuta-Renewable Energy & Cleantech in India
ing deployed in several states. We have
already installed over 200 pumps in the
state of Rajasthan.
Can you elaborate on the roof top proj-
ects that you have carried out in India
over the last couple of years. What do
you see as major challenges for the
rapid growth of roop top solar in India?
We have built about 2MWs of rooftop
projects all across India, and have an-
other 3MWs under construction. Most
of these projects have been in the diesel
abatement category with MNRE subsidy
for industrial and commercial custom-
ers. These will contribute significantly
in reducing diesel consumption for the
customers.
The major challenges for the rapid
growth of roof-top solar projects are two
issues
a) MNRE 30% subsidy: The subsidy
mechanism is not fluid enough today
for most solar players to build a sus-
tainable business model. In-fact, the
project economics for diesel abate-
ment are so good, that the subsidy
option can instead be redirected to
residential rooftop solar systems. The
rooftop and distributed solar will
flourish in India just with the Acceler-
33
ated Depreciation policy.
b) Net Metering policy: One of the ques-
tions that arise from customers who
are interested in roof-top solar is what
would happen to the power on non-
working days of industries, or if the
load was lower on certain days in a
week. The solar potential on the en-
tire roof can be achieved only if suit-
able net-metering policies are intro-
duced in every state.
What do you see as the short term (18-
24 months) prospects for solar in India
and how do you see the market evolv-
ing? What is the roadmap for SunEdi-
son in this evolving land scape?
We foresee solar tariffs stabilizing or
slightly going up in India given the rupee
depreciation, and module prices
going up given the polysilicon related
anti-dumping policy in China and other
similar trade disputes playing out. India
will be one of worlds largest markets
for solar and thus we are participating
in various segments to play a significant
role. We have been awarded Indias
Best Solar Power Producer by IPPAI in a
process run by Deloitte and hope to con-
tinue to strengthen our presence in the
market and maintain this leadership.
www.panchabuta.com
34
STATES LIKELY TO LEAD NEAR TERM INDIA SOLAR
GROWTH STORY
We are actively ex-
ploring key partner-
ships in this arena (DG
users) and are offering
solutions on CAPEX
and OPEX basis.
We are witnessing trac-
tion in Punjab, UP and
Tamil Nadu and are see-
ing a 1GW+ solar mar-
ket emerge just from
the states alone through
various models state
tenders, third party
power sale/BOOT model,
captive and group cap-
tive, REC schemes and
depreciation.
Panchabuta-Renewable Energy & Cleantech in India
Bikesh Ogra is the Head of Solar Business at Sterling & Wilson Limited.
In a short span of 3 years, having delivered more than 150 MW of best
performing solar plants, under his leadership the solar division rose to
become a premium Solar EPC provider in the Indian Subcontinent.
Sterling and Wilson started its journey in
electrical contracting almost 90 years ago
and since became a leader in MEP (Me-
chanical Electrical & Plumbing) services
in India. When did Sterling and Wilson
foray into the solar sector in India and
what was the thought process behind en-
tering solar?
Sterling & Wilson witnessed stupen-
dous growth since the turn of the last
century, when the India story started
taking shape. We were constantly on
the lookout for businesses that would
keep us in stead two decades down the
line, centered around sustainability and
environment, apart from belonging to
sectors of high potential growth- and
thus, we identified three key business
areas between 2005 and 2009: Solar,
Co-generation and Diesel Gensets.
Specifically in the case of Solar EPC, we
felt it was a logical extension to our ex-
isting business and our historic lineage,
given three key strengths that we had as
an 87 year old infrastructure player our
strong rooted project execution capa-
bilities in the electrical and essentially
power sector contracting business, our
engineering skills in the electrical do-
main and our civil expertise (two key
aspects of solar PV construction) backed
by further credibility and experience that
we share with our associates.
Although the initial thought process to-
wards our foray into solar started much
earlier, we formally made an entry into
the sector as a turnkey solar EPC solu-
tion provider in the year 2009-2010.
You have developed multiple projects un-
der various schemes (RPSSGP, JNNSM,
State Solar Programs, REC etc.) and have
been executing solar projects in India for
the last three and half years. What has
been your experience and learning in this
period?
It has been an amazing journey of con-
stant learning. As on date, we have ex-
ecuted 22 projects combining to form a
solar portfolio of about 300 MW, out of
which about 150 MW of projects have
been installed, while another 150 MW
of projects are under execution. Our
200 member strong design team across
the country has developed rich exper-
tise across all these 22 projects and
has worked closely with internationally
acclaimed design consultants from Eu-
rope. Our experience over the past few
years in solar has taught us 3 key les-
sons: treat each solar project differently
(challenges differ from state to state), be
ready to scale-up (and scale down!) as
the business cycle mandates and main-
tain focus on quality construction to
endure the long run since that is what
delivers the IRR for the client in the final
analysis.
Overall, our experience in Solar contin-
ues to be full of learning and incredibly
fruitful.
Given how cost conscious and competi
www.panchabuta.com

tive the Indian market is, how has Sterling
and Wilson been able to distinguish itself?
First, at the expense of sounding re-
petitive, I would like to make a point on
competitiveness: We are in the contract-
ing business now for the past 87 years
and stand for certain values that we be-
lieve are an attractive proposition to our
clients. There would have been no rea-
son for us to exist so long, had we been
not competitive or cost conscious, so we
believe we have the wherewithal to fig-
ure out that part of the story in as far as
our tryst with any type of infrastructure
contracting business is concerned.
Second, we believe in pro-actively work-
ing with the clients to arrive at mutu-
ally beneficial designs and project costs
rather than merely reacting to market
pressure Our first offering to clients in
most cases goes with our high-end de-
sign, like some of our esteemed peers,
and through a consultative process we
are open to value engineering to suit
their budget and needs. From time to
time and from one state to the other, we
also focus on where we can add extra
value to our offering (E.g.: offering land
and evacuation in Rajasthan and Tamil
Nadu, financing references through our
banking relations, attractive guarantee
and warranty coverage based on the
meritocracy of projects etc.), and we see
that clients appreciate this very much.
Third, our focus always has been on
delivering plants on time, with quality.
The fact that 3 out of the top 5 highest
generating plants in the country under
MNREs JNNSM Phase I Batch I belongs
to us, needs to be noted.
Fourth, we strongly believe players who
believe solar is a short term game will
cease to exist.
Finally, our state specific approach, wide
network of sales and execution offices
across the country and our immense ex-
perience in power sector working with
almost every state nodal agency and
electrical body, coupled with our geo-
graphical spread of installations makes
us one of the most sought after solar
EPCs. In fact, all of the above factors
have ensured that even in this current fis-
Panchabuta-Renewable Energy & Cleantech in India
cal (2013-14), where business sentiments
are quite low, we have already installed
41 MW of solar projects, making us one
of Indias leading EPCs this year in terms
of on-ground installations.
What do you see as the potential for so-
lar as a distributed generation source?
Have you seen any synergy in this with
your diesel genset business?
Yes, we see immense potential in solar
as a distributed source of energy genera-
tion. Of late, many models have emerged
in the market to effectuate localized so-
lar power plants (load closer to source of
generation) on roofs and on ground, and
with a multiplier effect. To realize this
immense opportunity, we are offering
complete turnkey EPC solutions in the
rooftop and off-grid solar space given
our SP1A (Highest financial capability,
Highest technical execution capability)
accreditation by CARE which makes us
an esteemed channel partner of MNRE
for the rooftop/off-grid space, equipping
us with eligibility to claim subsidy for
our clients. In fact, we were one of the
first solar EPCs to execute a large 1 MW
roof-port installation over a warehouse
roof at Delhi about 2 years ago, and have
followed that up with regular successes
in the distributed solar space. Our recent
small solar installation at one of Mum-
bais prime residential properties will be
soon followed by two other niche roof-
top projects at a prominent mall and a
factory roof across the country, as we
aim to achieve 5 MW of small solar (roof-
top/off-grid) installations over the next
one year.
On your second question on the synergy
with diesel gensets, let me tell you, we
are poised for success through combined
synergies of our DG business and our of-
fering in the distributed solar space. To
be more specific, we assist some of our
DG users reduce diesel off-take through
provision of DG+solar+grid based solu-
tions, while for some others who are in-
terested in going completely off grid, our
DG+ solar (PV-Diesel Hybrid) solution
comes handy. We are interestingly start-
ing to see a high degree of interest from
prospective DG clients and existing DG
users to go solar and in that sense, we
35
think solar and diesel gensets are per-
fectly synergistic for our value proposi-
tion in the distributed solar space. We
are actively exploring key partnerships in
this arena and are offering solutions on
CAPEX and OPEX basis.
As the Phase II of the National Solar
Mission is about to start and the action has
shifted to the states, what are your plans?
Do you have a state specific approach?
It is a matter of great pride for us to state
that we are the largest solar EPC in the
country, in terms of geographic spread
across the country, spanning over 12
states, whereas most of our competi-
tion has a footprint only across a few
key states. Secondly, as a professional
contracting organization we have about
20 regional execution setups across the
country, and with regards to Solar, we
are wide spread in North and South with
our design and engineering centers at
Noida and Bangalore and our execution
centers at capital cities of most states
witnessing solar action, namely Uttar
Pradesh, Punjab, Madhya Pradesh, Ma-
harashtra, Tamil Nadu, Rajasthan, Gu-
jarat, Andhra Pradesh and Karnataka
with at least 100 member strong teams
at each location. Now, as action shifts to-
wards the states, we feel better equipped
with our pan India experience and our
ideology of state-specific-approach.
Taking a case in point, for example, in
most of the southern states such as Tam-
il Nadu/Andhra Pradesh we realized ear-
ly that land and evacuation would pose
a major threat to the final number of in-
stallations that would mushroom in that
state and hence we strongly focused on
creating a value addition for our clients
there by offering land, permits and evac-
uation bundled with our EPC solution.
Similarly, in the state of Rajasthan we
invested into solar parks from the per-
spective of engaging projects under REC
scheme, plan for future JNNSM projects
under Phase II and for our deprecia-
tion-based investors across the country
who target higher yield apart from IT
benefits. On off-grid and rooftop solar,
our approach has been different in the
sense, we focus on business models
www.panchabuta.com
 36
rather than states, which decides geog-
raphies in which we implement more
projects delivering better value for our
clients BOOT model (power purchase
by clients) and capital expenditure (foray
into green building/solar power by cli-
ents) .
Our state focused approach has helped
us bag solar PV projects worth 50 MW
this year, while another 55 MW of solar
PV projects are at various stages of dis-
cussions, with a mix of projects under
different mechanisms viz. state policy,
REC schemes, accelerated depreciation
schemes, and third party private power
sale BOOT model/OPEX model.
Given the interest in group captive/third
party power sale models, are there any
plans for Sterling and Wilson to invest in
solar plants with developers and sell en-
ergy to such customers?
Yes. In fact, we are on the verge of con-
cluding our third project on BOOT basis
whereby a partnership of sorts between
us (as the EPC) and our partner (as the
project investor and power seller to the
end customer) is selling energy to cus-
tomers typically those who wish to
go solar/procure solar power but do not
have the wherewithal to endure the new
technology adoption cycle or capital ex-
penditure. Although, our first two BOOT
Panchabuta-Renewable Energy & Cleantech in India
projects are on roofs of prime properties
in metropolitan cities, we are actively
working on various models and creat-
ing synergies with potential partners to
pursue the OPEX model in a much larger
way i.e. on MW-scale.
What do you see as the short term (18 -
24 months) prospects for solar in India
and how do you see the market evolv-
ing? What is the roadmap for Sterling
and Wilson in this evolving land scape?
Overall, the economic scenario with a
constantly falling rupee - which clearly
hurts imports, on which the industry is
heavily dependent - and negative senti-
ments on growth doesnt look encourag-
ing until mid of next year. However, we
expect a strong recovery India has no
option but to grow from 2015, and when
that happens the immediate power gen-
eration capacity thatd come up (at least
a chunk of it) would be Renewable and
more precisely solar. In the short term,
we are eagerly awaiting the launch of
JNNSM Phase II, as much as any other
industry player since we see that as a
large chunk of the private market for the
next three years, but we also understand
that developments on the political front,
technical resolution on various topics in
the bid document and general fiscal sce-
nario may play a role in deciding when
the Phase II is formally launched.
In contrast, clearly, looking at the trend
that seems to be emerging this year,
states we believe, will lead the solar
revolution in India over the next year or
more. We are witnessing traction in Pun-
jab, UP and Tamil Nadu and are seeing
a 1 GW+ solar market emerge just from
the states alone through various models
state tenders, third party power sale/
BOOT model, captive and group captive,
REC schemes and depreciation. Tamil
Nadu clearly seems to lead at the mo-
ment, just that it would help the state if it
could fast track PPA signing and TNERC
orders apart from resolving deadlock
over SPO. There is also a quickly maturing
third party power sale market which is
taking shape in Andhra Pradesh, Maha-
rashtra, Madhya Pradesh and Karnataka
in the near short term.
Given the above developments, our
roadmap in the near term is focused on a
two pronged strategy domestic and in-
ternational. Domestically, in India, over
the next many months, we are focused
on building solar park infrastructure
(for third party power sale/trading and
JNNSM projects) and help our clients ini-
tiate discussions with power purchasers
for PPAs, construct some good projects
through the Tamil Nadu, Punjab and UP
state allocations and expand our activi-
ties in the distributed solar space. On
the international front, we are strongly
focused on Saudi Arabia, North and
East Africa apart from South Africa and
Central Asia and clearly see a pipeline
of about 175 MW 200 MW emerging
through our work in these markets over
the next 12 - 14 months. Clearly, we are
optimistic about the solar business in
the near term.
www.panchabuta.com
38
SOLAR SHOWCASE STATE - TAMIL NADU
Tamil Nadu has been the undisputed leader in the renewable energy sector in India. As of 31st July 2013, renew-
able energy power generation capacity constituted 38% of the total installed capacity in Tamil Nadu. Within
renewables, wind energy constitutes almost 90% of the total installed capacity in the state.
In fact, the leadership of Tamil Nadu in
the renewable energy space is due to the
dominance of the wind sector. At the
end of the year 2012-13, the total wind
power generation capacity in Tamil Nadu
was about 38% of the total wind genera-
tion capacity in the entire country. (For
more details, please refer to the wind
section of the handbook)
However, when it comes to solar, the
contribution of Tamil Nadu has been
negligible. Of the 1,839 MW of solar
PV installed capacity in India (as of 31st
July 2013), Tamil Nadu has just 17 MW
installed capacity, representing less than
1% of the total share. But that situation
is set to change with the implementation
of the Tamil Nadu Solar Energy Policy
2013.
Solar Resource Availability
Tamil Nadu is a sunny state with high
solar insolation of about 5.6-6.0 kWh/m 2
in a majority of places. The State also has
around 300 clear sunny days in a year.
Some of the southern districts like Ra-
manathapuram and Sivagangai are con-
sidered to be hotspots for solar in the
state.
Status of Solar in Tamil Nadu
Tamil Nadu has 17 MW of installed
solar capacity as of 31st July 2013.
All the projects were allotted under
different schemes of JNNSM (Demonstra-
tion scheme, Rooftop PV and Small
Solar Generation Programme (RPSSGP)
and under the Batch I , Phase I of the
National Solar Mission) and under
Renewable Energy Certificate (REC)
mechanism. The State introduced its
own solar policy in October 2012.
In December 2012, the Tamil Nadu
Generation and Distribution Corpora-
tion Limited (TANGEDCO) released
Panchabuta-Renewable Energy & Cleantech in India
the tender documents for allocation of 2013 and 6% subsequently) for most
1,000 MW of solar projects. The tender HT consumers. The SPO is intended to
provided 30 days time for interested create market demand and lets the obli-
applicants to submit their bids for the al- gated customers fulfil their obligation in
location of projects. Bids for about 500 many different ways.
MW were received and this included
bids from some of the leading solar devel- The obligated consumers may fulfil their
opers like Sun Edison, Welspun, Lanco etc. SPO by
The lowest bid received was Rs. 5.97/kWh generating captive solar power in
but TANGEDCO announced a workable Tamil Nadu equivalent to or more
tariff of Rs. 6.48/kWh after a review of
than their SPO
the commercial bids.
buying equivalent to or more than
It has been reported that the Letter of
Intent (LOI) for projects up to 690 MW their SPO from other third party de-
velopers of solar power projects in
has been awarded, and the work on the
same is expected to start soon with the Tamil Nadu
signing of Power Purchase Agreement buying RECs generated by solar
(PPA). power projects in Tamil Nadu equiv-
alent to or more than their SPO
Tamil Nadu State Solar purchasing power from TANGEDCO
Policy at Solar Tariff
The Tamil Nadu Policy 2012 is one of
It should be noted that the SPO and Re-
the most ambitious of its kind. It sets an
newable Purchase Obligation (RPO) are
aggressive target of 3,000 MW by 2015,
two different obligations. The RPO has
with 1,000 MW installed every year
been fixed under the RPO Regulations
from 2013 to 2015. The target has been
issued by the Commission whereas the
split into three categories Utility Scale,
SPO has been made mandatory under
Rooftop PV and REC based. The table
the Tamil Nadu Solar policy 2012. The
given below provides the details.
obligated entities under RPO regulations
include distribution licensees, captive
Phase Utility Roof- REC Target
consumers and open access consumers
(2013- top PV (MW) (MW)
2015)
Scale
(MW) while the obligated entities under the
(MW)
SPO include
2013 750 100 150 1000
HT consumers (HT Tariff I to V)
2014 550 125 325 1000
- SEZ
2015 200 125 675 1000
- Industrial connections with guar-
Total 1500 350 1150 3000 anteed power supply
(by - Telecom towers and IT parks
2015)
- All colleges and residential schools
- Buildings with built up area of
Unique Policy Driver - Solar 20,000 m 2 or more
Purchase Obligations (SPO)
LT commercial consumers (LT Tariff V)
One of the pioneering initiatives under
the policy has been the Solar Purchase SPO would be administered by TANGED-
Obligations. The policy mandates a 6% CO which would act as the nodal agency.
SPO (starting with 3% till December Non-compliance with the SPO regula
www.panchabuta.com

tions would mean that the obligated
entities would have to pay a fine which
would be equal to the forbearance price
of solar RECs (as determined by CERC)
required to fulfil the obligation. The
penalty would be paid to TANGEDCO
who would then purchase the requisite
RECs required for fulfilling the obliga-
tion from the market.
Rooftop PV and Net-metering
The policy targets 50 MW of domestic
rooftop PV installations and had pro-
posed the following Generation Based
Incentive.
Year Year Year Year Year
1 2 3 4 5 6
Rs. 2/ Rs. 2/ Rs. 1/ Rs. 1/ Rs. 0.5/
kWh kWh kWh kWh kWh
In addition, net-metering is also planned
to be implemented in residential and
commercial establishments at various
voltage levels.
Other Solar Initiatives
While the utility scale solar initiatives
have been grabbing the headlines, Tamil
Nadu has also witnessed much progress
in off-grid solar initiatives with a major
focus on rural areas. These applications
fall broadly into three categories Green
Houses Scheme, Solar Street Lighting
and Solar Water Pumps.
Chief Minister Solar Powered
Green House Scheme (CMSPGHS)
In June 2011, the Government of Tamil
Nadu launched the Green House Scheme
under which it is targeted to construct
3 Lakh houses over five years (2011-2016)
in rural areas. 60,000 Solar Powered
Green Houses of 300 square feet each
will be constructed every year at a unit
cost of Rs.1.80 lakhs per house.
Each house is provided with five solar
powered Compact Fluorescent Lamps
(CFL), one each in bed room, living
room, kitchen, toilet and verandah. The
CFLs can be operated for five hours a
day. There will be a grid backup and the
systems will have a smart power condi-
Panchabuta-Renewable Energy & Cleantech in India
tioning unit to charge the battery from
grid only in rainy or cloudy days when
solar power is insufficient. There will
be direct Electricity Board (EB) supply
to lights in case of failure of battery/in-
verter. The solar system will have three
day autonomy.
Solar Street Lighting Systems
Another signature initiative of the Tamil
Nadu Government has been the Solar
Street Lighting programme for rural
areas. Under this programme, 1 Lakh
Street lights are targeted to be installed
over a five year period (2011-16), mainly
in village panchayats.
Year
The solar street lights will be energised
through a combination of centralised and
decentralised models. Existing clusters
Rs. 0.5/ of 10 to 15 street lights with tube lights
kWh
or bulbs will be replaced by 20W LEDs.
The cluster will be energized by a 500
/ 600 Wp Central Solar PV power plant
(Approximately 9,500 plants to energise
95,000 lights). In the decentralised model,
5,000 standalone SPV street lights with
20W LEDs will be erected at scattered,
grid inaccessible locations.
Solar Water Pumping Systems
Under this category, the Tamil Nadu gov-
ernment has invited tenders for installa-
tion of 530 AC submersible solar PV wa-
ter pumping systems of 4.8 kWp capacity
each. These pumps will be installed across
various places in Tamil Nadu. The end ben-
eficiary needs to pay only 20% of the sys-
tem cost and the rest is borne by the Tamil
Nadu Government. The solar pumps come
with a five year maintenance contract. The
pumps will initially be installed in paddy
growing areas.
Skill Development
Initiatives
Recognizing the employment and en-
trepreneurship potential that solar en-
ergy will provide in the coming years,
the GoTN, in a pioneering initiative,
launched solar training programs for
professionals and entrepreneurs through
the Entrepreneurship Development In-
stitute (EDI). Since the launch of the
program, EDI, GoTN has trained and
39
certified more than 200 engineers and
entrepreneurs in a rather short span of
about five months.
Capacity Building and
Outreach Initiatives
RENERGY
The GoTN has been organizing RENER-
GY- an International Renewable Energy
Conference and Expo- over the last two
years in Chennai. RENERGY in 2013
has grown to become Indias largest
renewable energy conference with more
than two thousand delegates from India
and abroad. It has become one of the
most important platforms for national
and global thought leaders in solar ener-
gy to meet and deliberate on the growth
of the industry. The program had a num-
ber of capacity building initiatives that
were first of their kind including more
than eight workshops, expert sessions and
sessions for research and innovation.
Outlook for Tamil Nadu
Solar
With the number of active solar policies
in the country being limited to a few
states, the ambitious TN solar policy has
captured the interest of many develop-
ers mainly due to the innovative tariff
structure as a result of the annual tariff
escalation. The increasing tariff struc-
ture offers comfort to developers as this
will be in line with the increase in tariffs
for consumers, hence reducing the bur-
den of the solar tariff on the distribution
company.
In addition to this, the novel SPO mecha-
nism being adopted in TN could serve to
bring in additional revenue to TANGED-
CO which could be used to make pay-
ments to the developers.
All this has resulted in increased inves-
tor confidence in the solar sector in TN
and we expect to see the state becoming
one of the forerunners in the solar field
after spearheading the growth of the
wind industry in India.
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