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The market this quarter – Installed PV capacity in India reaches 1.41 GW

The market this quarter – Installed PV capacity in India reaches 1.41 GW

We have released our latest quarterly update from the 10th edition of the INDIA SOLAR COMPASS. The total installed capacity in India has now reached 1.41 GW.

  • Most off-grid projects that apply for capital subsidy from the MNRE in the new financial year will be put on hold until the end of the financial year (March 2014).
  • It is likely that developers in both Tamil Nadu and Andhra Pradesh will opt for construction/bridge financing to complete their projects on time.
  • As of January 2013, central inverters account for 95% of the installed capacity in the country.

Key updates from the last quarter (January – March 2013)

Policies

  1. Due to the unavailability of unbundled power, the MNRE has decided to go ahead only with the allocations for 750MW based on Viability Gap Funding (VGF) for Phase 2 of the NSM.
  2. It is likely that most off-grid projects that apply for capital subsidy from the MNRE in the new financial year will be put on hold until the end of the financial year (March 2014).
  3. In Tamil Nadu, a capacity of 226 MW has been tied up for and the projects are expected to be commissioned by January 2013. The state has decided to provide a ‘workable tariff’ of INR 6.48/kWh (at an annual escalation of 5% for the first 10 years of the 20 year PPA).
  4. Andhra Pradesh’s solar project tender was oversubscribed, with bids were received from 184 applicants who bid for a total capacity of 1,340 MW. The lowest bid (L1) in the whole of Andhra Pradesh was at INR 6.58 (EUR 0.10/USD 0.13) /kWh. At some substations the L1 is as high as INR 8.89 (EUR 0.14/USD 0.18)/kWh.
  5. Kerala released a draft solar policy and has set itself a target of an installed capacity of 500 MW by 2017 and 1,500 MW by 2030. Unlike the off-grid capital subsidy scheme under the NSM, the state will incentivize distributed solar through Feed-in-Tariffs (FiTs).
  6. Punjab has released a request for proposal (RfP) document for allocation of 300 MW of solar PV in the first phase of its state solar policy. The bid has been divided into two categories, 50 MW for new developers and 250 MW for experienced developers. The benchmark tariffs for the bidding process have been fixed at INR 8.75/kWh for companies not availing accelerated depreciation and INR 7.87/kWh for companies availing accelerated depreciation.
  7. Uttar Pradesh has updated and finalized its solar policy and it is now called ‘Uttar Pradesh Solar Policy 2013′. The state has announced bidding for 200 MW of capacity on March 15th 2013.

Projects (PV)

  1. In the last quarter (January to March 2013) 226.5 MW of solar PV capacity has been added in India.
  2. Under batch two of phase one of the NSM, projects by developers such as Welspun, Mahindra, Kiran Energy, Azure, Gas Authority of India Limited (GAIL), Saibaba Green Power, SunEdison have been completed and the remaining capacity from Green Infra and Fonroche Group has been commissioned.
  3. For batch two projects, a significant delay has been reported in the projects being developed by Essel Infraprojects.
  4. In Madhya Pradesh, Welspun’s 130MW project in Neemuch district of Madhya Pradesh has arranged for financing and has selected its equipment suppliers.
  5. Projects allocated in Karnataka last year are nearing financial closure and are in discussions for vendor selection.
  6. In the last quarter, there was accreditation of 57.25 MW of planned capacity based on the REC mechanism. The total proposed capacity of accredited projects now stands at 78.16 MW.
  7. Giriraj Enterprises, a group company of the Malpani Group from Maharashtra has emerged as the largest player betting on the REC market in India. The company is accredited to set up 40.65 MW of REC based solar projects.

Financing

  1. In the last quarter (January – March 2013), financial closures have been achieved for multiple projects in Madhya Pradesh and Karnataka.
  2. It is likely that developers in both Tamil Nadu and Andhra Pradesh will opt for construction/bridge financing to complete their projects on time.
  3. Many project developers are now looking at the third-party PPA market. Some PPAs have already emerged from this commercial parity driven market segment but it is not clear how the lenders will react to such projects.

Industry analysis

  1. There are up to 18 prominent inverter suppliers that are present in the Indian market. However, just six companies, i.e., SMA, Bonfiglioli, Schneider, ABB, AEG and Power-One make up for 87% of the current inverter market share in India.
  2. From these six companies, power solution companies such as AEG, ABB and Schneider are already manufacturing solar inverters in India.
  3. As of January 2013, central inverters account for 95% of the installed capacity in the country.
  4. Inverter suppliers such as ABB and Power-One plan to launch new central inverter models with the capacity of 1 MW and 1.4 MW respectively.
  5. Currently, central inverter prices in India range between INR 4.2 (EUR 0.06/USD 0.08)/kWp (output) and INR 7.8 (EUR 0.11/USD 0.14)/kWp (output), depending on the type and brand of the inverter.

For a complete update on the last quarter, download the latest edition of our INDIA SOLAR COMPASS here.

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