6.1.1 Market Overview

Solar power is a non-continuous source of generation. The average capacity factor for solar utility

scale non-tracking solar power plants ranges from 20% to 24%. For utility scale power projects, there

are no energy storage solutions available as of today. Also, solar power poses challenges in load

scheduling on account of effect of seasonal factors like cloud covers and rain. Due to this inherent

variability, the impact on grid from large-scale solar parks becomes intensified as compared to

individual medium scale solar power projects.

The new government had made its intentions clear that it wants India to be among the top solar

markets in the world by announcing a revised solar target of 100 GW from the planned 20 GW solar

power by 2022 under Jawaharlal Nehru National Solar Mission. The government officially approved

the capacity target after a meeting of India’s Union cabinet, chaired by the Prime Minister Narendra

Modi.

The emphasis on addition of solar capacity is also evident from its major share of almost 57% (100

GW) out of the proposed 175 GW of renewable energy. The drastic fall in solar power costs from Rs.

20 per unit to nearly Rs. 5.5 per unit in the span of a few years has prompted the government to

carve out such an ambitious target. The target has been split into 60 GW of large and medium scale

Grid connected solar power projects and 40 GW rooftop projects. This is expected to require an

investment of around INR 6000 billion along with conducive policies, effective deployment

mechanisms by implementing agencies and favourable support from financial institutions. In

addition, it is expected to boost the indigenous manufacturing industry as well as create large

number of jobs to meet the target.

India already has 4096 MW of installed grid-connected solar PV generation capacity. Out of which,

almost 3740 MW are ground mounted power projects and 356 MW are rooftop power projects.

Although the installed capacity has grown at around 229% CAGR over a period of four years owing to

falling module prices, the government’s introduction of the Jawaharlal Nehru National Solar Mission

(JNNSM) scheme and various state policies, giving momentum for incremental development of solar

power. Still, the capacity addition target of 2200 MW of JNNSM Phase I was not achieved. The sector

has been fraught with challenges as land acquisition, delay in policy level and financial clearance, lack

of enforcement of Renewable Purchase Obligations (RPO) by state nodal agencies, poor financial

health of DISCOMS and higher per unit cost of power. www. solar quarter.com

6.1.2 Present Market Scenario (Current Projects, Key Competitors and Players in the region)

Identify top three solar parks of the world and India

Top 3 Solar parks in India

1. Charanka Solar Park

The largest site within the Gujarat Solar Park is being built on a 2,000-hectare (4,900-acre) plot of

land near Charanka village in Patan district, northern Gujarat. This hosts about 19 different projects

by different developers. On 19 April 2012, a total of 214 megawatts (287,000 hp) had been

commissioned. It also became the world's second largest photovoltaic power station. When fully

built out, the Charanka Solar Park will host 500 MW of solar power systems using state-of-the-art

thin-film photovoltaic (PV) power systems. The investment cost for the Charanka solar park amounts

to some US$280 million. Construction began on 3 December 2010.

2. The Welspun Solar project, set up at a cost of Rs. 1,100 crore on 305 hectares of land, will supply

power at Rs. 8.05 a kWh. The project of a 130MW solar power plant at Bhagwanpur in Neemuch MP.

3. Dhirubhai Ambani Solar Park

The Dhirubhai Ambani Solar Park at Dhursar village near Pokhran in the Jaisalmer district of

Rajasthan is a 40-megawatt (MWAC) photovoltaic power station commissioned in 2012. It is one of a

large number of solar parks expected to be built in a 35,000 km2 area of the Thar Desert that has

been reserved for solar power projects. The solar park was named after the late Dhirubhai Ambani,

the founder of Reliance Industries, and was constructed using 500,000 CdTe-modules by First Solar,

and covers an area of 350 acres (140 ha).

Top 3 Solar parks in the world

1. Topaz, California. MidAmerican Solar. Capacity: 580 MW. (which solar technology is used)In

December, the final 40-megawatt phase of the Topaz solar farm went online in California, making it

the first solar plant in the United States to be over 500 megawatts. The 580-MW facility, located on

the Carrizo Plain of San Luis Obispo County, took two years to build and cost $2.5 billion. Its 9 million

solar panels, spread across 9.5 square miles, will power 160,000 homes and supply most of the

electricity for the city of San Luis Obispo, population 276,000.

2. Solar Star, California. MidAmerican Solar, SunPower Corp. Capacity: (which solar technology is

used)579 MW. Construction of the Solar Star Projects, located in Kern and Los Angeles Counties,

started in 2013 and is expected to be finished this year. When complete, the facility will have over 1.7

million solar panels. It already delivers over 170 megawatts to the California grid.

3. Ivanpah, California. NRG Energy, BrightSource Energy, Google.(include some info on , if it is

storing energy!)Capacity: 392 MW. Opened nearly a year ago, the Ivanpah Solar Solar Electric

Generating System stretches five square miles across the Mojave Desert close to the Nevada border.

The plant employs about 300,000 mirrors that are used to direct sunlight onto three “boiler towers”.

The facility produces enough energy to power 140,000 homes.

Wikipedia

Compare their top ten features like % of solar, wind, biomass, type of technology, efficiencies, etc

on a graph for easy understanding.

Technological comparison for Solar Thermals

CSP TechnologyParabolic Solar

Parabolic Dish Linear FresnelTrough Tower

Capacity Utilisation Factor20-25% 40-45% N.A N.A

(CUF) (%)

Water requirement2.9-3.5 2.9-3.5 Nil 2.8

(cubic meter per MWh)

Operating temperature (°C) 300-400 500-1500 750 250-300

Typical capacity (MW) 10-200 10-150 0.01-0.04 1-200

Maturity of technology Commercially Pilot commercial Demonstrated Pilot projects

proven projects projects

Insolation enhancement (%) 30-40 60-70 60-70 30-40

Annual solar-to-electricity11-16 7-20 12-25 13

efficiency (net) (%)

Source: EAI, Indian Institute of

Science

No of developmental solar park projects in the world and India

Developmental solar park projects in the world and India

Solar Thermal Power Stations under construction

Capacity

MWName Country Location

Co-

ordinates

Expected

completio

n

Technolog

yNotes

1,021 Miraah

OmanAmal

parabolic

trough

200 Noor II

Morocc

o

Ghassate(Ouarzaz

ate province)

2017/201

8

parabolic

trough

121

Ashalim

power

station1

Israel

Negev desert 30°58 N′

34°42 E′2017

solar

power

tower

110

Cerro

Dominador

Solar

Thermal

Plant(Ataca

ma 1)

Chile

María Elena,

Antofagasta 2018

solar

power

tower

100

Redstone

Solar

Thermal

Power

South

Africa

Northern Cape 28°17 53′″S 23°21 56″E′

2018

solar

power

tower

with 12h

heat

storage

100Xina Solar

One

South

Africa

Northern Cape28°53 40′

.56″S

19°35 53.52″E′

2016parabolic

trough

with 5h

heat

storage

100 Ilanga 1

South

Africa

Northern

Cape(Upington)

28°29 25′.79″S

21°32 27.13″E′

2017

linear

Fresnel

technology

with 4.5h

heat

storage

100El Reboso

2+3

Spain

El Puebla del

Rio(Seville)2015

parabolic

trough

100 Dhursar India

2014fresnel

reflector

100 Diwakar India

Askandra 2014parabolic

trough

with 3h

heat

storage

100

KVK Energy

Solar

Project

India

Askandra 2014parabolic

trough

with 4h

heat

storage

100 Noor III

Morocc

o

Ghassate,

Ouarzazate

Province

2017/201

8

solar

power

tower

50Arenales

PS

Spain

Morón de la

Frontera(Seville)2013

parabolic

trough

50 Casablanca Spain

Casablanca 2013parabolic

trough

50

Erdos Solar

Power

Plant

China

Hanggin Banner 2013parabolic

trough

50Megha

Solar Plant

IndiaAnantapur 2013

parabolic

trough

44

Kogan

Creek Solar

Boost

Australi

a

Chinchilla 2015fresnel

reflector

27.5 Jinshawan China

China

solar

updraft

tower

Operations

underway

at 200 kW.

25Gujarat

Solar One

IndiaKutch

23°22.23

3 N′

70°41.988 E′

2013parabolic

trough

with 9h

heat

storage

17 Stillwater USA Nevada 2014parabolic

trough

12 Alba Nova1 France

Corsica July, 2015fresnel

reflector

First utility-

scale solar

thermal

plant in

France

5

Sundt

Power

Plant

USA Arizona 2014fresnel

reflector[

3

Airlight

Energy Ait

Baha Plant

Morocc

o

Ait Baha 2013parabolic

trough

with 12h

heat

storage

1.5

Tooele

Army

Depot

USA Tooele 2013 dish

1.4

THEMIS

Solar

Power

Tower

France

Pyrénées-

Orientales42°30 5″′

N 1°58 27″E′

solar

power

tower

Hybrid

solar/gas

power plant

1 e-Cube 1 China

Hainan 2013Modular

Heliostat

First

Modular

Heliostat

solar

thermal

plant in the

world

1 Renovalia Spain

Albacete dish

50

CGNSED

power

plant

China

Delingha 37°21 26′″N 97°16 18″E′

sep 2016parabolic

trough

https://en.wikipedia.org/wiki/List_of_solar_thermal_power_stations

6.1.3 Historic and future demand in the backdrop of government policy and socio economic and

environmental factors

The Rural Electrification Program of 2006 was the first step by the Indian Government in recognizing

the importance of solar power. It gave guidelines for the implementation of off-grid solar

applications. However, at this early stage, only 33.8MW (as on 14-2-2012) of capacity was installed

through this policy. This primarily included solar lanterns, solar pumps, home lighting systems, street

lighting systems and solar home systems. In 2007, as a next step, India introduced the Semiconductor

Policy to encourage the electronic and IT industries. This included the Silicon and PV manufacturing

industry as well. New manufacturers like Titan Energy Systems, Indo Solar Limited and KSK Surya

Photovoltaic Venture Private Limited took advantage of the Special Incentive Scheme included in this

policy and constructed plants for PV modules. This move helped the manufacturing industry to grow,

but a majority of the production was still being exported. There were no PV projects being developed

in India at that stage. There was also a need for a policy to incorporate solar power into the grid. The

Generation Based Incentive (GBI) scheme, announced in January 2008 was the first step by the

government to promote grid connected solar power plants. The scheme for the first time defined a

feed-in tariff (FIT) for solar power (a maximum of Rs. 15/kWh). Since the generation cost of solar

power was then still around Rs. 18/kWh, the tariff offered was unviable. Also, under the GBI scheme,

a developer could not install more than 5MW of solar power in India, which limited the returns from

scale. One of the main drawbacks of the GBI scheme was that it failed to incorporate the state

utilities and the government in the project development, leaving problems like land acquisitions and

grid availability unaddressed. As a result, despite the GBI scheme, installed capacity in India grew

only marginally to 6MW by 2009. In June 2008, the Indian government announced the National

Action Plan for Climate Change (NAPCC). A part of that plan was the National Solar Mission (NSM).

The NSM guidelines indicated that the government had improved on the shortcomings of the GBI

scheme. It aimed to develop a solar industry, which was commercially driven and based on a strong

domestic industry. The extra cost of generation of solar power was being borne by the federal

government under the GBI scheme. Even before the NSM, Gujarat was the first state to come up with

its own solar policy in January 2009. The Gujarat solar policy initiated a process of the states

formulating their own policy frameworks independent of the federal guidelines. The renewable

purchase obligations for state distribution companies, a demand-driven scheme, further accelerated

the formulation of solar policies at the state level. These policies exist independent of each other as

well as the NSM. One of the key novelties of the Gujarat policy was that it introduced the concept of

solar parks. These parks offered a comprehensive solution to concerns over land acquisition, grid

connectivity, and water availability, hence offering developers a project allocation packaged with the

necessary infrastructure. Other states like Karnataka, Andhra Pradesh and Rajasthan have followed

suit in developing solar power development programs. Rajasthan has implemented land banks as

well to make land acquisition easier. As more states plan to meet their solar power obligations, new

policies are expected to be offered, creating as very vibrant set of markets across the subcontinent.

http://indianpowersector.com/home/renewable-energy/solar_new/solar-power/

Present government policy on solar parks.

Central Government

The Electricity Act, June 2003

Sections 3(1)states that the Central Government shall, from time to time, prepare and publish

the National Electricity Policy and Tariff Policy, in consultation with the state governments and

authority for development of the power system based on optimal utilization of resources such

as coal, natural gas, nuclear substances or material, hydro and renewable sources of energy.

Section 4states that the Central Government shall, after consultation with the state

governments, prepare and notify a national policy, permitting stand-alone systems (including

those based on renewable sources of energy and other non-conventional sources of energy)

for rural areas.

Section 61(h & i) state that the appropriate commission shall, subject to the provision of this

Act, specify the terms and conditions for the determination of tariff, and in doing so, shall be

guided by the following, namely, the promotion of cogeneration and generation of electricity

from renewable sources of energy; and the National Electricity Policy and Tariff Policy.

Section 86(1)(e) Section 86(1) and 86(1)(e) state that the state commissions shall discharge the

following functions, namely, promote cogeneration and generation of electricity from

renewable sources of energy by providing, suitable measures for connectivity with the grid and

sale of electricity to any person, and also specify, for purchase of electricity from such sources,

a percentage of the total consumption of electricity in the area of a distribution license.

National Electricity Policy, Feb 2005

The National Electricity Policy 2005 stipulates that progressively the share of electricity from

non-conventional sources would need to be increased; such purchase by distribution

companies shall be through competitive bidding process; considering the fact that it will take

some time before non-conventional technologies compete, in terms of cost, with conventional

sources, the commission may determine an appropriate deferential in prices to promote these

technologies.

National Tariff Policy, Jan 2006

The Tariff Policy announced in January 2006 has the following provisions:

Pursuant to provisions of section 86 (1) (e) of the Act, the Appropriate Commission shall fix a

minimum percentage for purchase of energy from such sources taking into account availability

of such resources in the region and its impact on retail tariffs. Such percentages for purchase of

energy should be made applicable for the tariffs to be determined by the SERCs latest by April

01, 2006.

It will take some time before non-conventional technologies can compete with conventional

sources in terms of cost of electricity. Therefore, procurement by distribution companies shall

be done at preferential tariffs determined by the Appropriate Commission.

Such procurement by Distribution Licensees for future requirements shall be done, as far as

possible, through competitive bidding process under Section 63 of the Act within suppliers

offering energy from same type of non-conventional sources. In the long-term, these

technologies would need to compete with other sources in terms of full costs.

The Central Commission should lay down guidelines within three months for pricing non-firm

power, especially from non-conventional sources, to be followed in cases where such

procurement is not through competitive bidding.

National Rural Electrification Policy, 2006

Section 3.1 states “For villages/habitations where grid connectivity would not be feasible or not

cost effective, off-grid solutions based on stand-alone systems may be taken up for supply of

electricity. Where these also are not feasible and if only alternative is to use isolated lighting

technologies like solar photovoltaic, these may be adopted. However, such remote villages may

not be designated as electrified.

Renewable energy certificate mechanism, Jan 2010

Renewable Energy Certificate is a market based instrument which enables the obligated

entities to meet their Renewable Purchase Obligation (RPO). Pertinently, the renewable purchase

obligation is the obligation mandated by the State Electricity Regulatory Commission (SERC) under

the Electricity Act, to purchase a minimum level of renewable energy out of the total

consumption in the area of a distribution licensee. The REC mechanism also aims at encouraging

competition and eventually mainstreaming renewable energy sources.

RE generators will have two options – either to sell the renewable energy at preferential

tariff fixed by the concerned Electricity Regulatory Commission or to sell the electricity

component and environmental attributes separately

Voluntary Purchasers like NGOs, the Corporate Sector, and Individual Purchasers etc. may

also purchase REC in order to meet their Corporate Social Responsibility or to support the

environment.

https://www.recregistryindia.nic.in/pdf/REC_india.pdf

Ministry of NRE/concerned ministry policy on solar park development and their current

activities.

MNRE has plans to set up 25 solar parks, each with a capacity of 500 to 1000 MW; thereby targeting

around 20000 MW of solar power installed capacity. These solar parks will be put in place in a span

of 5 years and the solar projects may then come up as per demand and interest shown by

developers.

At the state level, the solar park will enable the states to bring in significant investment from project

developers, meet its Renewable Purchase Obligation (RPO) mandates and provide employment

opportunities to local population. The state will also reduce its carbon footprint by avoiding

emissions equivalent to the solar park’s installed capacity. Further, the state will also avoid procuring

expensive fossil fuels to power conventional power plants of equivalent installed capacity.

The solar park will provide a huge impetus to solar energy generation by acting as a flagship

demonstration facility to encourage project developers and investors, prompting additional projects

of similar nature, triggering economies of scale for cost-reductions, technical improvements and

achieving large scale reductions in GHG emissions. Some Ultra Mega projects may be set up in these

Parks or entire parts may be an Ultra Mega Power Projects.

Applicability: All the states and Union territories are eligible for benefits under the scheme.

Capacity: Park to be taken up for development should be of minimum capacity of 500 MW and a

maximum capacity of 1000 MW. Smaller parks of 100 MW and above may be considered in NE, HP,

Uttarakhand and J&K. Smaller parks of 100 MW and above may also be considered in UT’s and small

States with population less than 2 crores. Higher than 1000 MW capacity parks may also be

considered under special circumstances.

Implementation agency

The solar parks will be developed in collaboration with the State Governments. The implementation

agency would be Solar Energy Corporation of India (SECI) on behalf of Government of India (G0I).

SECI will handle funds to be made available under the scheme on behalf of GOI.

The states applying under the scheme will have to designate an agency for the development of solar

park. Solar parks are envisaged to be developed in the following modes:

i. The state designated nodal agency undertakes the development & management of the solar

park, under the general guidance and supervision of SECI.

ii. The Joint venture between state designated nodal agency and SECI undertakes the development

& management of solar park

iii. The state designates SECI as the nodal agency and SECI undertakes the development and

management of solar park on its own.

iv. Any of the above three alternatives with a private sector partner with a condition that at least

51% of the equity will remain with SECI+ State designated agency.

The implementation agency, as identified under provisions at (i) to (iv) above, shall undertake

following activities to achieve the objective of speedy establishment and implementation of Solar

Power Parks in the State.

i. Develop, plan, execute, implement, finance, operate and maintain the Solar Power Park

ii. Identify potential site and to acquire/possess land at potential sites for Solar Power Park

iii. Carry out site related studies/investigations

iv. Obtain statutory & non statutory clearances and to make area development plan within Solar

Power Park.

v. Design a plan for sharing development cost between the developers and the park

vi. Create necessary infrastructure like water, transmission lines, roads, drainage etc. to facilitate

Solar Power Project developer for faster implementation of Solar Power Projects

vii. Frame out transparent plot allotment policy and specify procedures pursuant to the relevant

State policies and their amendments thereof.

viii. Provide directives for technology-specific land requirements

ix. Engage the services of national/global experts/consultants to promote Solar Power Park

related activities

x. Facilitate the State Government to establish educational institutions/training facilities within

Solar Power Park for development of manpower skill related to Solar Power

xi. Any other activities related to Solar Power Park as per the directives from MNRE and the

State Government.

xii. Conduct the necessary evaluation and pre-permitting of the environmental and social

impacts of utility scale solar deployment before allocating the land to prospective developers

Land acquisition / site selection

Land for the setting up of the solar park will be identified by the State Government. It will be the

responsibility of the State Government to make the land available. States are encouraged to identify

sites receiving good solar radiation and sites which are closer to CTU (i.e. Power Grid), preferably

locations with spare solar installed capacity and water availability. The park must have at least 5

Acres per MW towards installation of solar projects.

In order to provide for such a large tract of contiguous land with appropriate insolation levels, the

state government may prioritize the use of government waste/non-agricultural land in order to

speed up the acquisition process. It will be preferred if most of the required land is Government

owned and very little private land is to be acquired. The price of the land is to be kept as low as

possible in order to attract the developers and, therefore, the site should be selected in such a

manner so that inexpensive land can be made available. If land cannot be made available in one

location, then land in few locations in close vicinity may be taken.

Facilities to be provided

The solar park will provide specialized services to incentivize private developers to invest in solar

energy in the park. These services while not being unique to the park, are provided in a central, one-

stop-shop, single window format, making it easier for investors to implement their projects within

the park in a significantly shorter period of time, as compared to projects outside the park which

would have to obtain these services individually.

The implementing agency is tasked with acquiring the land for the Park, cleaning it, leveling it and

allocating the plots for individual projects. Apart from this, the agency will also be entrusted with

providing the following facilities to the solar project developers for the development of the solar

park:

i. Land approved for installation of solar power plants and necessary permissions including change

of land use etc.

ii. Road connectivity to each plot of land

iii. Water availability for construction as well as running of power plants and demineralization plant

iv. Flood mitigation measures like flood discharge, internal drainage etc.

v. Construction power

vi. Telecommunication facilities

vii. Transmission facility consisting pooling station (with 400/220, 220/66 KV switchyard and

respective transformers) to allow connection of individual projects with pooling station

through a network of underground cables or overhead lines.

viii. Housing facility for basic manpower wherever possible

ix. Parking, Warehouse etc.

The solar park will be a large contiguous stretch of land with high insolation levels, saving the private

developer from making the effort of finding the ideal site for the plant. In addition, the site within

the park is already levelised and developed reducing these costs for the project developer.

In addition, the Park will provide road access (both approach roads and smaller access roads to

individual plots), water (via a dedicated reservoir located within the premises), boundary fence and

security, each of which would have entailed additional costs for the developer outside the park.

Each of these specialized services offer significant benefits to the developers but come at a premium.

Land plots within the solar park are more expensive than outside. But this premium is easily

justifiable by these services, which bundled into the land cost. However, the most important benefit

from the park for the private developer is the significant time saved. The centralized, single window

nature of the services within the park reduces the time between project conceptualization and

operations, translating into economic and real monetary gains for the private developers and the

state.

Financial model

The implementation agency, entrusted with implementing the program will get the land developed

and provide necessary infrastructure like road connectivity, transmission infrastructure etc.

Significant investments will also be made in the operation & maintenance of the solar park,

employing staff and other activities like marketing activities etc. The entire cost of development

including cost involved in acquisition of land will form the total cost for the project for which an

estimate will be prepared beforehand by the nodal agency. Based on this estimate the nodal agency

will formulate a recovery model to ensure the sustainability of the model. The nodal agency may

raise the funds as follows:

0 The implementation agency may sell/lease out the plots to prospective project developers.

The Allotment Price per metre square (inclusive of all applicable taxes, duties, cess etc.)

payable by the plot applicant for the applications must be specified beforehand. The

allotment price may be reviewed annually and an annual increment may also be specified.

The maximum stretch of plot to be allotted will be decided as per the benchmarks finalized

by the nodal agency.

0 A one-time registration fee (per project or per MW) may be collected by inviting applications

from the prospective buyers when the scheme is finalized, land identified and marked. An

advance may be collected from the prospective buyers when 50% of the land is acquired.

This advance will be 10% of the sale price. Another installment of 25% of the price of land

may be taken when full land is acquired. Further installments may be collected while plot are

being developed. Final 15% may be collected at the time of allotment of the plot to the

buyer.

0 The implementation agency may put in some of its own equity and can raise loans,

depending on the availability of funds and requirement. The subsidy of MNRE under the

scheme would bring down the cost of the project to that extent. The SPV will also create a

small corpus fund to ensure upkeep and maintenance in the future, which may be

supplemented with some annual charges.

mnre.gov.in

TN state NRE/concerned ministry policy and their current activities.

Tamil Nadu solar policy

The Tamil Nadu Solar Policy 2012 was announced in October 2012. The policy aims to achieve an

ambitious installation target of 3 GW by 2015. The policy aims to achieve this capacity addition from:

350 MW of rooftop installations, 1,500 MW of utility-scale projects and 1,150 MW of projects under

the REC mechanism.

In a first-of-its-kind state policy, Tamil Nadu will provide a Generation Based Incentive (GBI) for

rooftop solar power through net-metering in which power producers will have to install a separate

meter to measure power generation. A capacity of 50 MW is proposed to be added through this

process. The remaining 300 MW under the rooftop installations is expected to come from

government buildings and other government schemes for rural and urban lighting.

For a target of 1,500 MW of utility scale projects till 2015, the policy targets an installation of 1,000

MW from the fulfillment of SPO. These obligations have been mandated at 3% till December 2013

and 6% from 2014 onwards on various power consumers such as Special Economic Zones (SEZs), IT

parks, industrial consumers guaranteed with 24/7 power supply, colleges, telecom towers, residential

schools and all buildings with a built up area of more than 20,000 square meters. Obligated entities

can fulfill their SPOs by doing one of the following: generate own solar power, buy solar power from

a third party within Tamil Nadu, buy RECs or buy solar power from the state distribution companies

at the solar tariff. The realization of this target is dependent on the enforcement of these SPOs by the

local authorities. Any provision of penalty for not meeting such obligations is not highlighted in the

policy document. The remaining 500 MW of utility scale projects is expected to come up using a GBI

based on a reverse bidding process. The guidelines for the process are expected to be released

separately.

There is also a provision for solar parks to come up in 24 districts of the state in a phased manner to

accommodate these utility scale projects. The Tamil Nadu government has estimated that through

the implementation of the SPO mechanism 500 MW of solar power will be installed for direct use of

or third party sale to SPO obligated entities. This provides an opportunity for project developers to

enter into private PPAs for the sale of solar power to those obligated entities that do not regard solar

power as part of their core business or that do not have the financial liquidity to set up a solar power

plant to fulfill their SPO. For example, many commercial consumers will not be equipped with the

infrastructure, space or technical knowledge to set up large solar power plants themselves and on

site. Therefore, they will often choose to buy power from private power producers by signing a PPA

with them.

The remaining 1,15 MW of the policy target is expected to come up using the existing REC

mechanism. Unlike the recently announced Andhra Pradesh solar policy, the Tamil Nadu solar policy

does not provide any significant incentive for REC projects to come up in the state. These installations

are expected to be driven in sync with the national REC.

Tamil Nadu issued an expression of interest for 1,000 MW on January 4th 2013 and received 92

applications for 104 projects, totaling a capacity of only 499 MW. This was the first time a public

tender for FiT based allocation The lowest bid was Rs. 5.97(€ 0.09/$ 0.12)/kWh (at an annual

escalation of 5% for the first 10 years of the 20 year PPA). As this was deemed unworkable by many

project developers the state decided to provide a ‘workable tariff’ of Rs. 6.48 (€ 0.10/$ 0.13)/kWh (at

an annual escalation of 5% for the first 10 years of the 20 year PPA) at which developers would be

comfortable singing a PPA.

At this tariff, a capacity of 690 MW has been tied up for. New interests that have come in after the

bidding process have helped take the capacity up to this level. The key reason for the unexpected

increase in capacity is the new interest for two projects of 100 MW each.

Tamil Nadu Overview

The Government of Tamil Nadu is committed to mitigate the climate change effects by bringing out

policies conducive to promote renewable energy generation in the State. The Government intends to

make renewable energy a people’s movement just like rain water harvesting.

The state is blessed with various forms of renewable energy sources viz., Wind, Solar, Biomass,

Biogas, Small Hydro, etc. Municipal and Industrial wastes could also be useful sources of energy while

ensuring safe disposal.

Renewable Energy (RE) sources provide a viable option for on/off grid electrification & wide

industrial applications.

Establishment of TEDA

The Government of Tamil Nadu realized the importance and need for renewable energy, and set up a

separate Agency, as registered society, called the Tamil Nadu Energy Development Agency (TEDA) as

early as 1985,as per G.O.Ms.No.163, P. & D. (EC) Department, dated 29.11.1984 with the following

specific objectives:-

1 To promote the use of new and renewable sources of energy (NRSE) and to implement

projects therefore.

2 To promote energy conservation activities.

3 To encourage research and development on renewable sources of energy.

Renewable Energy Installations

Renewable Energy Program/ Systems Cumulative achievement up to 08.02.2016 (MW)

Wind Power 7506.41

Bagasse Cogeneration 659.40

Biomass Power 230.00

Solar Power (SPV) 429.26

Total 8825.07

India (31.12.2015)

Thermal 1,98,484.44MW

Hydro 42,623.42 MW

Renewable (13.2%) 37,415.53 MW

Nuclear 5,780.00 MW

TOTAL 2,84,303.39MW

Tamilnadu (30.06.2014)

Thermal 10,411 MW

Hydro 2,182 MW

Renewable (12%) 8,075 MW

Nuclear 524 MW

TOTAL 21,192 MW

http://teda.in/

Future of solar parks.

State wise installed solar power

State MW

Andaman & Nicobar 5.10

Andhra Pradesh 357.34

Arunachal Pradesh 0.27

Chandigarh 5.041

Chhattisgarh 73.18

Daman & Diu 4.00

Delhi 6.71

Gujarat 1024.15

Haryana 12.80

Jharkhand 16.00

Karnataka 104.22

Kerala 12.03

Lakshadweep 0.75

Madhya Pradesh 678.58

Maharashtra 383.7

Odisha 66.92

Puducherry 0.03

Punjab 200.32

Rajasthan 1264.35

Tamil Nadu 418.945

Telangana 342.39

Tripura 5.00

Uttar Pradesh 140

Uttarakhand 5.00

West Bengal 7.21

Others 0.79

Total 5129

Demography, social issues and economic status, income per capita, comments on acceptability of

the project

Temp, humidity, restrictions, pollution norms, sunlight, rain etc

Solar irradiation data of different cities in Tamilnadu

Jan Feb Mar Apr May Jun July Aug Sep Oct Nov Dec Avg

Ambattur 4.89 5.83 6.56 6.61 6 5.12 4.63 4.71 4.94 4.37 4.02 4.21 5.16

Avadi 4.89 5.83 6.56 6.61 6 5.12 4.63 4.71 4.94 4.37 4.02 4.21 5.16

Chennai 4.89 5.83 6.56 6.61 6 5.12 4.63 4.71 4.94 4.37 4.02 4.21 5.16

Madurai 4.62 5.44 6.1 5.6 5.59 5.08 4.89 5.07 5.25 4.55 4.08 4.14 5.03

Pondy 4.65 5.59 6.29 6.04 5.76 5.21 4.85 5.01 5.22 4.32 3.86 4.06 5.07

Salem 4.84 5.76 6.41 6.06 5.87 5.1 4.7 4.87 5.15 4.47 4.05 4.25 5.13

Teni 4.84 5.68 6.28 5.68 5.54 4.52 4.32 4.66 5.05 4.33 4.04 4.24 4.93

Thanjavur 4.6 5.58 6.3 5.88 5.66 5.3 5.06 5.23 5.42 4.46 3.89 4.06 5.12

Trichy 4.7 5.68 6.39 5.85 5.7 5.18 4.92 5.08 5.32 4.53 4.05 4.18 5.13

Tirunelvel

i

4.79 5.52 6.06 5.44 5.22 4.38 4.45 4.79 5.06 4.37 3.93 4.19 4.85

Tiruppur 5.03 5.78 6.42 5.99 5.74 4.75 4.41 4.56 4.92 4.4 4.18 4.42 5.05

Tuticorin 4.94 5.85 6.59 6.17 5.85 5.47 5.53 5.75 5.92 5.12 4.26 4.37 5.49

6.1.4 Scale of the project and Resource Requirements in terms of Land and Capital

Write their key particulars such as land parcel size, no of Solar power developer projects, size of

individual units, watts of power etc

The State Government will identify the nodal agency for the solar park and will also identify the land

for proposed solar park. Thereafter it will send a proposal to MNRE for approval. After the solar park

is approved by MNRE, the implementing agency may apply for a grant of Rs. 25 lakhs for preparing

DPR, conducting surveys etc. Thereafter application may be made for the grant at the rate of up to

Rs.20 lakhs/MW or 30% of the project cost including grid connectivity cost whichever is lower, which

will be released as per the following timelines:

S. No. Milestone Timeline % of subsidy disbursed

1 Date of issue of administrative approval Day 0 5%

2 Land acquisition (50% land acquired) 5 months 20%

3 Financial Closure 8 months 20%

4

Construction of Pooling Substation, Land

Development and other Common

facilities as per DPR 15 months 25%

5 Transmission line and Grid Connectivity - 20%

6 Final installment on completion - 10%

The grant will be managed and released by SECI on behalf of MNRE for which SECI will be given a

fund handling fee of 1%. If the park is developed in phases, grant will also be phased out in

proportion to expenditure in each phase.

Based on above, the estimated cost has been worked as

under:-

(Rs. in Crores)

(i) Cost of 20,000 MW @ Rs.20 Lacs/MW 4000.00

(ii) 1% fund handling fee for SECI on above amount 40.00

(iii) Cost of DPR preparation etc. for 25 Solar Parks

@ Rs. 25 Lacs each park 6.25

Total 4046.25

Transmission and evacuation of power from solar park

Interconnection of each plot with pooling stations through 66 KV /other suitable voltage

underground or overhead cable will be the responsibility of the solar project developer.

The designated nodal agency will set up the pooling stations (with 400/220, 220/66 KV or as may

be suitable switchyard and respective transformers) inside the solar park and will also draw

transmission to transmit power to 220 KV/400 KV sub-station.

The responsibility of setting up a sub-station nearby the solar park to take power from one or

more pooling stations will lie with the central transmission utility (CTU) or the State transmission

utility (STU), after following necessary technical and commercial procedures as stipulated in the

various regulations notified by the central/state Commission.

If the state government is willing to buy substantial part of the power generated in the solar

park, preference will be given to STU, which will ensure setting up of sub-station and

development of necessary infrastructure for transmission of power from substation to load

centres.

If the state is not willing to buy substantial power generated in the solar park, then CTU may be

entrusted with the responsibility of setting up 400 KV sub-station right next to the solar park and its

connectivity with the CTU. For setting up of this transmission & evacuation infrastructure, Power Grid

may prepare a separate project to be funded from NCEF / external funds / Green Corridor project, if

the cost is very high. The system would be planned in such a manner so that there is no wheeling

charge applicable on solar power in accordance with the CERC Regulation in this regard or they are

very low.

To build this infrastructure using the highest possible standards, the whole solar power evacuation

network scheme may be designed using latest technologies like SCADA, GIS, Bay controller, Online

monitoring equipment for dissolved gas analysis, OPGW, PLCC etc.

Power sale arrangement

Acceptance for development of solar park under the scheme does not guarantee Power purchase

agreement (PPA) or a tariff for the power to be produced. The project developers have his own

arrangements for a PPA or get selected in any Government of India or State Government scheme.

The developer will be free to set up projects under any scheme or for third party sale.

Loan

MNRE will also put in efforts to tie up with multilateral/ bilateral funding agencies to finance the

entire or a part of the cost of the solar parks. The MNRE grant will be treated as the developers'

contribution to get this loan. The loan tenure and the moratorium period will be set in accordance

with the banks’ terms and conditions while the annual interest will be set in accordance with banks’

LIBOR-based lending facility.

Funding Connectivity

The connectivity with grid i.e. 220/400 KV substation and transmission line to connect with CTU /

STU’s, existing network will be an important component. For the same, money out of the MNRE

grant may be used. The loan from multilateral or bilateral agencies may also have a component to

fund connectivity. If the expenditure is high than a separate proposal may also be considered for

funding from NCEF, Green Corridor Program or any other source.

Equity Contribution

Minimum up front equity will be required to setup the implementing agency as most of the costs will

be covered through MNRE grant and loan. Most of the land is expected to be Government Land. The

expenses on land can be recovered and paid from sale proceeds gradually.

The surplus money that will accrue from sale may be converted into equity of promoters so that the

implementing agency gets a financial strength for long term sustenance.

mnre.gov.in

6.1.5 Primary Analysis for potential investors - PE/Joint venture /financiers

Write their prime contractors, collaborators, technology companies, JV partners etc.

Essel Group

Reliance Group

IREDA

Power Finance Corporation Limited

PE

Climate Change Capital

IDFC Private Equity

Nereus Capital

SBI Macquarie

Infrastructure India

Financers

Headway Solar

Solarsis

Starling Solar

Selco

Fourth Partner Energy

Solar project developer in India

Adani Power

AES solar energy

Andhra Pradesh Power Generation Corporation

Andromeda Energy Tech

APCA Power

Chandraleela Power Energy

Chhattisgarh Investments

Dr. Babasaheb Ambedkar Sahakari Sakhar Karkhana

Essar Power

Essel Infra projects

GAIL

Gujarat Industries Power Company

Gujarat Mineral Development Corporation

Gujarat Power Corporation

India Solar Ray Power

Indian Oil Corporation

Karnataka Power Corporation

Konark Gujarat PV Pvt.

Lanco

Maharashtra state power generation

Moser Baer Energy & Developoment

Punj Llyod

Raajratna Energy Holdings

Reliance

Tata Power

Welspun

Yantra eSolarIndia

US-based private equity firm KKR and Co. Is evaluating the possibility of investing around $100

million in renewable power projects of Greenko Group, a UK-based group that has power projects in

India. According to VccEdge, the renewable power space saw 14 deals worth $298 million during

CY2014 till May 2014 against 32 private equity (PE) and merger &acquisition (M&A) deals worth

$1,288 million during CY2013 General Electric Co's unit, GE Energy Financial Services plans to invest

$24 million in a solar power project in Madhya Pradesh. The renewable energy space offers

tremendous amount of opportunity due to various factors like no dependency on fuel (wind, solar),

favorable Government's initiatives and reduction in prices (in solar PV panels).

Key drivers for PE investments in Renewable Energy in India

India's 12th Five Year Plan sets an ambitious target for the development of renewable energy in the

country. During the 12th Five Year Plan, renewable power capacity addition of 30,000 MW has been

planned. According to the 12th Five Year Plan document, the projected investments in the renewable

energy sector are estimated to be around `3.2 lakh crore during the 12th plan. Out of this `33,003

crore (Gross Budgetary Support (GBS) 19,113 + Internal and Extra Budgetary Resources (IEBR) of

13,890) are expected to come from Centre as an outlay for MNRE during the 12th plan. `5,425 crore

is expected from States, which leaves a huge portion of private sector investments of 2,80,198 crore.

6.1.6 Indicative financial viability (RoI or IRR)

TAMILNADU: Preferential Tariff INR 6.48/unit with 5% escalation for ten years.

CASE 1: IF CUF =19%

EPC COST L&T

INR LAKH/MW

PROJECT IRR

%

EQUITY IRR

%

DSCR LEVELISED COST

OF TARIFF

(INR/KWH)

650 10 14 0.90 8.46

700 9 12 0.85 8.96

750 8 11 0.80 9.46

CASE 2: IF CUF=20%

EPC COST L&T

INR LAKH/MW

PROJECT IRR

%

EQUITY IRR

%

DSCR LEVELISED COST

OF TARIFF

(INR/KWH)

650 10 16 0.95 8.05

700 10 14 0.89 8.52

750 9 12 0.84 9.00

CASE3: IF CUF= 21%

EPC COST L&T

INR LAKH/MW

PROJECT IRR

%

EQUITY IRR

%

DSCR LEVELISED COST

OF TARIFF

(INR/KWH)

650 11 17 1 7.67

700 10 15 0.94 8.12

Cost Economies of 100kwp Grid Connected Rooftop Solar Project

S.No Parameter Value

1. Capacity (in kWp) 100

2. Cost (in Rs) 75 lakh

3. Equity by developer (20%)Borrowing from other sources (30%)

14 lakh + 21 lakh loan fromother sources. It could be SBI’s normal lending

4. World Bank loan to developer (50%)

35 lakh

5. Electricity generation per year 1.50 lakh unit

6. Revenue generation per year @Rs.7.04 per unit *(CERC rate for 2015-16)

Rs 10.56 lakh

7. Revenue generation per month Rs. 88, 000/-

8. Simple payback period (2÷6) 6.62 year

9. EMI for world Bank/ADB Rs 33 447/-(8%, 15 yr, Rs. 35 lakh)

Rs. 33,447/

10. EMI for balance 50% equity/borrowing (12%, 15 yr, Rs. 35 lakh)

Rs 42 000/-

11. Total EMI payment by developer Rs. 75,447/-

12. Net saving per month to developer

Rs. 12,553/-

Source Ministry of New and Renewable Energy (MNRE)

6.1.7 Implementation and Time division aspects of the project

6.1.8 Risk Factors

Write their problem areas that require solution.

High charges imposed by solar park developers defeating its entire purpose

Transmission facilities being only set up in 2-3 years, till which park cannot be used

Private players are not interested too much in setting up solar parks, as it locks away capital for a

long time

No clarity on the revenue model for solar park developers

6.1.9 List of regulatory approvals

Industrial Clearance

Land conversion (Agricultural to Non-Agricultural)

Environmental Clearance Certificate

Contract labour license from Labour Department

Fire Safety certificate from Fire Department

Latest tax receipt from the Municipal/Gram Panchayat for the factory land.

Auditor compliance certificate regarding fossil fuel utilization

Approval from Chief Electrical Inspector

Clearance from Forest department

Also, all necessary approvals/agreements before start of Solar PV project construction are to be

furnished as and when necessary. These include the following:

Land purchase

Power Evacuation arrangement permission letter from DISCOM

Confirmation of Metering Arrangement and location

ABT meter type, Manufacture, Model, Serial No. details for Energy Metering.

Copy of PPA (important as Preferential PPA projects are not eligible for REC mechanism)

Proposed Model and make of plant equipment

Undertaking for compliance with the usage of fossil fuel criteria as specified by MNRE

Details of Connectivity with DISCOM

Connectivity Diagram and Single Line Diagram of Plant

http://efficientcarbon.com/services/energy/renewable-energy-advisory

6.1.10 SWOT analysis

Strengths:

1. High growth industry with significant future potential.

2. Sunlight is available in sufficient quantity in many regions.

3. Proven technology with low operation & maintenance cost, which is also scalable.

4. Availability of Government Incentives for growth and expansion.

Weakness:

1. Owing to high capital costs, the business needs external incentives to be economically feasible,

thus increasing dependence on Governmental policies.

2. The capital intensive nature of the business might favour larger businesses over smaller

ones.

3. The distributed and intermittent nature of solar energy makes it difficult for utilities to rely on

Solar PV for their base load.

Opportunities:

1. Government's ambitious target and attractive policies open up many avenues for investment.

2. Opportunities exist all along the solar PV business value chain, not just for power plants.

3. Entirely new opportunities could open up as there is high innovation in technology, especially with

reduction in costs in Future.

Threats:

1. The large scale up of capacity could face distribution and evacuation challenges due to inability to

scale up transmission on a similar scale.

2. Off-peak season reduces cash flow.

3. Industry is new, so finding skilled workforce could be a problem.

4. Solar panels work only at 22 percent efficiency, therefore achieving solar targets could be difficult

despite scaling up due to the 'spike and ebb effect '(of day and night).

www. lsifinance .com/pdf/ lsi -research/ SOLAR - ENERGY

6.1.11 PESTLE Analysis

Political -

India was the first country in the world to set up a ministry of non-conventional energy resources, in early

1980s. India already becomes a leader in wind power production. In the field of solar energy production

some large scale projects have been proposed and a 35,000 km2 area of the Thar Desert has been set aside

for solar power projects. To promote electricity generation using solar energy Government of India

launched Jawaharlal Nehru National Solar Mission in January 2010.

The Government aims to install 10GW of Solar Power and of this 10 GW target, 4 GW would fall under

the central scheme and the remaining 6 GW under various State specific schemes.

The Government has initiated a subsidy scheme to help individuals and organizations procure these Solar

Energy Systems at reduced capital costs. The scheme last modified on 15th March 2012 provides 40%

subsidy on capital costs of Solar PV Systems for units located in both urban and rural areas in India.

Only the models approved by MNRE are eligible to be covered under the scheme. The list below gives

models approved by MNRE:

Model

Photovoltaic Modules/Panels( Bettery capacity

Maximum recommended load and duty cycle

Benchmark Cost(Rs.)

Max Capital Subsidy elegible(Rs.)

1 10 12 V, 7 AH (SMF) 5-7watt load for 3-4 hrs (20 watt hrs/day) 2700 1080

2 18-20 12 V, 20 AH (Tubular L.M./Gel VRLA) 10 watt load for 4 hrs (40 watt hrs/day) 4860-5400 2160

3 37-40 12 V, 40 AH (Tubular L.M./Gel VRLA) 20 watt load for 4 hrs (80 watt hrs/day) 9990-10800 4320

4 50 12 V, 60 AH (Tubular L.M./Gel VRLA) 30 watt load for 4 hrs (120 watt hrs/day) 13500 5400

5 70-80 12 V, 80 AH (Tubular L.M./Gel VRLA) 45 watt load for 4 hrs (180 watt hrs/day) 18900-21600 8640

6 100 12 V, 120 AH (Tubular L.M./Gel VRLA) 60 watt load for 4 hrs (240 watt hrs/day) 27000 10800

7 125 12 V, 150 AH (Tubular L.M./Gel VRLA) 75 watt load for 4 hrs (300 watt hrs/day) 33750 13500

8 150-160 24 V, 75/80 AH (Tubular L.M./Gel VRLA) 90 watt load for 4 hrs (360 watt hrs/day) 40500-43200 17280

9 200-21024 V, 100/120 AH (Tubular L.M./Gel VRLA) 120 watt load for 4 hrs (480 watt hrs/day) 54000-56700 22680

Environment -

The construction and operation of solar parks has negative impact on the environment. Production of these

panels consumes substantial amounts of energy and produces waste water and hazardous by-products,

which are released in air during the manufacturing process. The concern point is that the silver used in the

module is leftover and also considered a dangerous waste. A PV contribution of five percent of the current

world electricity production would require about 50 percent of current silver production. Installing a solar

farm has an adverse ecological impact and can affect the rainfall and the drainage of a region. The major

drawbacks of constructing a solar farm are that it affects existing land uses, such as grazing, agriculture

and minerals production and also affects areas of critical environmental concern or special recreation

management areas.

Good maintenance practices and proper planning can certainly help to minimize the negative impacts of

producing solar panels by using hazardous material. Innovative production technologies for PV modules

would help to lower the environmental impacts by efficiently utilizing silicon in modules and recycling it.

Reducing the use of silver content in the modules would also be a significant step.

Technological -

Amid the growing demand for sustainable energy, concentrating solar power (CSP) technologies are on the

verge of large scale global deployment. These technologies harness concentrated sunlight to generate

electricity. In the coming decade, the CSP market is estimated to be worth over a billion dollars. The

Government of India too has identified solar power as an important renewable energy resource and its

commitment to develop solar power is reflected in the ‘National Action Plan for Climate Change’ wherein

it has announced the ‘National Solar Mission’ as one of the eight missions to combat the challenges of

climate change.

Hence, it is important to understand the market readiness of different CSP technologies, the investment

opportunities which these technologies are likely to create and the overall market development scenario.

For several years, worldwide growth of solar PV was driven by European deployment, but it has shifted to

Asia, especially China and Japan, and to a growing number of countries and regions all over the world.

Worldwide growth of photovoltaic has averaged 40% per year since 2000 and total installed capacity

reached 139 GW at the end of 2013. Concentrated solar power (CSP) also started to grow rapidly,

increasing its capacity nearly tenfold from 2004 to 2013. As of the end of 2013, worldwide cumulative

CSP-capacity reached 3,425 MW.

Solar energy is considered a sustainable energy supply technology however; the production technology for

solar modules requires relatively high energy outputs. Most solar parks are ground mounted PV systems.

They can either be fixed tilt or use a single axis or dual axis solar tracker. While tracking improves the

overall performance, it also increases the system's installation and maintenance cost. A solar inverter

converts the array's power output from DC to AC, and connection to the utility grid is made through a high

voltage, three phase step up transformer of typically 10 kV and above.

The parabolic trough technology is currently the most proven CSP technology and, therefore, the

most developed and standardized.

Central receiver technology is also well proven. Central receiver systems use a field of distributed

mirrors which individually track the sun and focus the sunlight on the top of a tower. Such systems can

achieve up to 35% peak and 25% annual solar electric efficiency. Over 300 MW capacity CST power

projects have been announced by various companies in the coming decade.

The compact linear fresnel reflector system is similar to the parabolic trough collector system. It

consists of an array of nearly-flat reflectors which concentrates solar radiation onto an elevated

inverted linear receiver. Water flows through the receiver and is converted into steam. The technology

is seen as a potentially low-cost alternative to trough technology for the production of solar process

heat.

The parabolic dish-shaped reflector concentrates sunlight on to a receiver located at the focal point

of the dish. The dishes are usually designed to track the Sun along two axis to get reflect the sun beam

on point of focus.

The solar PTC-based solar thermal power plant was estimated to cost Rs 202150/kW and power tower-

based solar thermal power plant Rs 235877/kW.

A cost break-up of the trough and power tower technologies was undertaken. The solar PTC-based solar

thermal power plant was estimated to cost Rs 202150/kW and power tower-based solar thermal power

plant Rs 235877/kW.

Solar power plants use one of two technologies:

Photovoltaic (PV) systems use solar panels, either on rooftops or in ground-mounted solar farms,

converts sunlight directly into electric power.

Concentrated solar power plants use solar thermal energy to make steam that is thereafter converted

into electricity by a turbine.

Legal-

India has started emphasizing power generation from renewable sources that is either grid interactive or off

grid. In order to achieve a sustainable development path that simultaneously advances economic and

environmental objectives the National Action Plan for Climate Change (NAPCC) was framed.

Policies supporting Grid-Interactive renewable power-

Access to quality and reliable electricity at reliable rates and minimum lifeline consumption of

1unit/household/day by year 2012.

For remote villages where grid electrification is not feasible, off-grid based solutions based on

standalone systems to be taken up for supply of electricity.

Every state to come up with rural electrification plan mapping details of electricity delivery

mechanism that may be linked to district development plans and this has to be intimated to

appropriate commission.

Rajiv Gandhi Gramin Vidyutikaran Yojana (RGGVY) –

This scheme is being implemented by Rural Electrification Corporation for permitting stand alone systems,

rural electrification, bulk power purchase & management of local distribution. Under this scheme, projects

could be financed with 90% capital subsidy.

Policies supporting Off-Grid renewable power-

Remote Village Electrification Programme-

The decision for choosing particular technology for power generation in such remote areas is taken by state

implementation agency after examination of technical feasibility and resource availability. The projects are

eligible for central financial assistance and developers can propose projects under the format specified in

the policy document.

Special Area Demonstration Project Programme-

The Special Area Demonstration Project Scheme of the MNRE has been introduced with an objective of

demonstrating application of various Renewable Energy systems in a project mode at places of National

and international importance. The SADP Scheme is being implemented into two parts- Demonstration of

Renewable Energy Systems at Prominent Places and the Energy Park scheme.

Renewable Energy Supply for Rural Areas

This scheme was framed with the objective of developing and demonstrating commercially viable models

for de-centralized energy supply in rural areas from renewable sources. The project is under demonstration

mode for 30 target villages in Chhattisgarh.

Renewable Energy for Urban, Industrial and Commercial Applications

The programmes implemented under this scheme are working for developing: Solar energy systems and

devices Energy recovery from urban, industrial and commercial wastes and Bioenergy and cogeneration in

industry.

State Government

Three state governments: Rajasthan, Gujarat and Karnataka have come up with their separate solar policy.

Summary of three state’s solar policy is given here.

State Gujarat Rajasthan Karnataka

Target PV- 365MW Thermal-

350MW

2013 2017 200MW (40MW

annually)PV 150

MW

200

MW

Thermal 150

MW

200

MW

Project

Capacity

2-25MW PV: 5-10 MW;   PV: 3-10 MW;  

Thermal   : 5-50 MW Thermal: Min 5 MW

Operative

Period

30/03/2014 31/03/2016

Sale of

Power

Period

25 years 25 years 25 years

Sale of

Power Tariff

PV   Tariff based competitive bidding Tariff based

competitive bidding

with base price @ Rs.

14.50 /kWh (max)

Year1-12: Rs.

15.00/12.00  

Year 13-25: Rs. 5.00/3.00

Thermal

Year 1-12: Rs. 10.00/9.00

Year 13-25: Rs. 3.00/3.00

Power

Evacuation

66kV 33kV and above 11kV and above

Current

Status

PPAs signed for about

1200 MW

Allotment in progress Allotment in progress

Economical -

Solar energy is expensive to install. It requires expensive PV (photo-voltaic) panels which have a working

life of only 10 to 20 years, which means new ones must be bought at intervals. In order to have continuous

power from solar energy, you need storage batteries. Each battery is expensive and you need a large

number of them to store enough power for household or business use. . Solar energy technology is a very

inefficient form of energy conversion which makes its cost too high. That is why solar power is so heavily

subsidized by governments.

Building the structures to harness the natural power will be expensive given its new tech and there will be

issues about where to build etc but in the long run companies building these stations will make more

money than they are now. It’s a lot more expensive to burn coal over a long time. Everyday people will

benefit too from a cheaper bill every month.

Social -

Energy is a basic requirement of society and a basic requirement for individual life. The energy crisis is

going to take a lot of social action with government support. Rising energy costs are forced global leaders

to research alternatives and provide the funding to make changes. Issues like global warming are becoming

mainstream reality and causing worldwide concerns about pollution and consumption.

Currently people avoid the need for battery storage of solar power by using mains electricity for heavy

appliances. Solar energy is expensive to install. It hides the real cost to society to interest people in buying

them. Taxpayers still pay the real cost indirectly. At the beginning few people have installed solar power

the subsidy is less noticeably but when a larger number of people start using solar energy the cost to each

taxpayer will become greater and effectively everyone will each be paying closer to the real price.

6.1.12 Recommendation

Electricity consumption in India has been increasing at one of the fastest rates in the world due to

population growth and economic development. India's economy faces increasing challenges because

energy supply is struggling to keep pace with demand and there is energy shortage almost

everywhere in the country. This is compounded by the fact that the power sector continues its

struggle to meet power generation goals as conventional sources, especially coal, has not been able

to keep up with the country's ever-increasing demand. Such chronic lack of energy and unreliable

supplies threaten India's economic growth. As a result, interest has shifted towards renewable

sources of energy.

Solar energy is the prime free source of inexhaustible energy available to mankind and the

geographical position of India makes it a sunlight rich country, blessed with about 5,000 TWh of solar

insolation every year. Even if a tenth of this potential can be utilised, it could mark the end of India's

power problems by judiciously using the country's deserts and farmland to construct solar plants. At

the same time, renewable energy also has the potential to re-energise India's economy by creating

millions of new jobs, allowing the country to achieve energy independence, reduce its trade deficits

and propel it forward as a “Green Nation.”

Solar energy has the potential to reduce the current energy peak deficit significantly and improve

delivery due to its distributed nature, provided, it gets the appropriate financial support from the

Centre as well as the States. Over the next few years, solar power will gain significant importance in

India's energy mix owing to, both financial viability and availability perspectives along with proper

channelization of the energy produced. It can thus be said that the sun will continue to power the

economic and energy growth in the current millennium. India is slowly gaining prominence in the

generation of solar power due to the comprehensive and ambitious solar policies and projects being

undertaken by the Centre and states. Further, the National Solar Mission is also a positive step in the

endeavor towards a solar energy driven nation. In the latest budget, the Government has proposed

an amount of Rs.500 crore to develop some mega solar power plants in Gujarat, Rajasthan, Andhra

Pradesh, Tamil Nadu and Ladakh. Solar power-driven agricultural water pumping stations and 1 MW

solar parks on canal banks will also be developed in the country at an estimated cost of

approximately Rs. 444 crore and Rs. 111 crore,

respectively.

In a further boost to the Green Energy Power Sector major commitments, 271 GW in terms of

capacity, were received from various international and domestic companies in addition to the PSUs

and the Railways. Availability of finance for the Green Energy sector which is normally perceived to

be a big hindrance to the sector, has also been addressed by various Banks and FIs, with commitment

to Green Energy flagged at Rs. 3,52,640 Crore for installation of about 71 GW of capacity during the

conference. It is expected that a substantial portion of these Green Energy commitments will be

channelized towards the Solar Power Sector. Considering all these facts, the plans, the commitments

and hopes for a smooth execution of these plans, we expect India to be a leading solar power driven

country in the world sooner rather than later.