Buyer’s Remorse – Falling Solar Prices Make Indian Utilities Reduce PPA From 25 Years To 1 Year

23 May, 2017 by Sneha Shah

Plight of Indian Discoms

Solar prices have been crashing at an astounding rate with each new tender leading to a new lower solar price. Last year the price of INR 5/kWh was considered as a crazy irrational price by Sky Power which would have resulted in a stranded asset. Move a year forward and even the price of INR 2.44/kWh which was bid for a recent solar utility project in the desert state of Rajasthan seems viable, though still a bit risky. The buyers of power discoms are all in a tizzy right now. If a utility had waited for a year, it would have seen its buying price cut in half leading to savings for hundreds of crores of rupees over the PPA life of 25 years which is the norm for the power industry.

Even the recent REWA tender where the levelized price of INR 3.3/kWh was discovered seems exceptionally high as compared to the INR 2.44/kWh prices. Falling solar equipment prices and low interest rates have been the two main factors behind this fall in price.

Distribution utilities in India are now facing a serious case of buyer’s remorse as they worry that they have paid too much for the power bought earlier. Now they are rethinking their entire buying process with most of the utilities completely halting signing of new PPAs, as they clarify their new process. Discoms are mulling that they scrap the 25-year power purchase agreement with power sellers in which a fixed price of power is contracted over the course of the asset life. This will be done in order to ensure that the power contracts do not become a huge burden on the discoms. Already some of the Gujarat utilities which contracted PPAs with solar power plans at INR 15/kWh in 2012 are facing serious financial troubles. They have gone to court to nullify these PPAs but have been thrown out as they are legally binding contracts.

Power sellers, on the other hand, will have to think how they will manage the short-term PPAs as they cannot sustain the business on just one year visibility. They would need to consider the whole life of the asset which is around 30 years. With solar equipment prices falling, their plants may become unviable in 3-4 years which could lead to huge losses. They would only invest if they managed to get at least the assurance of capital returns of their assets.

In another setback for power plants languishing without long-term buyers, the Yogi Adityanath-led Uttar Pradesh government has cancelled the bids conducted in 2016 to procure 3,800 MW of power from independent power producers. The decision, according to sources, was taken after the central power ministry and Uttar Pradesh Power Corporation (UPPCL) observed that adequate electricity will be available in the state between FY18 and FY22.

About 33,000 MW of thermal power plants, with an approximate investment of about Rs 2 lakh crore, are left stranded across the country due to the lack of PPAs. The low tariffs discovered in the Uttar Pradesh reverse auction were the result of aggressive bidding by power companies, experts said.

Source: Financial Express

India Becomes a Solar Inspiration For Many Developing Economies

15 May, 2017 by Sneha Shah

India,Solar Energy

Solar Prices Keep Falling in India

India has done it yet again! In the latest bid for building a 500MW in Rajasthan’s Bhadla solar park, Acme Solar Holdings Pvt. Ltd (for 200MW) and SBG Cleantech Ltd (for 300MW) placed winning bids of INR 2.44/ kWh and INR 2.44/kWh respectively. The other close bids were priced at INR 2.46 per kWh and INR 2.47 per kWh by Hero Solar Energy and ReNew Solar Power respectively. In all, there were 24 bids for the 500MW capacity build-up.

This comes after Phelan Energy and Avaada Power quoted prices as low as INR 2.62/ kWh in a bid for Adani Power’s 250MW solar plant in also Bhadla solar park. The continuously falling solar prices have made it possible to generate electricity from solar energy at 18% lower prices than the average price for electricity generated by coal-fired plants. It is now cheaper to construct a solar plant than constructing a coal plant in India.

India is set to become the third biggest solar market in the world in 2017 with an increase of 76% in capacity. Prices of solar components like inverters and modules have fallen by more than 25% in the last year itself. Indian solar prices have fallen by more than 12% in the last three months itself.

Read List of 8 Largest Solar Farms Around the World

Not only India but many parts of the world are a part of the renewable energy revolution. Recently Origin and Goldwind set a new low for Australian wind prices at about $55/MWh for the 530MW Stockyard Hill wind project in Victoria.

India energy minister Piyush Goyal predicts thermal coal imports will fall to zero within the next few years. Now India’s ambitious renewable energy target by 2022 does not seem too far. For a 100% rural electrification, using renewable sources of energy looks highly likely and falling prices in this regard should go a long way in boosting the adoption.

India which was a coal-dependent nation just a few years ago has seamlessly been transforming into a renewable-focused country. This should be an inspiration to small and developing nations. Even though there is a concern about the competitiveness of solar plants bid at such lower prices, this has not stopped the developers from being aggressive. Currently, India generates more than 60% of its total electricity from coal and gas-fuelled plants, while only about 18% is from renewable energy sources. However, this percentage is set to change soon.

Indian Solar Price Falls To Just INR 2.62/kWh (4 cents)

10 May, 2017 by Sneha Shah

India,Solar Energy

Solar becomes Power King Displacing Coal

Indian solar prices have been crashing to new lows driven by two main factors:

a) Falling solar panel prices due to a combination of Chinese overcapacity and rapid technological improvements

b) Falling interest rates in India with the 10 years government bond yield at multi-year lows of 6.25%

Other minor factors driving the low prices are the huge competition with a very large number of players looking to build their renewable energy portfolios in the Indian markets. International companies, private equity backed platforms, domestic conglomerates as well as major utilities are all fighting to get a slice of the pie.

But INR 2.62/kWh (USD 4 cents/kWh) was not expected by anyone in their wildest dreams this year. Even a year ago when someone bid INR 5.1/kWh, they were thought to be crazy and that the project would fail for sure. But the critics failed to notice the fact that solar prices were being bid even lower in other places in the world. In the Middle East and Mexico prices of 3-4 cents/kWh was being seen routinely. It is expected that a new Saudi solar auction tender could see prices go as low as 2 cents. So India at INR 2.62 or 4 cents is nothing out of the world!

Also read, Another Solar Auction in India leads to low developer interest and reasonable tariffs.

The INR 2.62 was bid by a South African group (Phelan) as well as Welspun Energy for building a solar plant in Rajasthan’s Bhadla solar park (Phase 3). There were other multiple bids below the 5 cents/kWh mark, which means that the bids were not irrational by the winners though they are risky in my view. Softbank just missed by 1 paisa.

However, the Indian market faces some unique challenges which are not that acute in the other places of the world. One is the poor finances of the buying distribution utilities who do not have the money to pay back the solar developers in time. The other is the power grid which is one of the weakest in the world. With more solar and wind power entering the grid in the coming years, this problem will become larger.

INR 2.62/kWh is truly a landmark price and announces solar as the king of the power sector in India displacing coal years in advance. New coal power plants cannot be built at less than INR 4/kWh and that too after years of construction and getting clearances from forest, land and environment departments. In contrast, a solar power plant can be put up in 3-6 months in deserts.

My heart would be having strong palpitations if I was the owner of a thermal or a gas power plant without a PPA. This means the end of the coal power development in India. While the intermittency will allow some of these plants to get built, I would be selling my coal, thermal power and related equipment stocks as fast as possible.

Also, read How Solar Industry Could See A Major Convulsive Shock At The End Of The Year.

7 Most Popular Solar Mobile Apps That You Must Have

8 Mar, 2017 by Guest

Solar Energy

Guest Post

Solar Mobile Apps

As you know that solar energy is the combination of light and heat that is produced by the sun. This energy moves from the sun and reaches the earth where human collects it through solar collectors and convert it into any desirable form of energy.

As per the assumption, this renewable source of energy is the most powerful to replace the requirement of electricity, which we get from 650 barrels of oil per year. In the recent times, the soaring interest in solar power is not only evident on roofs; but also through enormous ideas to power up almost every part of our lives.

You might also like Are You Looking for A Web Developer in India?

Let’s Have a Look at the Most Popular Solar Mobile Apps

1) EasySolar

EasySolar is the first PV design application, which is a fully functional extension of the EasySolar online platform. This is one of the most advanced mobile apps that will help you to work and manage sales wherever you are. Along with EasySolar app, the online platform enables users to perform following tasks:

Develop PV designs
Generate Price Quote
Develop Financial Analysis
Make Customer Proposal in pdf file.
Manage solar sales with mobile and colorful project management system.

Now, you can use the tablet or your smartphone to design PV system and manage your sales wherever you are. You can also boost your work performance and generate it in professional using the app.

2) Solar Measurement/ PyranometerApp

Now, you can easily turn your device into a pyranometer with this pyranometer application. This high-end and feature-rich application will allow you to measure solar radiation in Watt per square meter (W/m²).

The Pyranometer App 2.0 is a wonderful gadget for fun as well as educational purpose. A professional measurement of solar radiation can be performed by highly accurate thermopile pyranometers. These are the instruments that used for irradiance measurements in weather, solar energy, climate, and other fields related.

Offered free of cost by Hukseflux Thermal Sensors, the application can be used for educational purposes easily and without facing any kind of difficulties.

3) MySolarCity

Do you want to track your solar energy production from almost anywhere? MySolarCity application is the best and feature-rich mobile application that gives you the power with real-time mobile access to your solar monitoring.

Equipped with a comprehensive range of features, the app also enables you to share the excitement of clean, affordable energy with friends and relatives when you are on the go. If anyone signs up with SolarCity through your referral, you can get a reward for each person.

4) SunPower Monitoring System

With the advanced quality SunPower Monitoring System application, you can easily keep track of your solar system performance anytime and anywhere. The application gives you the detailed visibility into how much energy your system produces, allowing you to optimize your solar investment and save on energy expenses.

You can view different options, including day, month, year, system, lifetime or custom date range. Customers with a Consumption Monitoring Kit can also check their Bill savings and Energy Mix. You can easily sign-in with your existing web credentials or register your SunPower Monitoring System account.

5) Solar Calculator

When it comes to talking about the Solar Calculator, it is an application that can be used easily to calculate and tell you several wattages used on a daily and weekly basis. The application also gives you a breakdown of the amount of equipment’s that required to get the system up and running.

These comprise some other solar panels, batteries, inverters, etc. This application is very simple and easy-to-use; therefore, you can get calculating and planning a lot easily.

6) Solar Shading

For solar panel installations, shading is a major concern that causes panel hot spots and diminishes the output of an array. The application allows you a photovoltaic installer/designer complete a solar shading analysis in just a couple of minutes.

Using this application, you can simply finish a 360-degree turn while tilting the phone to keep the top of any shading obstruction in the crosshairs. Moreover, the app uses your phone’s compass, GPS and accelerometer to map the horizon or obstructions.

Get a graphical representation of the sun path and a chart to see what percent of daily hours are lost per month and a kWh output graph.

7) Solar Mobile

Talking about the new Solar Mobile application, you are just one touch away from Solar.

The application enables you to scan barcodes. One click of the camera and the product is added to your cart. Access the web shop and more. Moreover, this high-end application purchase or view products and allows to access to order history and favorite products.

So, users can also get easy technical support on the go by direct email or phone. And locate the nearest solar drive-in and get driving instructions. Download this wonderful application and get huge support.

These are the top most popular solar applications that you can download in your device and enjoy a wide range of features. In the upcoming years, the demand of solar applications will keep increasing as maximum number of companies turn towards mobile apps to deliver their high-end services in an easy manner.

If you also own solar panels or are in some way involved in the solar industry, you will most likely notice solar technology more readily than others. You can also turn solar app idea into a successful application irrespective of the type and platform, you can discuss your requirements with an iPhone or a professional android app development company with specialized team of android developers.

About The Author: This Article is contributed by Mohd Sohel Ather, software engineer by profession and a content writer by passion. Technical writing and blogging are his hobbies. He currently writes for Mobile App Development.

Indian State Company BHEL Opens A Super Small Useless Solar Cell And Module Factory

13 Feb, 2017 by Sneha Shah

Coal,India,Solar Energy

Another small Solar Cell And Module Factory in India

Indian solar manufacturing has been in a woeful state thanks to the fragmented nature of its capacity with almost a hundred companies owning a combined 5000 MW of capacity. Compare this with global giants like Trina Solar and Jinko Solar which alone have a capacity of 5000 MW. This small scale capacity makes most of the Indian companies unable to compete as they are not economically viable. They do not have the scale in marketing or manufacturing which would allow them to amortize costs over a larger revenue base. The solar cell and panel production industry is a heavily competitive one with even the largest solar companies making wafer thin margins. You need to be absolutely cost efficienct in all your operations in order to compete.

A Solar Factory In India

To add to the existing non-competitive capacity, state owned company BHEL has also opened another useless small factory with 200 MW module and 105 MW cell capacity. These capacities are simply not economically viable and make little sense. The company had as far back as 2014 announced plans to open an integrated 500 MW line, but instead it has opened a tiny little factory in Bangalore. The state run companies in India have little strategic or operational sense. They are run by managers who have little accountability towards shareholders and stay in office at the whims of their political masters. Except for monopolies, most of the Indian government companies are loss making. They are huge destroyers of value and waste massive amounts of money which could be better used to alleviate poverty.

You might also like Coal India wants to build 1000 MW Solar Power Plants but why?

BHEL is primarily a maker of equipment for coal run thermal power plants and has been facing a tough time due to thermal power overcapacity in the country. This state run behemoth faces a bleak future with solar energy expected to overtake coal energy soon. Opening a tiny factory is not going to help BHEL be a material player in this space. There are already tens of factories of similar capacity and technology running in the country. Why add another one to the glut. If it wanted to create something of value it should have built a reasonably economically viable factory. Adani has built a 1000 MW plus cell and module factory and even that is in trouble due to lower end product prices.

Also read India Does Not Need Any New Coal Power Over Next 5 Years

7 Cents Solar Plus Storage Price By 2022 Could Bankrupt Most Indian Power Utilities

1 Feb, 2017 by Sneha Shah

Solar Energy

Solar+Storage Set to explode in India

The capital costs for building a solar power plant is the cheapest in the world thanks to very low labor construction costs as well as super cheap Chinese imports of solar panels which makes up 60% of a solar power plant cost. While solar power prices have fallen to nearly INR 4/kWh, which is around 6 cents/kWh, the power utilities are still feeling secure given that solar remains an intermittent source and rooftop solar has not really taken off due to on the ground red tape in getting approvals for net metering.

However, things could take a drastic turn with storage entering the picture in a big way. Tesla has recently started production at its Gigafactory in USA and plans to reduce costs of lithium ion batteries by nearly 40% in the next 3-4 years. Other battery players will also get in, given that the technology is not restricted to the Panasonic Tesla combine. I soon expect similar gigafactories to be built in China and costs to plummet given the past track record of Chinese manufacturing. While these factories are primarily making batteries for electric cards, they will also be used for stationary storage applications.

Rooftop solar energy which is already cheaper than grid in a large number of places in India could soon see its biggest barriers dissolve as homeowners could simply switch off the grid at INR 5/kWh price (7 cents). Most of India’s urban consumers which accounts of a majority of power utility revenues pay around INR 6-10/kWh plus various associated duties and taxes. With power prices only going to increase, this means there will be a big differential between the grid price and the solar + storage price. In fact, utilities might go into a “death spiral” much before as the highest tariff paying customers will switch out much faster. Some commercial and industrial consumers pay horrendously high prices and they are already using solar power energy provided by private generators and electricity providers.

Solar energy has already reached grid parity along with wind power energy in India, with prices ranging around 6 cents/kWh. New thermal power plants are in the same range if not higher priced, while gas is out of the picture. Building nuclear and hydro plants not only takes a lot of time but causes a lot of environmental issues. This makes solar energy not only great from India’s climate change commitment perspective but also from the cost perspective.

While regulated utilities may get along for a while as the state government and regulators increase tariffs, the biggest risk will be for private utilities. Even their long term power purchase agreements will not be of much help given that if the prices become too high compared to the solar price at that point of time, the purchasing entity might go bankrupt or just renege on the long term contract.

I would be a very scared investor of a power utility given the inevitable march of renewable energy. More specifically if you are an investor in CESC or any of the private utilities better sell out your shares now and look for “greener” pastures.

Page 14 of 102

1st

...

← 10 11 12 13 14 15 16 17 18 →

...

Last