State of Indian Solar Manufacturing

The Indian solar manufacturing industry is a heavily fragmented and uncompetitive one. Its costs and price are typically 15-20% more than the imported Chinese solar panels. The only reason why producers are afloat is because of the DCR (domestic content requirement) in some of the government tenders. While the cell capacity also exists, there are onlye 2-3 producers of those and they also run due to the government’s protectionist policies. The Indian government and industry has failed to create a vibrant industry, despite strong dometic demand and a long history of solar manufacturing in the country (Webel, Tata BP Solar etc.).

While MNRE shows that the current capacity of solar panels is 5000 MW and a leader of an industry group claims that it will increase to 10000 MW, what will be the use of these panels. A recent report shows that India imported 75% of solar panels last year from China alone. Another 10-15% would be imported from countries such as Malaysia, Taiwan, USA which would mean that Indian players would be making around 500 MW of solar panels, which implies a factory utilization for the overall sector at just around 10%.

Also read Is India’s Solar Industry moving to a Fixed Tariff model from Reverse Auction tenders?

Increasing the capacity to 10000 MW would not make sense, given that most of the capacity is lying unutilized. I would suspect that a large portion of the current 5000 MW capacity is junk and obsolete. Creating more capacity does not make sense unless the Indian players can be cost and technologically competitive. While the new plant made by Adani of around 1.2 GW makes sense from the scale perspective, most of the other Indian solar power plants are just 50-100 MW in size which makes them completely useless in being sustainable over the long term.

Mr. Saluja from SEEMAT has boldly said that capacity would double. Yes it could but what is the value addition to the Indian economy or the players themselves. Yes the demand in the Indian market is there, but can the Indian players even hope to be compettivie to serve the Indian demand. The Chinese companies are already selling solar panels at 40 cents/watt and might go lower, if the overcapacity persists.The  Indian companies do not have a snowball’s chance in hell of selling these panels at those prices. Even Mr Saluja’s company makes a pathetic 100 MW of solar panels and 50 MW of cells. This makes no sense from a scale perspective. Large Chinese companies have a capacity of around 4000-5000 MW and are still fighting to make decent margins.

The government is also sitting on its ass not announcing its “integrated solar manufacturing policy” which has been in the works for a long time. Time is of essence, if India needs to become a manufacturing power and dilly dallying on a crucial industry does not inspire confidence

India is also likely to double its module and cells manufacturing capacity to 10,000 MW and 2,000 MW in the next couple of years. However, “lack of easy and cheap funding, expectations of a high GST rate and increasing cheap imports from China and Taiwan is hurting the domestic industry,” said Singh.

Source

100 MW Solar Power Plant by TATA

A 100 MW solar plant have been commissioned by Tata Power Solar in Anantapur, Andhra Pradesh. It is India’s largest solar plant commissioned till date, using solar cells and modules manufactured in India itself. This plant is expected to offset 110,000 tons of Co2 in the first year itself and will produce 160 million units of energy annually thereafter.

Read more about Solar Power plants in India.

Not only has this plant built a record of being the largest plant in India so far and using domestically manufactured components, but also being completed 3 months ahead of its stipulated timeline.

Tata Power Solar has over 25 years of experience in manufacturing and EPC services and have built over 250 MW of utility scale projects across 13 states in India. This plant was built for NTPC and also provided employment opportunities for more than 50 local people in that area. NTPC has a target of adding about 1,000 MW through renewable resources by 2017. Anantapur is the largest district of AP getting the lowest rainfalls in India. The company has already done more than 90 solar installations (including solar water pumps) in this district, generating more than 800 kWh of energy per day.

Also read about the largest solar farms across the globe here.

Some of NTPC’s solar projects already commissioned in India:

A.K. Jha, director technical, NTPC said, “Given our ambitious target for green power, we were aware that our requirement of rigorous timelines and cost-efficiency was a challenging one.”

Source: Economic Times

Tata Solar Power projects in India

Other popular Tata Solar projects in India are:

• 50 MW solar power project for NTPC in Rajgarh, Madhya Pradesh
• 17 MW solar plant in Mithapur, Gujarat
• 10 MW plant in Chitradurga, Karnataka
• 5.75 MW plant in Naini, Uttar Pradesh
• 3 MW plant while maintaining the aesthetics of Mulshi, Maharashtra
• 2 MW solar plant in Saraikela, Jharkhand

The 50 MW NTPC, Rajgarh plant, has shown a performance ratio of 86% in the one year of operation more than 10% higher than the 74% generation target. All of Tata Power Solar’s solar plants maintain an uptime of 99.6% minimum. Given the company’s experience in this field, it has a lot of government and corporate clients. Tata Power Solar has already built more than 250 MW of projects for these clients, with more than 500 MW under construction.

Fixed Tariff model for India’s Solar industry

Indian solar sector has seen a huge amount of success using the reverse auction tender method, which has led to massive competition amongst solar developers and discovery of declining prices for solar power. Unlike other countries, India has not been burdened with high subsidies that need to be paid for green power. However, this method has been criticized by solar developers for having shortcomings.

Some of these are that non-serious bidders have entered the space and bid irrationally low. This might lead to problems later on if these projects are not built, or some of these developers using low quality components might fail going forward. As the sector has matured and prices have become sufficiently low, the government is examining a new method to grow the solar power capacity in the country in a stable and a predictable manner, which will allow the private sector to earn reasonable returns and also let the government meet its ambitious target of putting up 100 GW of solar capacity by 2022.

NTPC which has been used by the government as one of the main procurers of solar power has been mulling a new model to buy solar power for its next phase of 5 GW of solar energy procurement. Earlier NTPC had been buying solar power through reverse auctions and selling it to discoms by bundling non-committed cheap thermal power from the central pool. However, solar power has not become cheap enough for it to sell, without bundling with thermal power. NTPC might now use a new method where it will set a reference price of 7 cents/kWh for buying solar power. Bidders may bid for a discount or a premium and win the tender for selling to NTPC. This is similar to the SECI method which has a VGF instead of a tariff.

This INR 4.5/kWh will set a reference price for the country and many state governments may follow a similar method of procuring solar power going forward. Given a more stable and consistent regulatory regime will allow most solar power developers to bid in a planned manner. This will ensure a greater success rate of tenders.

Currently India has bid out 20 GW of solar tenders, out of which more than 8GW of capacity has signed PPAs in place. This rapid rate of tendering is expected to continue in the future, given the government’s strong focus on increasing the solar capacity. However, as the industry matures alternative models should be examined for selection of solar developers.

India Solar Energy Zones

The Indian government has been coming up with a number of policies and initiatives to boost the solar energy capacity in the country. While some have succeeded (reverse auction tenders for grid utility projects) some have failed such as the promotion of rooftop solar through subsidies. The super large solar power plant of 4000-5000 MW capacity known as solar UMPPs have also proven to be a non-starter. The government now has come up with a new plan to substantially accelerate the adoption of solar power in India. This will be done through “Solar Zones,” which will be super large areas of 25,000 acres in size each. The states will have to earmark such area out of wasteland or fallow land lying unused.

Key highlights of Solar Zones:

1) Transmission lines to be built at multiple points in these zones to connect the main transmission network of the country. Note the lack of transmission is the biggest hurdle facing large solar power plants and solar parks in remote areas from getting operationalized. Once a transmission connectivity is there, then it will be easy for developer to build solar projects. Developers will not have to build a transmission line of more than 25 kms

2) 25% of the area will be earmarked for the manufacturing of solar products such as ingots, wafers, cells and panels

4) 50% of the area will be allowed for large grid scale utility projects from large project developers and investors. This implies an area of around 12500 acres, which will be enough to develop around 2.5 GW of solar capacity

California Solar Energy Zone

6) The solar zone much have contiguous land (or near to it) and should have a radiation of at least 4 kWh/sq. metre ( 1460 kWh/year)

8) Biggest difference between solar park and solar zone is that the Indian government will only facilitate the acquisition of land, but will not acquire it