A fair week in the Indian solar industry
Dr. Tobias Engelmeier is founder and Managing Director at BRIDGE TO INDIA. He consults international companies in developing successful market strategies in India.
Last week was a week of conferences and fairs for me – a good opportunity to take stock of what is happening in the Indian solar industry. I attended the Intersolar in Mumbai, where we had our own stall, and the 6th Renewable Energy India Expo in Delhi. Let me share my impressions here. The main takeaways are:
- Everyone is looking to sell power under private PPAs
- There is less interest in NSM Phase II than in the RPO market
- Anti dumping duties were hyped and then did not happen
- Quality seems to (slowly) become more valued in a maturing market
The Renewable Energy Expo was around three times larger than Intersolar Mumbai. It had stalls from all renewable energy technologies – although solar dominated. Most Chinese and American solar companies had their stalls there. Europeans and Indians were more present at Intersolar. A few large players, such as Bosch had a booth at both fairs. Overall, it seemed that while there was more action at the Renewable Energy Expo, I had more serious conversations at the Intersolar. These were the themes that came up in my conversations:
Merchant power plants: Many project developers are looking at setting up projects based on private power purchase agreements (PPAs) with industrial or commercial customers. Such plants could be captive, often on rooftops and in the range of 100kW to 2MW or they could be ground mounted and servicing several customers through what is called group captive or Open Access (OA). The latter are typically in the range of 20MW to 100MW. None of these have been built yet, but in the absence of other policy-based project opportunities this is where interest focuses on.
NSM Phase II: There was surprisingly little discussion of the upcoming National Solar Mission (NSM) Phase II. Whenever the discussion turned to the topic, there was a lot of vague second guessing around viability gap funding, the split between PV and CSP. All in all, there was none of the vibrant sense of expectation we saw before the first phase of NSM.
RPO/REC: Both merchant plants and NSM projects are tied to the Renewable Purchase Obligations (RPO) requirements of distribution companies (DISCOMs), captive generators and OA customers. At most of my conversations, there was a sense that the RPO requirements would drive the market through the coming year and there is cautious optimism that RPOs would be enforced even on heavily indebted public sector DISCOMs. The view on Renewable Energy Certificates (REC) is more sombre. They are still seen as a high risk (and high upside) proposition. Many developers are looking for ways to share that risk (and the upside) with power consumers in some way.
Anti dumping duties: These were the “whispers in the corridors”. A Chinese module manufacturer told us that India will impose anti-dumping duties on Chinese modules very soon – it was to be announced this week. As always, at fairs such rumours spread fast and wide. Soon everyone was talking about it. So far, nothing has happened. And, given that there were no announcements on policy hearings yet, we continue to think that duties will not be imposed soon.
Andhra Pradesh and Tamil Nadu solar policies: Most market participants are still mulling over the details, loopholes and implications of these policies. We will come out with Policy Briefs on these policies soon to give our analysis.
Cost/quality: The question was how to ensure that India gets the best solar technology at the most competitive prices? Project developers are becoming more far-sighted and quality conscious. Prices offered are highly competitive. The hitch seems to be with banking institutions: will they finance projects under new (private) PPAs? Will they encourage the spread of new manufacturing technologies that can lower price/increase module efficiency?