Solar PV industry recommended to stay optimistic; US govt. supports India’s clean energy initiative!
Solarcon India 2011 started today in Hyderabad, with Jim Brown, president, Utility Systems Business Group, First Solar Inc., stating that the global solar PV industry is in a bit of the state of turmoil. Some are driven by pure supply-demand. He recommended the industry to be strategically optimistic. He cautioned that not everyone who’s playing in this field, will go on to survive the next two to three years. First Solar reiterated its optimism regarding its own prospects in the industry.
Commending Solarcon as a flagship event for the Indian solar PV industry, Dr. Bharat Bhargava, director – Photovoltaics, Ministry of New & Renewable Energy, Government of India, said that the policies and programs started by the Indian government are now yielding results. The Jawaharlal Nehru-National Solar Mission has seen the participation of the industry, the academia and the funding agencies, showing that the success of the program lies in the hands of the people involved.
When the Indian solar PV industry started, the country was said to have only 2MW. By the end of October this year, India had 125 MW. By 2013, it will likely reach 2GW, according to Dr. Bhargava.
He apprised the audience regarding the REC (renewable energy certificate) program. Initially, the REC was for three years, but was later extended to five years. As of now, experts are consulting to enable it to increase to seven years. He estimated that the Indian solar PV industry might even go up to 100GW, instead of 20GW, and encouraged everyone to work together and make this happen.
Francisco J. Sanchez, Under Secretary of Commerce for International Trade, USA, stated that a lot of excitement is in the air! “We are
committed to India and its solar industry. There are opportunities to do big things in this industry.” He added that solar has achieved a triple bottom line.
According to Sanchez, the solar industry is worth $17 billion in India and it is growing. India is spending $19 billion by 2022 to produce 20GW of solar energy. There will be a lot of engineers, manufacturers, etc., who can monitor and contribute to the growth of the industry. He advised that India will need to add 150GW of capacity over the next five years. Therefore, India is well placed to seize opportunities with trade partnerships.
He said: “The US government fully supports India’s clean energy initiative. There is an abundance of opportunities in solar. We can achieve much more in partnerships. We are committed to working with you. It is a huge opportunity for both countries.
“Some of the obstacles include repositioning for success, where companies indulge in unfair trade practices. When the market is open for competition, it creates thousands of jobs, and the market is growing quickly, helping many. It is all about chance and choice. We have a chance to build a great industry. We need to work together in partnership and share value. We will work together for the good of India and its consumers. We hope that India will take the same approach. India now has the chance to build an exciting industry for the future.”
He touched upon the three schemes that Dr. Bharat Bhargava of the MNRE had spoken about earlier. These are — NVVN scheme — typically 5MW/100MW schemes, rooftop component, and off-grid component.
Majumdar said that each one of these schemes has to be looked at differently. Two things will be important — generation and tariff. Tariff is derisked. All are going to look at the prediction and the forecast of generation. You will need good data to forecast for your project.
Power purchase agreements (PPAs) are signed in terms of MW. A change in mindset is also required. There are areas we often neglect. For example, the quality of water at site can create a lot of distortion in forecast generation. Or, how do you decide one module is better than the other?
On the 100MW scheme on power projects, Majumdar added that the entire history of what the distribution center becomes at downtime will be important. On the off grid component, Majumdar said that today, it looks small. However, it has the largest significance. Its impact is tremendous.
“Solar financing is tough. However, we will try to make it easier and show the financial institutions that it is possible to de-risk projects. We will get the lending community to activate itself,” he added.
Earlier, Dr. Bharat Bhargava, director, solar PV, MNRE, mentioned that the JN-NSM offers opportunities to invest in grid power projects, off grid projects and manufacturing. He added that the enabling polciy and framework is in place. Aggressive R&D and local manufacturing are necessary to achieve grid parity. He also outlined the R&D strategy. It includes:
* Research at academic/research institures on materials and devices.
* Applied research on the existing processes and developing new technologies.
* Development of CoEs on different aspects of solar energy.
* International collaborations.
Dr. Bhargava also mentioned the HRD strategy. It includes:
* Develop specialized curriculum for teaching solar energy at B.Tech, M.Tech and IIT levels.
* Announce fellowship for education and research.
* Provide training in grid and off-grid power projects.
* International training via bilatera programs.
* Testing and training institute.
He said: “The NSM is the change in India. You try to look for simplicity, see what’s going on, and speed. We hope that happens in India.”
Meyers added: “We see SEMI playing the role as a ‘connector’ in markets where technologies are emerging. Two things need to happen in emerging technologies as well as regions. One, there has to be a roadmap — clear and defined. Two, there has to be standards development. SEMI is already playing a key role in the standards for PV manufacturing equipment and materials. It will extend that activity into India as well.
“Our experience in standards in semiconductors has shown that standards results in cost reduction and the net benefit of cost savings is passed on not only to the consumer, but this also allows the savings to be ploughed back into R&D by the industry.”
Delivering the valedictory address at Solarcon Iindia 2010, Deepak Gupta, secretary, MNRE, government of India, detailed the main agenda of Jawaharlal Nehru National Solar Mission (JN-NSM) for India as follows:
* Reduction of fossil fuels consumption.
* Improve access to electricity.
* Reduce the carbon footprint.
He said that solar provides the versatility to meet India’s objectives. “When we talk of NSM, people only tend to see the target. There are several other important objectives. One of those being the target of 20 million rural household lights.”
He added that the target of NSM should be seen in context of the fundamental objectves of the NSM. “We need to develop indigenous manufacturing capacity as well. Solar power must lead to cost reduction and technology improvement.
“We have seen the rush for 1MW, we are likely to see a similar rush for 5MW. We iwill go in for reverse auction. We hope that serious players with long term strategy will participate. On the grid side, we kept a 100MW as the target, of which 90MW has been proposed.”
Off-grid opportunities significant
Gupta encouraged the Indian industry to look at the off grid opportunities more seriously. Off-grid opportunities are significant and must be strongly looked into, in addition to the grid-connected power projects. For instance, even if solar/PV is deployed for say, 50,000 telecom towers across the country, there can be huge savings — in terms of energy savings and usage of diesel.
Actually, there is also a need to identify the various areas where diesel can be replaced. The telecom tower is just one example. This is a huge market opportunity waiting to happen. He urged the industry to develop expertise for all this.
Gupta added: “When we talk about off grid, we should also look at rural lighting. The 20mn target, broadly means covering 4,000 households every day from 15th of June over the next 12 years. Solar lighting is a revolution waiting to happen. We also need to find suitable business models of solar power for village community, and try and provide livelihood opportunities.”
Next, the NSM is encouraging strong R&D programs. Much more needs to be done on this front. Quality control and certification will also be important. An international lab is said to be opening its facility in Bangalore in August.
Gupta pointed out that there is also a need for the Indian solar PV industry to develop a service infrastructure. All off the grid activities will require services. It is still a neglected area.
He added that critical elements required for success of the NSM would include human resources development — building talent pool, R&D — to reduce cost, besides policy support and finance. He urged the industry to stress on the importance of standards, accreditation and quality control mechanisms to help ensure the overall quality and reliability of the PV systems.
The MNRE also welcomes CSR programs of companies to join hands in setting up projects for off-grid applications in rural areas. Now that policy details have been published, the industry must act to implement the NSM and strive to achieve the targets.
Gupta concluded: “Correctives to the policy will be done as we go along. We will also monitor closely the implementation and timelines. The NSM cannot tolerate players who will delay.”
Strong emphasis is now being placed on research and development, and rightly so. The Indian government is also working toward tackling issues involved with project financing.
Let’s take a look at what the various dignitaries from Central and State governments, EPIA and SEMI, had to say at Solarcon 2010. Please bear with me as this is quite a long post!
India needs to develop research facilities
Delivering his address at the inaugural function of Solarcon 2010, Dr. Farooq Abdullah, Hon’ble Union Minister for New and Renewable Energy highlighted that JN-NSM has been the vision of Dr. Manmohan Singh, the Indian Prime Minster. Phase 1 is now underway — a target of 1,000 MW, with 500MW for solar PV and 500MW for solar thermal.
Addressing the Indian solar PV industry, Dr. Abdullah stressed: “India should develop its technology right here! Don’t import third rate technology!” He quipped, “Sastaa roye bar bar, mehengaa roye ek bar!” That is, it is better to buy expensive and quality technology rather than banking on cheap technology.
“Your technology has to work for 25 years! You must have your own research centers. Research is one of the goals of the NSM. You have to do your own research. You are going to the market, not only for India, but also for a unified world,” he added.
The Minister remarked that by simply adding solar water heaters in several hotels had reduced their electricity bills by half. He added: “We want to encourage many players. We want true players!” Addressing the solar thermal and PV debate, he said: “When we started, we put 60:40 for thermal and PV. We changed that to 50:50.” There may be a need to go down further. “Buy the best technology, don’t buy cheap,” the Minister insisted.
He added that many states had missed the boat in phase 1 of the JN-NSM. Some examples include Bihar and Kerala. However, there is every likelihood that they will get included in phase 2 of the JN-NSM. “Look at the amount of fossil fuels we are importing at the cost of dollars and the country’s health. Just look at the savings we can do for the nation if we can develop solar technology,” added Dr. Abdullah.
Late last week, I had said that it would be a great surprise if solar/PV was not part of the budget, given the NSM. Well, it now has a major role, as do UIDs. However, as I expected, there is hardly anything for the semiconductor/VLSI industry segments, and definitely not what the industry had proposed. Apparently, semiconductor/VLSI is not yet a critical sector, and will need to wait for its time. Therefore, I am not surprised! It didn’t happen last year, and well, no change this year either!
Key budget highlights
* The plan outay for new and renewable energy has been increased by 61 percent from Rs. 620 crores to Rs. 1,000 crores. This is following the Jawaharlal Nehru National Solar Mission (NSM) announced last year, which aims for 20GW by 2022.
* Proposal to establish national clean energy fund.
* There are proposals for setting up solar and wind power projects in Ladakh region as well.
* Allocation for power sector doubled to Rs. 5,120 crores.
* Allocation of Rs. 1,900 crores for UAID scheme (UID projects).
* UID numbers are ready for take off. UID authority has been constituted, and it will issue the first set of UIDs by the end of this year.
* Smart cards extended to NREGA.
* The Unique Identification Authority of India to get an allocation of Rs. 1,900 crores.
* An effective tax administration and financial governance system calls for creation of IT projects which are reliable, secure and efficient. IT projects like Tax Information Network, New Pension Scheme, National Treasury Management Agency, Expenditure Information Network, Goods and Service Tax, are in different stages of roll out. To look into various technological and systemic issues, the minister proposes to set up a Technology Advisory Group for Unique Projects (TAGUP) under the Chairmanship of Nandan Nilekani.
* The budget proposed to further simplify FDI.
New and Renewable Energy
* The Finance Minster proposed to increase the Plan Outlay for the Ministry of New and Renewable Energy by 61 percent from Rs. 620 crores in 2009-10 to Rs. 1,000 crores in 2010-11.
* To address the problem of energy deficiency in the Ladakh region of Jammu & Kashmir which faces extremely hard climate, the government proposes to set up solar, small hydro and micro power projects at a cost of Rs.500 crores.
* The Ministry of new and Renewable Energy (MNRE), which aims to develop and utilise new and renewable sources of energy fur supplementing energy requirements of the country in an eco-friendly and sustainable manner, has got a total Plan Outlay of Rs. 1,950 crores, which includes Rs.950 crores as IEBR in the annual plan for the year. The following physical targets/activities have been set during the financial year:
* 2972 MW Grid-Interactive Power capacity addition from Wind, Small Hydro, Biomass, Power/Cogeneration, Urban & Industrial Waste to Energy and Solar Power; 142 MW eq. Off grid / Distributed Renewable Power Systems.
* Provision of basic electricity/lighting facility through SPV/other RE systems and devices, including DRPS in 1500 remote villages/hamlets; and Family type Biogass Plants of capacity of 0.30 million m2 (1.5 lakhs nos.).
* Deployment of Solar Water Heating Systems of 1.00 million m2; Promotion of Energy – efficient Buildings (1 million sqm. Floor area) and Development of Solar Cities.
* R&D activities on different aspects of new and renewable energy technologies; support to MNRE Centres /institutions and Standard and Testing; Renewable Energy Resource Assessment.
* Information, Publicity and Extension (IPE) of Renewable Energy systems; International Relations; Administration and Monitoring including HRD and Training; Support to States, Public Enterprises and Industry including HRD and training activities to be undertaken under Solar Mission.
* GST to be rolled out by April 2011.
* Rs 1133 crores outlay for launch of GST.
* SARAL – II form for individuals ready for the coming year in a simple format in only two pages.
* Computerisation of commecial tax collection in states.
* Automation of central excise and service tax already rolled out.
* Corporate tax hiked; MAT increased from 15 percent to 18 percent
* Current income tax slabs extended as follow:
Rs 1.6 lacs — nil
Rs. 1.6 lacs – Rs. 5 lacs – 10 percent
Rs. 5 lacs – Rs 8 lacs – 20 percent
Above Rs 8 lacs — 30 percent
* Under the NSM — concessional customs duty to machinery, equipment, applicances etc., required for setting up PV and thermal power units.
* Wind energy generators exempted from central excise duty.
* LED lights — central exicse duty reduced from 8 percent to 4 percent.
* To waive excise duty and solar and PV panels.
* Concessional 5 percent duty on set up of solar power unit.
* Excise duty on CFL halved to 4 percent.
* 4 percent duty on electric cars and vehicles.
* Mobile phone domestic production picking up. To encourage manufaturers of accessories, exemptions extended.
* Tax exemptions have been announced for equipment used in solar systems and wind energy system, LED lights, electric cars, cycle rickshaw, mobile phone components and certain medical equipment. Read more…
So, the Jawaharlal Nehru National Solar Mission (NSM) has been launched! The NSM was launched by the Prime Minister of India, Dr. Manmohan Singh, at the Solar Energy Conclave organized by the MNRE at Vigyan Bhavan, New Delhi this week in the presence of Dr. Farooq Abdullah, Union Minister for New & Renewable Energy, Sharad Pawar, Minister of Agriculture and Minister of Consumer Affairs, Food and Public Distribution, Jairam Ramesh, Minister of State (Independent Charge) for Environment and Forests, and Montek Singh Ahluwalia, Deputy Chairman of the Planning Commission, Government of India.
In his address, the Prime Minister of India, Dr. Manmohan Singh, said: “Increased use of solar energy is a central component of our strategy to bring about a strategic shift from our current reliance on fossil fuels to a pattern of sustainable growth based on renewable and clean sources of energy. I sincerely hope that this solar Mission will also establish India as a global leader in solar energy, not just in terms of solar power generation but also in solar manufacturing and generation of this technology.
“The importance of this Mission is not just limited to providing large-scale grid connected power. It has the potential to provide significant multipliers in our efforts for transformation of India’s rural economy. Already, in its decentralized and distributed applications, solar energy is beginning to light the lives of tens of millions of India’s energy-poor citizens.
“The rapid spread of solar lighting systems, solar water pumps and other solar power-based rural applications can change the face of India’s rural economy. We intend to significantly expand such applications through this Mission. As a result, the movement for decentralized and disbursed industrialization will acquire an added momentum, a momentum which has not been seen before.
“I am happy that the Federation of Indian Chambers of Commerce and Industry (FICCI) has been associated with this event. The role of industry in this Mission’s success will be critical. Eventually, if the ambitious roll out of the Mission is to become a living reality, we will have to create many ‘Solar Valleys’ on the lines of the Silicon Valleys that are spurring our IT industry across the four corners of our country.
Dr. Farooq Abdullah, Union Minister, stated in his keynote: “This Mission is named after India’s first and visionary Prime Minister, Jawaharlal Nehru. For him, India’s development needed to be anchored in its mastery over cutting-edge technologies. The Solar Mission is very much in line with his vision, which has made India today, a leading nuclear and space power. He would have been equally keen and proud to see India attaining the same level of advancement in solar energy. I am confident, that under the leadership of our Hon’ble Prime Minister, Dr. Manmohan Singh, we shall make India a global solar power as well.”
The focal point, for the next three years, will be the NTPC Vidyut Vyapar Nigam (NVVN), which is the power trading arm of the NTPC. NVVN will purchase solar power at rates fixed by the Central Regulatory Electricity Commission (CERC) and for a period specified by the latter.