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India Solar Excellence – DC cables and performance issues

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BRIDGE TO INDIA is the leading consultancy and knowledge services provider in the Indian renewable market. We work with all industry stakeholders including technology companies and contractors, project developers and investors, government agencies and developmental institutions. We have a unique vantage point on the market dynamics, combining the 360 degree view from our market intelligence capability with the in-depth analysis performed as part of our consulting and transaction advisory businesses. Our goal is to enable innovative cleantech solutions in India.

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Rooftop solar market in India has grown at a CAGR of 98% in the last four years. As of September 30, 2016, total installed capacity stands at 1,020 MW (refer INDIA SOLAR ROOFTOP MAP 2016). Growth in this market is being primarily driven by improvement in price competitiveness of rooftop solar power vis-à-vis grid power.

Commercial and industrial (C&I) segment currently makes up for almost 63% of this market. The remaining 25% goes to residential and around 12% to government buildings. C&I segment has grown at a compounded annual growth rate (CAGR) of 103% in last four years. As viability improves, BRIDGE TO INDIA expects this segment to almost double by 2017 and then continue its expansion to achieve a CAGR of 51% until 2022.

FULL STORY

Last month, Tamil Nadu Generation and Distribution Corporation Limited (TANGEDCO) floated a tender for 500 MW of utility scale solar projects. This tender has received limited interest and that too predominantly from smaller developers who have submitted 20 bids totalling just 116 MW. This tender follows an allocation of approx. 1,200 MW in early 2015 where a fixed tariff of INR 7.01/kWh (USD 0.10/kWh) was offered to developers. For that allocation, interest was received for a capacity of around 3,200 MW from over 90 developers. Given such large oversubscription, Tamil Nadu tightened qualification criteria significantly for this tender. Bidders were required to own land at the time of bidding and fully commission the projects within 10 months of PPA execution, which is much more stringent in comparison to other tenders.

  • Developers had major concerns about grid curtailment, payment delays and a very tight timeline but no credible steps were taken to address these;
  • A rush to complete the tender in time has in fact proven counterproductive;
  • There is no reasonable justification for why Tamil Nadu does not go through National Thermal Power Corporation (NTPC) or Solar Energy Corporation of India (SECI) for allocations; this could enhance off-take bankability and help reduce tariffs;
FULL STORY

Rapid growth in the US rooftop solar market and the number of net-metering connections has opened a battle-front between utilities on one hand and solar developers and consumers on the other hand. Utilities are arguing against the rationale of giving customers full retail credit for their excess energy and vigorously challenging the current net-metering framework in many states including Arizona, Nevada, Maine, Florida, and Alabama. Future net-metering policy in these ‘battle ground states’ is now being decided by public hearings, ballots, regulatory intervention and court rulings.

Evolution of net metering policy in USA holds vital lessons for the fledgling rooftop solar market in India, which is still very small but growing rapidly (refer).

  • Many Indian utilities are already resisting net-metering connections for commercial and industrial (C&I) customers;
  • The current Indian net-metering regulations are too simplistic and they need to be overhauled urgently for sustainable growth of rooftop solar in India;
  • Waivers provided for promoting the rooftop solar market need to be phased out over time and both utilities and customers should be aware about how this transition will happen;
FULL STORY

India’s total installed solar capacity including rooftop and off-grid segments has crossed 10 GW mark, a major milestone for the sector.

India is expected to add new solar capacity of 5.1 GW this year, which is a growth of 137% over last year. BRIDGE TO INDIA expects average annual capacity addition of 8-10 GW per annum from next year onwards. The pace of sector activity has picked up tremendously in the last two years (see chart below) because of strong government support and increasing price competitiveness of solar power. India is expected to become the world’s third biggest solar market from next year onwards after China and the USA.

FULL STORY

The Indian government has launched a momentous demonetisation drive to weed out black money and clean up the economy (refer). We have often heard gossip about some of the black money, estimated to be close to INR 30 trillion (USD 440 billion) or about 20% of Indian GDP, finding its way into the Indian solar sector and possibly explaining some of the overly aggressive bidding behaviour in solar projects. It is impossible to ascertain veracity of such claims but the sector seems to have its share of other unethical practices. Other commonly heard chatter is that some project developers over-estimate project costs to draw down more debt and reduce their equity contribution.

  • We do not believe that demonetization will have any material impact on the Indian renewable sector as most leading project developers are backed by reputable Indian and international sponsors with robust corporate governance practices;
  • Indian lenders can help in curbing unethical practices in the sector by improving their risk assessment capability and tightening credit criteria;
  • Poor risk assessment and documentation capability of Indian lenders poses one of the most underestimated challenges for the sector;
FULL STORY

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