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Solar Market in India 2012. “How to develop decartelized & Rooftop Solar”. Chandan Guha Mahindra Solar One August 29 th , 2012. You have seen the headlines…India as the place to be. BusinessWorld, 18 th Aug, 2010. ADB, 3 rd May, 2010. Money Control, 25 th Sep, 2010.

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slide1

Solar Market in India 2012

“How to develop decartelized & Rooftop Solar”

Chandan Guha

Mahindra Solar One

August 29th, 2012

you have seen the headlines india as the place to be
You have seen the headlines…India as the place to be

BusinessWorld, 18th Aug, 2010

ADB, 3rd May, 2010

Money Control, 25th Sep, 2010

ET, 24th Sep, 2010

ET, 11th Aug, 2010

ET, 1st Oct, 2010

TOI, 27th Sep, 2010

ADB

ADB aims to attract $6.75bn of solar investment in next three years

VA Tech Wabag IPO (Water Treatment) subscribed 15.2 times: raising 475 Crore

Goldman Sachs

Goldman Sachs Picks 8% In XL Telecom (XL Energy) On FCCB Conversion

Blackstone

Blackstone invests Rs 1,350 cr in Moser Baer's energy biz (thermal, wind and solar)

Money Control, 23rd Aug, 2010

BusinessWeek, 24th Aug, 2010

ET, 24thSep, 2010

slide3

Solar Environmental Scan

  • Favorable Central and State Policies and Allocations
    • Over 1727 MW Allocated (NSM + State); 1046 MW installed till June
    • Payment Security corpus of Rs. 486 Cr approved by Cabinet
    • Joint Secretary + Section 25 PSU dedicated to Solar
    • New NSM Phase 2, Rajasthan, Karnataka programs + RPO
  • Irrational Exuberance Slows…Serious National and International Players Engage
    • Serious Power Developers…Reliance, Lanco, Welspun
    • International Developers…SunEdison, Azure, Astonfield
    • Strong EPC Competition…Lanco, L&T, Moser Baer, Wipro…Scale
    • Domestic Technology Landscape Improving…but uphill task to compete

Chinese suppliers are emerging as price leaders…supply chain maturing

  • Financing is Still Key Driver…and Interest Rate More Critical over the next Year
    • Project Finance likely only to credible brands
    • Most Indian banks lending + US Exim, OPIC, IFC
  • Evacuation continues to be a Worry, if not a bottleneck
    • GETCO – helping out but falling behind
    • Everywhere else, it has become completely a developer’s headache
  • Land is becoming bigger and bigger a pain
    • Can take anything upto a year
    • Solar Parks are becoming scarce and expensive

3

slide4

Solar Adoption… Favorable Government Policies

Globally Solar Growth is Strong

India Adoption is just taking off

India w/FIT

24 GW Installed Base

Gov’t Programs Providing Incentive

  • Longest Plant 20+ yrs
  • Scalable for On-Grid & Off-Grid
  • Guaranteed Feed-in-Tariff for 25 yrs
  • Continual Technology Cost Reduction
drivers for indian solar industry
Drivers for Indian Solar Industry
  • Policy / PPA

Customers

Financing

Execution

Technology

the good news demand is clearly rising
The good news… Demand is clearly rising
  • Improving Market Drivers
  • Strong Gov’t commitment (RPO, FIT, subsidies)
  • Solar awareness is on a high…now we need credible projects
  • Attractiveness improving w/rising diesel fuel cost & climate change concerns
  • Prices coming down…but needs to be rational
  • Delivery Models are Evolving
  • Improving deployment capabilities in India from both local and international players.
  • Entrepreneurs are finding business models…but some entry barriers are needed
  • Off-grid solar solutions are also finding “paying” customers
slide7

Customers…Willingness to Pay

  • On-Grid Nodal Agencies
  • Ensuring Power Produced is Bought
  • Ensuring Power Bought is Paid
  • Transparency in payment
  • LAND becoming an issue
  • Evacuation infrastructure is an issue
  • Off-Grid Consumers
  • Tomorrow’s market…distributed IPP Model
  • Interesting models being seen
  • Distributed generation increasing
  • Solar City looks great in concept

Can we repeat the Computer Revolution in Solar?

slide8

Main Question – How to sustain Rooftop Model

  • Solar Cities attracting the bankers
  • “Gandhinagar” pilot throws up opportunities
  • 80% Govt roofs, 20% private takes away risks
  • Generation Incentive attracts roof owners
  • Net Metering avoids the issue of offtake
  • Captive Rooftops for industry
  • Fits in both Off-Grid and RPO streams
  • Have the knowledge to handle large power
  • Newer business models to emerge
  • Lender’s confidence should increase with the results

Can we get project financing for these projects?

technology what may make the difference
Technology… what may make the difference?
  • Bank-ability at the Right Cost
    • Deployed systems and familiarity
    • Global scale critical to achieve cost competitiveness
    • Robust performance guarantees – tilt, N-S, E-W
    • Ability of implementation on all types of roofs
    • Innovative solutions for penetration, stress bearing, GCR
    • Micro-grid technologies with battery energy storage
  • Efficiency / Innovation
    • High CUF for the technology choices
    • Adjustment to Indian Roofs
  • Basics
    • Avoidance of theft and support of roof owners
    • Off-take with minimum theft and maximum billing
slide10

Can we mature fast enough in Technology

Technology

1

2

3

4

How does

industry

boost R&D

How to make

Material

Science

part of

ecosystem

Continuous

evaluation of

emerging

technologies

For efficiency

And GCR

Drive cost

Economics

Continuously

And quickly

“True Potential” will entirely depend on how “technology” handles itself

In the next one year – innovative solutions for Indian Roofs critical

financing is key and will challenge technology
Financing is key and will challenge technology
  • Regulatory and Off-taker Risk
  • Captive Power, Solar Cities and others
  • Credibility of Developer
  • Clear Operating Structure and Business Model
  • Debt at the right Cost
  • IREDA, IIFSL etc. can play a major role
  • Competency to Execute
    • Background in managing complex projects
    • Incentivizing the roof owners
    • Strong EPC/ O&M contract and guarantees
    • Access to bankable technology

11

comes down to the first projects executed
Comes down to the first projects executed

Project Management

Robustness of Off-take

Performance

  • Knowledge of Indian conditions
  • Roof availability
  • EPC Contracting
  • Metering flexibility
  • Security and surveillance
  • PPA
  • Metering – gross v/s net
  • Incentivizing roof owners
  • Allowance for right technology
  • Bankers’ confidence
  • Roof Survey & Analysis
  • Civil / Structural Design
  • Right technology choice
  • Power Output / Monitoring
slide13

Policy…Setting a level playing field

  • Credibility of a Long Term Program
  • Certainty of a credible YOY GBI
  • RPO Obligations enforced thro’ to the States
  • REC mechanism – another progressive step
  • Large Enough Program to Attract Serious Investors
  • Solar cities in smaller towns looks viable
  • Focus on Credible Projects
  • Adequate Filters & Penalties in Selection Criteria
  • Ensuring Project Developers Adhere to Milestones
  • Framework for Honoring Commitment - Escrows
  • Innovation & Manufacturing
  • R&D Incentives for Emerging Technology & Cost
  • “Indianization” of technology for Indian roofs
  • Economies thro’ Scale & Localization
  • Inclusive Framework for Towns and villages alike
slide14

“To get to the goalpost is not good enough”

  • Drive cost of Solar Energy to competitive levels
  • Bankable PPA or alternate models
  • Adequate performance measures
  • Making right technology credible and available
  • Give it some firm policy impetus to reach

the GOAL of “TAKE-OFF”

A Holistic fitment

The only missing link today

slide15

About Us

‘Mahindra Solar’, is at the forefront of solar revolution in India. Backed with innovative and cost-effective solution for rooftops and captive power plants, we are empowering commercial organizations and telecom towers to reduce their cost through diesel savings. In 2011, we received the highest CRISIL-MNRE rating of SP1A for off-grid solar PV system integration.

15

slide16

Our Milestone Projects

MAHINDRA WORLD CITY, CHENNAI

ENERGY & NATURAL RESOURCES

MMDC, NASIK

Mahindra Confidential - Internal Use only

slide17

Our Milestone Projects

MAHINDRA REVA CARPORT, BANGALORE

ENERGY & NATURAL RESOURCES

Mahindra Confidential - Internal Use only

slide18

Our Milestone Projects

MAHINDRA REVA PETAL TYPE STRUCTURE, BANGALORE

ENERGY & NATURAL RESOURCES

Mahindra Confidential - Internal Use only

slide19

Our Milestone Projects

NSPCL 130kW PROJECT, BHILAI

JABIL SINGLE AXIS TRACKER, PUNE

ENERGY & NATURAL RESOURCES

Mahindra Confidential - Internal Use only