India launched its Solar Mission by the name of Jawaharlal Nehru National Solar Mission (JNNSM) with a lofty target of 20 GW by 2022.The Solar Mission has been divided into 3 phases and promotes solar energy installation,solar industry,solar heaters and off grid solar.Note the Solar Mission provides subsidies and incentives to promote the use of Solar Energy from the Central Government.Different States such as Gujarat have enacted laws to support solar energy on their own which is separate from the Federal Target for Solar Power.I think the 20 GW target for 2022 is very low and will be easily exceeded but that is a separate discussion.The Solar Mission is not a rigid document but is a work in motion as the second and third phases will be implemented taking in the feedback and success of the first phase of the Solar Mission which has already announced the Solar Project Winners.

Objectives of the Solar Mission in India

1) Solar Lighting-Deploy 20 million solar lighting systems for rural areas

2) Solar Heaters – Achieve 15 million sq. meters  by 2017 & 20 million by -2022 of solar thermal collector area

3) Solar Manufacturing – Global Leader in Solar Manufacturing ( Seems a Pipe Dream right now) with Targets 4-5 GW equivalent of installed capacity by 2020 including setting up of dedicated manufacturing capacities for poly silicon material to annually make about 2 GW capacity of solar cells

4) Off Grid Solar Applications – Solar Mission has set a target of 1000 MW by 2017

Three Phases of JNNSM

First Phase

1) First Phase (How it has fared so far)

Smaller 2 MW PV Projects

India has set a target of 1100 MW for the first phase with around 100 MW allocated for 2 MW projects which have the best chance of being built.Note the 2 MW project winners are already flipping the projects as many non-serious players won the projects.These companies were speculators and has no intention of building the plants anyway

Migration Projects

It has also allowed 80 MW projects to be transferred to JNNSM rate which has led to strong state objections.The State nodal agencies have also started objecting to the tariff policy as 80 MW of Solar Projects were awarded the base FIT of Rs 17.91 as they were transferred to the Indian Federal Subsidy from their initial PPAs with individual states.Note these solar project developers who have managed to get transferred will get tariffs which are almost 60% higher than the lowest bidder for the 5 MW Solar Project at Rs 10.95.This will also mean a much large taxpayer outgo to the 16 Project Winners for the 80 MW than for the 150 MW projects

Larger PV 5 Projects and Bigger Solar Thermal Plants

The rest of the 620 MW projects are in serious trouble with no major construction happening.The developers might find it profitable to lose their deposit money rather than building the plant.The government will have to potentially bailout these companies if it wants to see its Solar Mission be successful.While the first phase is already in trouble the government is already thinking of auctioning another 296 MW of solar projects in April.Don’t know how that will help as the majority of the First Phase projects are already in trouble

2) Phase II (2013-2017) – Remaining 4 yrs of 12th five yr plan Target of 3000-10000 MW
3) Phase III (2017-2022) – 13th five yr plan 20000 GW overall

Funding of Solar Mission and Role of CERC and NVVN

In order to facilitate grid connected solar power generation in the first phase, a mechanism of “bundling” relatively
expensive solar power with power from the unallocated quota of the Government of India (Ministry of Power) generated
at NTPC coal based stations, which is relatively cheaper, has been proposed by the Mission. This “bundled power”
would be sold to the Distribution Utilities at the Central Electricity Regulatory Commission (CERC) determined prices.
The Mission also provides for NTPC’s Vidyut Vyapar Nigam Ltd or NVVN to be the designated Nodal Agency for
procuring the solar power by entering into a Power Purchase Agreement or PPA with Solar Power Generation Project
Developers who will be setting up Solar Projects during the next three years, i.e., before March 2013 and are connected
to the grid at a voltage level of 33 kV and above. For each MW of installed capacity of solar power for which a PPA is
signed by NVVN, the Ministry of Power (MoP) shall allocate to NVVN an equivalent amount of MW capacity from the
unallocated quota of NTPC coal based stations and NVVN will supply this “bundled” power to the Distribution Utilities.
This Scheme is referred to as the ‘Bundling Scheme’ in these guidelines. – Source MNRE

Solar Manufacturing

Targets 4-5 GW of capacity by 2020 by setting up of dedicated manufacturing capacities with 2 GW of Solar Cells.Manufacturing to get incentives like Zero import duty on capital equipment,Low interest rate loans,Incentives under Special Incentive Package.The JNNSM also hopes to promote of Solar Thermal Technology through setting up of  2-3 large solar manufacturing tech parks.

Solar Research and Development

• National Centre of Excellence (NCE) to be established
• Research Council to be set for Guidance
• 50 startups to be funded to develop solar related technologies
• Government Fellowship program to train 100 scientists
• Ultimate Aim to reduce solar costs and BOS costs to achieve grid parity

Solar Heater Incentives

Off Grid Solar Subsidies

The main objectives of this section of the scheme are:

1. To promote off-grid applications for meeting the targets set in the JNNSM.
2. To create awareness about the usage of solar systems
3. To encourage and promote sustainable business models
4. To support channel partners and potential beneficiaries
5. To organize consultancy services and seminars, awareness campaigns
6. To help replace kerosene and diesel, wherever possible

1. For off-grid  Solar PV Installations of a maximum capacity of 100 kW per site, and for mini-grids for remote electrification with a maximum capacity of up to 250 kW the subsidies are as follows
2. Subsidy, which is calculated on the basis of a cost benchmarked by MNRE, is notionally equal to 30% of benchmarked cost of solar power systems. For 2010 it is fixed at Rs. 90 per Wp with battery storage, and at around Rs. 70 per Wp without battery storage. These subsidies will be changed every year.
3. Solar PV plants in micro-grid mode/local distribution network, to meet unmet community demand for power in unelectrified rural areas, will be provided a capital subsidy of Rs 150/watt  In special category states of North East Inida, Sikkim, Himachal Pradesh, and Uttarakhand, a capital subsidy of  90% of installation cost .In Border areas and islands like  Lakshadweep, Andaman and Nicobar Islands  the subsidy availed will also be 90% for solar PV installations.Note soft loans of 5% interest rate can also be availed.

Role of Different Entities in the Solar Power Mission

1. RESCOs (renewable energy service providing companies): These companies install, own and operate the renewable energy systems.
2. Financial and Microfinance institutions: These institutions are mainly into providing loans to the consumer and accessing the interest subsidies through refinancing
3. Financial Integrators: These firms serve the manufactures and service providers by integrating different sources of finance available for them.
4. System Integrators: These entities are the ones which provide design, supply, integration and installation and O&M to the clients.
5. Program Administrators: Administrators include central and state ministries and departments, state nodal agencies, utilities, PSUs and reputed NGOs. These bodies are responsible for implementing the scheme.