Bridge To India - India Solar Compas - July 2013

INDIA
SOLAR
COMPASS
July 2013 Edition
Market Dashboard
A snapshot of the
markets fundamentals
Latest Market Insights
An analysis of the policies,
projects, industry and finance
Key Question
Are tracking systems
viable in India?
Outlook
Projection for the
Indian solar PV market
BRIDGE TO INDIA, 2013
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BRIDGE TO INDIA,
2013
CONTENTS
1. Overview
01
2. Market Dashboard
02
2.1 Market Compass
02
2.2 Indian Solar Market Prices
02
2.3 Installed Capacity in India
03
3. Key Findings
4. Policies
06
4.1 National Solar Mission
06
4.2 Tamil Nadu Solar Policy
08
4.3 Andhra Pradesh Solar Policy
09
5. Projects
10
5.1 New installations (grid connected)
10
5.2 Status of on-going projects (PV)
12
5.3 Status of on-going projects (CSP)
14
6. Financing
16
7. Upstream Industry
17
8. Key question: Are tracking systems viable in

India?
19
8.1 Overview
19
8.2 Current scenario
19
8.3 Introduction to solar tracker technology
20
8.4 PV module tracker technologies
21
8.5 Comparison of tracking technologies
22
8.6 Factors influencing an investment decision
23
8.7 Financial analysis
24
8.8 Results for the financial analysis
26
8.9 Conclusion
26
9. Outlook
28
9.1 Coming quarter
28
9.2 Long-term outlook
29
10. Annexure
32
LIST OF FIGURES
Figure 2-1: Market compass
02
Figure 2-2:
02
Indian solar market prices
Figure 5-1: Grid connected solar projects installed in the previous

quarter April 1st to June 20th 2013
10
Figure 5-2: Grid connected solar projects installed in the previous

quarters not covered in any of the previous editions of
the India Solar Compass
10
Figure 6-1: A weakening Indian rupee against the US dollar
16
Figure 8-1: Solar angles with respect to a PV module installation 20

Figure 8.2: Types of PV module mounting techniques
21
Figure 8-3: Comparison of hourly generation curves with and without

trackers in Rajasthan
23
Figure 8-4: Variation in expected equity IRR for reduction

in the cost of axis tracking (as a % of the CAPEX)
26
Figure 9-1: Projected quarterly PV installations in India
28
LIST OF TABLES
Table 4-1:

Proposed schedule for allocations under batch one of

phase two of the NSM
06
Table 8-1:
Projects in India using tracking technology
19
Table 8-2:
Gain in yield for various axis tracking technologies
23
Table 8-3:
Assumptions for financial analysis
25
Table 8-4:
Variation in yield and CUF by technology
25
Table 8-5:
Variation in CAPEX by technology
25
Table 8-6:
Variation of parameters due to axis-trackers
25
Table 8-7:

Variation of generation and EIRR with fixed tilt and

trackers
26
Table 9-1:

Long term outlook of various policy based allocations

in India
30
1. OVERVIEW
The market will

eagerly awaits
allocations for a
capacity of 750 MW
under batch one
of phase two of
the National Solar
Mission (NSM).
A capacity of over 1.7

GW has already been
installed in India and
close to 1.5 GW of PV
is currently under
development. BRIDGE
TO INDIA expects that
Indias cumulative
installed capacity will
exceed 2 GW by the end
of 2013.
In the previous quarter (April 2013 to

June 2013), the Indian solar market
was predominantly focussed on new
project allocations in Tamil Nadu,
Andhra Pradesh, Uttar Pradesh,
Punjab, Rajasthan and Karnataka.
Each state allocation came with its
own set of challenges. However,
overall, they have been able to create
a significant interest from developers
and will fuel demand for components
and EPC in the next year. The signing
of Power Purchase Agreements
(PPAs) has not been completed for
most states, except Rajasthan, but it is
expected that the total signed capacity
will reach more than 1.5 GW. In the
coming weeks, the market will eagerly
await allocations for a capacity of 750
MW under the National Solar Mission
(NSM), phase two batch one, the
process for which is to begin in July.
The most worrying aspect of these
allocations has been the kind of
uncertainty that we have seen in
Andhra Pradesh and Tamil Nadu.
Both the states have had to resort
to changing the allocation process
significantly from what had originally
been communicated. In both cases,
this had been a result of a poorly
planned and executed process. On
the positive side, both states and the
developers have shown resilience and
a will to make it work. Tamil Nadu now
expects to allocate a capacity of 690
MW. In the case of Andhra Pradesh,
the arbitrary and ex-post changes in
tariff identification will hurt investor
confidence more permanently. The
state is expected to allocate a capacity
of around 300 MW as compared to the
planned 1,000 MW, even after originally
being oversubscribed.
As most prominent developers in

India have been allocated projects
under one or multiple state policies,
these allocations are also expected
to reduce the level of competition for
projects under the NSM. Adding to
this, as developers can opt for project
capacities as high as 100 MW under
the NSM, informed smaller and new
developers will most likely stay away
from the bidding based competition.
In our 'Key Question' in this edition,
we look at tracking technology.
Only about 80 MW of the 1,746 MW
solar PV capacity installed in India
is using some form of axis tracking
technology. The question we asked
was: under Indian conditions, does
an increased yield and revenue justify
the additional investment for an axis
tracking technology? We found that
at current prices, the increase in the
Equity Internal Rate of Return (EIRR)
increases only marginally when using
horizontal single axis and dual axis
tracking systems. For vertical single
axis tracking systems, the EIRR
actually decreases. Even a marginal
increase in EIRR probably does not
justify the additional risk involved in
adopting this technology. Therefore,
the low adoption of axis tracking
technology in India makes sense. In the
future, the viability of tracking systems
is expected to improve only in so far as
their cost decreases as a percentage of
the total plant cost.
A capacity of over 1.7 GW has already

been installed in India and close
to 1.5 GW of PV is currently under
development. BRIDGE TO INDIA
expects that Indias cumulative
installed capacity will exceed 2 GW
by the end of 2013. There's also a lot
The sudden influx of allocations helped of momentum building up for new
reduce the intense bidding competition capacity additions in 2014, which could
that had previously characterised the
easily exceed 2 GW. This is expected to
Indian market. Allocations in Tamil
take Indias installed solar PV capacity
Nadu and Uttar Pradesh were both
to 4 GW by the end of 2014. Until
undersubscribed and the average tariff now, 80% of Indias solar PV projects
quoted by the developers across all
have been installed in Gujarat and
allocations was more than ` 8 ( 0.12/$ Rajasthan. In future, the focus will
0.16)/kWh. This is significantly higher
shift from the West to the South (Tamil
than the tariff of ` 6.45 ( 0.10/$ 0.13)/ Nadu, Andhra Pradesh and probably
kWh, currently offered in Rajasthan.
also Karnataka).
01
NA
S
E
EM
OW
IN
GI
GR
NG
E
R
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NT
CE
MA
T
2. MARKET
DASHBOARD 2.1 MARKET COMPASS
2.2 INDIAN SOLAR MARKET PRICES

Indication
Trend
PV
Lowest FiT
` 6.45/kWh
Interst Rate
13%
Average Capex
` 68 /W
c-Si modules (China, Taiwan)
$ 0.63/W*
Thin Film modules (US and Malaysia)
$ 0.57/W*
c-Si modules (Japan, Europe)
$ 0.70/W*
Thin Film modules (Japan)
$ 0.70/W*
*$ rate has been used to avoid effect of currency fluctuations

All prices are for a reference 10MW project
All prices are without duties and taxes
Source: BRIDGE TO INDIA
02
2.3 INSTALLED
CAPACITY IN INDIA
03
3. KEY FINDINGS
POLICY
1. I n the last quarter (April 2013 to
June 2013) we have seen several
state allocations in Andhra Pradesh
and Tamil Nadu drawing close to
signing of PPAs.
2. Bidding has also been completed
in the states of Punjab and Uttar
Pradesh.
3. MNRE has now decided to go ahead
with the allocations for 750 MW
based on VGF. The bidding process
for these allocations is expected to
begin in July 2013.
4. As an off-taker for NSM projects,
SECI will be considered as a less
bankable option than NVVN.
5. MNRE recently announced that
it plans to allocate mega-size
projects, i.e., projects larger than
500 MW. The primary objective
of these projects will be to
significantly bring down the tariffs.
6. In Tamil Nadu, originally, the 52
currently selected developers had
opted for a cumulative capacity of
293 MW. Out of this, 25 developers
opted to increase their allocated
capacity. This has led to a total
allocation of 690 MW.
130 MW capacity (a 25 MW project

and a 105 MW project) allocated
to the company under the Madhya
Pradesh allocations, by August
2013.
4. Out of the 52 project developers
who have been issued a letter
of interest in Tamil Nadu, 41
developers are from Tamil Nadu
itself and most of them do not have
prior experience of solar project
development.
5. The average project size in Andhra
Pradesh is around 10 MW. The state
does not have big-ticket projects
like the ones in Tamil Nadu.
6. A majority of the capacity in Punjab
is being developed by experienced
players such as Welspun, Azure,
Essel Infraprojects, SolaireDirect,
Moser Baer, Lanco and Punj Lloyd.
7. In Uttar Pradesh, a capacity of
135 MW is likely to be allocated
to eight developers. Based on the
financial bids submitted, it is likely
that prominent developers such
as Azure Power, Moser Baer, Essel
Infra, Jakson Power and Refex
Energy will receive allocations in
the state.
8. The good news from the CSP
market is that a 50 MW CSP project
by Godawari Power has recently
been completed. The next project
to be commissioned is by Reliance
(100 MW).
7. Andhra Pradesh is now looking

to allocate a capacity of 350
MW. Of this, seven companies
with a capacity of 53 MW have
unconditionally agreed to the terms
and tariff and another 27 companies
with a capacity of 297 MW have
given their conditional acceptance.
1. In the last quarter (April 2013 to
June 2013), the Indian rupee has
lost over 10% of its value against
the US dollar. Since January 2011, it
1. Mahagenco has commissioned
has lost over 32%.
Indias single largest solar PV
FINANCING
PROJECTS
power plant in Maharashtra. This

project has a capacity of 125 MW.
2. In the last quarter (April to June
2013) 159 MW of solar PV capacity
and 50 MW of CSP capacity has
been added in India.
3. Welspun has announced that it will
be able to commission the entire
2. A weakening rupee increases the

cost of imported equipment, of
servicing un-hedged external debt
and of future currency hedging.
3. Keeping the weakening currency in
mind, the Reserve Bank of India has
now decided to hold interest rate
cuts.
04
INDUSTRY ANALYSIS
1. The US has won the DCR case
against Canada, and Canada has
had to remove its DCR regulations.
This might have an impact on other
DCR policies, including in India.
2. As per the draft guidelines, the
allocations under the NSM will be
divided into two parts : projects with
a DCR and projects without a DCR.
3. Of the 2.5 GW capacity allocations
expected in 2013 across India,
including all state policies, only
about 500 MW under the NSM is
likely to have a DCR.
4. For anti-dumping duties, the last
day for stakeholders to submit
comments and counter briefs
was 23rd April 2013. An interim
order from the anti-dumping
investigations is expected soon.
KEY QUESTION: ARE

TRACKING SYSTEMS
VIABLE IN INDIA?
1. Out of the total 1,746 MW installed
in India, only approximately 80 MW
are installed with tracking systems.
2. A seasonal tilt of modules can give
an approximate increase in yield
of 5% as compared to the standard
fixed tilt systems.
3. The use of horizontal single axis
trackers has reportedly increased
the yield of a project in Rajasthan
by 15% at an increased initial
investment of 8% for the project.
4. Well known manufacturers of dual

axis trackers claim that for dualaxis tracking systems in higher
latitudes, there can be an increase
in yield of 35% to 40% over the fixed
tilt systems.
5. According to our analysis, the
increase in EIRR is marginal while
using horizontal single axis and
dual axis tracking systems in India.
For vertical single axis tracking
systems, the EIRR actually reduces
for Indian conditions.
6. We think that the marginal increase
in EIRR does not justify the
additional costs and risk involved in
adopting tracking technology at the
current cost for tracking in India.
OUTLOOK
1. A capacity of 1.7 GW has already
been installed in India and close
to 1.5 GW of PV is currently under
development.
2. There is a lot of momentum
building up for new capacity
additions in 2014, which could
easily exceed 2 GW.
3. A capacity of 750MW is expected
to be allocated under the NSM this
year. As the process is expected to
start in July 2013 with PPAs signed
only by October 2013, we do not
expect any capacity addition in the
next four quarters under the NSM.
05
Tamil Nadu and Uttar

Pradesh bids were
undersubscribed,
bringing the
effectiveness of the
competitive bidding
process under
question.
The highest bid in

Uttar Pradesh is at
` 15 ( 0.23/$ 0.30)/
kWh, which is double
that of what most other
policies are offering.
In the last quarter (April 2013 to June

2013), we have seen several state
allocations in Andhra Pradesh and
Tamil Nadu drawing close to signing
of Power Purchase Agreements (PPA)
after several ups and downs and a lot
of confusion. Bidding has also been
completed in the states of Punjab
and Uttar Pradesh. Due to the ample
availability of projects, the bids were
not as competitive. As we have seen
in the past, developers in all states
quoted an average tariff of over ` 8
( 0.12/$ 0.16)/kWh. The states were
not ready for this kind of a response
and Tamil Nadu and Andhra Pradesh
chose to alter the allocation process
to try and keep the developers
interested without going overboard
with their anticipated budgets.
Tamil Nadu and Uttar Pradesh bids
were undersubscribed, bringing
the effectiveness of the competitive
bidding process under question. With
the highest bid in Uttar Pradesh at ` 15
( 0.23/$ 0.30)/kWh, which is double
that of what most other policies are
offering, it remains to be seen if Uttar
Pradesh will also alter the allocation
process to ensure that it does not end
up signing the PPA at this tariff.
4.1 NATIONAL
SOLAR MISSION
The draft guidelines for phase two
of the National Solar Mission (NSM)
were published by the Ministry of
New and Renewable Energy (MNRE)
on December 3rd 20121. According to
the draft policy, the MNRE wanted to
allocate 800 MW through a bundling
of power mechanism (as in phase one
of the NSM) and 750 MW through a
VGF2 mechanism. For a large part of
the first quarter (January to March
2013), the MNRE had been trying to
arrange for unallocated power from
the Ministry of Power (MoP) to carry
out the tariff based bidding component
of allocations based on bundling of
power3. However, as there is only a
limited amount of unallocated power
available and all states demand access
to this power, the MoP has been
unwilling to provide it. As a result, the
MNRE has now decided to go ahead
only with the allocations for just 750
MW based on VGF. The bidding process
for these allocations is expected to
begin in July 2013.
Table 4.1 Proposed schedule for allocations under batch one of

phase two of the NSM
Event
Schedule
Notice for the Request for

Selection (RfS)
Zero date
(expected in July 2013)
Submission of applications and

techno-commercial bid opening
Zero date + 30 days
Short-listing of bidders based

on techno-commercial eligibility
and opening of financial bid
Zero date + 60 days
Evaluation of financial bids and

issue of the Letter of Intent (LoI)
Zero date + 90 days
PPA signing
Zero date + 120 days
Financial closure
Six months from the date of signing the PPA
Commissioning
13 months from the date of signing the PPA
---------------------1
Draft policy document: Phase two of the National Solar Mission (NSM)
2
Refer to the October 2012 edition of the India Solar Compass
3
Refer to the January 2013 edition of the India Solar Compass
06
4. POLICIES
Unlike its predecessor,

SECI is not an AAA
rated company and will
be considered as a less
bankable option.
A key concern with

the VGF is its impact
on the long term
performance of
projects.
The draft methodology for the VGF

based bidding process was released
in May 20134. The allocation process,
signing of PPAs and handing out of VGF
will all be handled by the Solar Energy
Corporation of India (SECI). According
to the draft, a fixed tariff of ` 5.45 (
0.08/$ 0.11)/kWh will be awarded
to projects not availing accelerated
depreciation and a fixed tariff of ` 4.95
( 0.07/$ 0.10)/kWh will be awarded
to projects availing accelerated
depreciation. Over and above this, VGF
will be provided with an upper limit
of 30% of the project cost or ` 25m
( 384,615/$ 500,000)/MW. The exact
quantum of VGF will be determined by
a reverse bidding mechanism.
SECI is expected to sign separate
power sale agreements with various
state power distribution companies
across India. In the past, the solar
power from NSM projects has been
sold to the states in which projects
are located. More than 80% of all NSM
projects under phase one (batch one
and two) will be located in Rajasthan.
As Rajasthan is already meeting its
solar Renewable Purchase Obligation
(RPO), it is unlikely that the state will
continue to buy power from the NSM
projects. Rajasthan has land and high
irradiation and is therefore attractive
for projects under phase two as well.
SECI, however, will need to devise a
way to sell power outside of the state.
projects for short term gains (refer

to the October 2012 edition of the
India Solar Compass to read more on
VGF). The MNRE has provided some
safeguards to prevent this. As per the
draft guidelines, it has been decided
that a hand-out of the VGF amount
will take place in three installments.
The first installment of 25% will be
handed out after the delivery of at
least 50% of the equipment, another
50% will be handed out on successful
commissioning of the project and
the remaining 25% will be handed
out after one year of successful
commissioning. The draft also says
that if the plant fails to generate any
power continuously for one year during
the course of the PPA period or the
project is dismantled or its assets sold,
SECI will have the right to claim assets
equal to the value of VGF granted.
However, no real safeguards have
been provided to ensure the plant's
performance in the long run. In the
current scenario, the developers will
place greater focus on reducing the
capital expenditure (CAPEX) than on
optimizing plant performance.
As per the draft methodology, the

maximum aggregated capacity that
a company can bid for under batch
one of phase two of the NSM is 100
MW. However, the MNRE also recently
announced that it plans to allocate
mega-size projects, i.e., projects
larger than 500 MW. The primary
Unlike its predecessor in phase
objective of these projects will be to
one, the National Thermal Power
significantly bring down the tariffs.
Corporation Vidyut Vyapar Nigam
The timeline or methodology for
(NTPC NVVN), SECI is not an AAA rated such allocations has not yet been
company and will be considered as a
announced.
less bankable option. To counteract
that SECI plans to set up a payment
In the last quarter, the SECI has
guarantee fund to cover three months
also carried out the second round of
of payments. For this, it will primarily
biddings for the implementation of
depend on the National Clean Energy
large scale, grid connected rooftop
Fund (NCEF).
photovoltaic (PV) systems ranging
from 100 kWp to 500 kWp for a total
A key concern with regards to the
allocation of 11.1 MW. The projects
implementation of the VGF is its
will be spread across the cities of
impact on the long term performance
Bhubaneswar/Cuttack (1 MW) in
of projects and the scope for
Odisha, Gurgaon (1.5 MW) in Haryana,
developers to execute low quality
Hyderabad (2 MW) in Andhra Pradesh,
---------------------4
Link: Draft methodology for allocations under batch one of phase two of the NSM
07
Under Under the new

mechanism, the bidder
quotes a consolidated
cost in `/Wp terms for
providing a turnkey
solution. Based on
this bid price, SECI
will provide a capital
subsidy of 30% to the
winners.
Jaipur (3.1 MW) in Rajasthan, Noida/

Greater Noida (1.5 MW) in Uttar
Pradesh and Raipur/Naya Raipur (2
MW) in Chhattisgarh. A developer
can apply for multiple projects for a
minimum allocation of 250 kWp and a
maximum of 2 MWp. SECI has released
the RfS document on 1st May 2013. The
pre-bid meeting was held on May 8th
2013 in Delhi and the last date for the
submission of bids was May 30th 2013.
rooftop owner first, after which any

excess power can be exported to the
grid.
According to BRIDGE TO INDIA, the

new allocation process holds the
potential to improve on the existing
process for disbursing the MNRE
subsidy as (a) it is competitive, which
means that the cost to the government
exchequer will be minimized; and (b)
the disbursement of the subsidy is tied
The rooftop PV allocations are different to the performance of the plant, which
from most policy-based allocations
will ensure that the subsidy is released
in that there is no Feed-in-Tariff (FiT)
only for well executed projects. If
offered. Instead, SECI will provide a
SECI can allocate such subsidy-based
capital subsidy of 30%. This is similar
projects on a monthly basis and not
to the off-grid capital subsidy scheme
limit the allocations to some particular
of the MNRE. The scope of work for
cities, the process can become an
bidder includes the identification
effective and transparent replacement
and leasing of buildings suitable for
of the existing MNRE capital subsidy.
rooftop plants. Bidders also need
to obtain No Objection Certificates
(NOCs) from the relevant distribution
company (DISCOM) for connecting the
projects to the grid. In addition, bidders
In December 2012, Tamil Nadu had
are responsible for the complete
announced a bidding process for a
design, engineering, manufacturing,
capacity allocation of 1,000 MW. Issues
supply, storage, civil work, erection,
such as low bankability of the PPA,
testing and commissioning of the grid
limited time available for planning
connected rooftop solar PV project,
and commissioning and the need
including operation and maintenance
for developers to meet the lowest
(O&M) for a period of two years after
quoted tariff (L1 tariff) for successful
commissioning of the plant.
allocation caused the allocations
Under the new mechanism, the bidder to be undersubscribed. Bids were
quotes a consolidated cost in `/Wp
received for only 499 MW. Developers
terms for providing a turnkey solution. were subsequently asked to meet the
Based on this bid price, SECI will
lowest submitted tariff which came
provide a capital subsidy of 30% to
out at ` 5.97 ( 0.09/$ 0.12)/kWh with
the winners. The disbursement of the
an escalation of 5% per year for 10
subsidy is linked to the performance
years an unattractive tariff for most
of the plants: 20% will be disbursed at developers. To avoid a failure of the
the time of commissioning after the
process, the state then decided to
project can prove a performance ratio
offer a workable tariff of ` 6.48 (
of a minimum of 75%. A further 5%
0.10/$ 0.13)/kWh with an escalation
will be disbursed at the end of the first of 5% per year for 10 years. Even
year, and another 5% at the end of the
at this tariff, initially, interest was
second year of generation of the plant, limited. In February 2013, the Tamil
if the project can prove a minimum
Nadu Generation and Distribution
Capacity Utilization Factor (CUF) of
Corporation (TANGEDCO) cleared
15% for the two years.
proposals for the first batch of bidders
with a cumulative capacity of 226 MW.
The sale of power and the negotiation
of the tariff is the developers
Due to the poor response, TANGEDCO
responsibility. The generated power
provided additional time until May
is expected to be consumed by the
31st 2013 to developers who originally
4.2 TAMIL NADU

SOLAR POLICY
If SECI can allocate

subsidy-based projects
on a monthly basis and
not limit allocations
to particular cities,
the process can
become an effective
and transparent
replacement of the
existing MNRE capital
subsidy.
08
In Tamil Nadu, the 52

currently selected
developers had opted
for a cumulative
capacity of 293 MW. Out
of this 25 developers
opted to increase their
allocated capacity. This
led to a total allocation
of 690 MW.
The L1 tariff was

quoted by SunBorne
Energy for a 5 MW
project with ` 6.49 (
0.10/$ 0.13)/kWh.
chose not to accept the offered tariff

and PPA terms. Some new developers
expressed interest and many of the
existing developers submitted their
proposal to increase the capacity
allocated to them. Originally, the 52
currently selected developers had
opted for a cumulative capacity of 293
MW. Out of this 25 developers opted to
increase their allocated capacity (read
the projects section to know more).
This led to a total allocation of 690 MW.
No specific changes have been made
to the PPA or any other term for
agreement that make these projects
more bankable. Under the bidding
process, the maximum capacity
for project size was limited by the
evacuation capacity listed for each
district in a list put out by the Tamil
Nadu Energy Development Authority
(TEDA). Based on that, most projects
were planned for a capacity between
1 MW and 10 MW with just one
project that was as large as 50 MW.
However, the newer projects had
enough time to scout for evacuation
capacity on their own. The larger
capacity has potentially made these
projects financially feasible for the
developers. Other key reasons for the
new response could be availability of
more planning and commissioning
time and no uncertainty with regards to
tariff determination through a bidding
process.
Apart from this, new interests
were also invited through a public
advertisement. All new interests were
to be made to the Chief Engineer
(CE) at TANGEDCO. Companies such
as Reliance Power and Shinsung
Solar Energy (Korea) are known to
have submitted their proposals. The
capacity allocated to these projects, if
any, will be over and above the current
690 MW allocated capacity.
4.3 ANDHRA
PRADESH SOLAR
POLICY
Like Tamil Nadu, Andhra Pradesh has
also planned an L1 process for the
final tariff determination but in Andhra
Pradeshs case, the lowest bid is to be
considered at the substation level as
compared to the state wise L1 in Tamil
Nadu. (This takes into account different
land costs and irradiation levels
across the state.) Based on this, 330
companies participated in the bidding
process and bid for a cumulative
capacity of 1,712 MW. However, in a
sudden change of process, after the
bidding process was complete, the
state last week announced that it could
only offer the overall L1 tariff across
the state instead of the substation
level L1 tariff. This meant that all
developers, irrespective of their project
size and location were offered the
same tariff. The L1 tariff was quoted by
SunBorne Energy for a 5 MW project
with ` 6.49 ( 0.10/$ 0.13)/kWh. The
states cabinet sub-committee on
power fixed this benchmark price at its
meeting on April 23rd 2013.
At this tariff, the state is now looking
to allocate a capacity of 350 MW. Of
this, seven companies with a capacity
of 53 MW have unconditionally agreed
to the terms and tariff and another
27 companies with a capacity of 297
MW have given their conditional
acceptance.
Andhra Pradesh also allowed
developers to re-negotiate the capacity.
However, unlike in Tamil Nadu, where
25 developers chose to increase
their allocation capacity, only three
developers chose to increase their
allocated capacity while six developers
chose to decrease their allocated
capacity (read the projects section of
this report for more analysis).
09
5. PROJECTS 5.1 NEW INSTALLATIONS (GRID

CONNECTED)
Figure 5-1: Grid connected solar projects installed in the previous quarter (April 1st to June 20th
2013)
Size - 125 MW
Technology - PV
Off-take - Captive RPO
Developer - Mahagenco
ANDHRA
PRADESH
Size - 20 MW
Technology - PV
Off-take--Third-party
Industrial sale
captive
Off-take
of power
Developer--EMMVEE
EMMVEE
Developer
Size - 50 MW
Technology - CSP
Off-take - NSM Phase 1, Batch
Developer - Godavari Green
Energy
MAHARASHTRA
RAJASTHAN
JHARKHAND
Figure 5-2: Grid connected solar projects installed in the previous quarters, that were not
covered in previous editions of the India Solar Compass
GUJARAT
Size - 2 MW
Technology - PV
access + RECs
Off-take -APPC/Open
REC Mechanism
Developer - Deepak Spinners
Size - 5 MW
Technology - PV
Off-take - State policy
Developer - Avatar Solar
Size - 0.5 MW
Technology - PV
access + RECs
Off-take -APPC/Open
REC Mechanism
Developer - M/S Gupta Sons
Size - 23 MW
Technology - PV
Off-take - State policy
Developer - Ujjawala Power
Private Limited
Size - 1 MW
Technology - PV
access + RECs
Off-take - APPC/Open
REC Mechanism
Developer - Omega Renk
Bearing
Island Electrification
TAMIL
NADU
TAMIL
NADU
UTTAR
PRADESH
Size - 5 MW
Technology - PV
Off-take - State RPO
Developer - NTPC
Size - 1 MW
Technology - PV
Off-take - RPSSGP
Developer - Noel Media and
Advertising Pvt. Ltd.
Size - 1 MW
Technology - PV
access + RECs
REC Mechanism
Developer - Star Delta Transformers
ANDAMAN
ANDAMAN
& NICOBAR
& NICOBAR
MADHYA
PRADESH
Size - 1 MW
Technology - PV
Off-take - REC Mechanism
Developer - SWELECT Energy
Systems Limited
10
RAJASTHAN
Size - 2.5 MW
Technology - PV
access + RECs
REC Mechanism
Developer - BMD
Size - 3 MW
Technology - PV
access + RECs
REC Mechanism
Developer - KC (India)
Size - 1 MW
Technology - PV
access + RECs
REC Mechanism
Developer - Chartered Global
Financial Services
Size - 1 MW
Technology - PV
access + RECs
REC Mechanism
Developer - Dindyal Commodities
Size - 15 MW
Technology - PV
access + RECs
REC Mechanism
Developer - DJ Malpani
Size - 1.5 MW
Technology - PV
access + RECs
REC Mechanism
Developer - Impact Solar
Size - 10 MW
Technology - PV
access
+ RECs
NSM Phase
1, Batch
2
Developer - Jakson Power
(Allocation 1)
Size - 1 MW
Technology - PV
access + RECs
REC Mechanism
Developer - Raj Overseas
Size - 2 MW
Technology - PV
access + RECs
REC Mechanism
Developer - Rajasthan Patrika
Size - 2 MW
Technology - PV
access + RECs
REC Mechanism
Developer - Lahoti Overseas
Size - 10 MW
Technology - PV
access
+ RECs
NSM Phase
1, Batch
2
Developer - Sai Maithili Power
Company
Size - 10 MW
Technology - PV
access
+ RECs
NSM Phase
1, Batch
2
Developer - LEPL Projects
Size - 2 MW
Technology - PV
access + RECs
REC Mechanism
Developer - Sanjeev Prakashan
Size - 10 MW
Technology - PV
access
+ RECs
NSM Phase
1, Batch
2
Developer - Lexicon Vanijya
Size - 5 MW
Technology - PV
access
+ RECs
NSM Phase
1, Batch
2
Developer - Sunborne Energy
Services
Size - 10 MW
Technology - PV
access
+ RECs
NSM Phase
1, Batch
2
Developer - NVR Infrastructure
Size - 5 MW
Technology - PV
access
+ RECs
NSM Phase
1, Batch
2
Developer - Pokaran Solaire
Energy
Size - 10 MW
Technology - PV
access
+ RECs
NSM Phase
1, Batch
2
Developer - Symphony Vyapar
Size - 10 MW
Technology - PV
access
+ RECs
NSM Phase
1, Batch
2
Developer - Jakson Power
(Allocation 2)
Size - 1 MW
Technology - PV
access + RECs
REC Mechanism
Developer - Aman Home Appliance
Size - 1 MW
Technology - PV
access + RECs
REC Mechanism
Developer - Vinay Corporartion
In the last quarter (April to June

2013), 159 MW of solar PV capacity
has been added in India through
just three new projects. The largest
capacity addition of 125 MW was
achieved in Maharashtra through a
single project by Mahagenco. A 20 MW
project for third-party sale of power
has come up in Andhra Pradesh. The

remaining capacity of 14 MW has been
added in Jharkhand through a single
project. This project has been funded
by a central grant given to the state
specifically for this project that will
provide power to Jharkhands rural and
Naxal5 -affected areas.
---------------------5
Naxal, Naxalite and Naksalvadi are generic terms used to refer to various militant communist
groups operating in different parts of India under different organizational envelopes. They are
mostly concentrated in the eastern states of the mainland India (Chhattisgarh, Jharkhand, West
Bengal and Odisha).
11
A capacity of 225 MW
had been allocated in
Madhya Pradesh in
May/June 2012.
With the capacity additions in the last

quarter, India has reached a total
installed solar PV capcity of 1,746 MW.
rainfall, projects that have not begun

the construction work early, might
struggle to commission on time.
A 50 MW Concentrated Solar
Power (CSP) project has also been
commissioned in Rajasthan in the last
quarter. This is the only CSP project
to have come up under the NSM
allocation till date. It takes Indias total
installed capacity for CSP to 55.5 MW.
Rajasthan
5.2 STATUS OF ONGOING PROJECTS

(PV)
Madhya Pradesh
Karnataka is
experiencing excess
rainfall, projects that
have not begun the
construction work
early, might struggle
to commission on time.
A capacity of 225 MW had been

allocated in Madhya Pradesh in May/
June 2012. Projects were awarded to
Acme Telepower (25 MW), Alpha Infra
Properties (20 MW), MK Solar (25 MW),
Moser Baer (25 MW) and Welspun (25
MW and 105 MW). The 25 MW projects
had to be commissioned by June
2013. The 105 MW project by Welspun
has June 2014 as the commissioning
deadline.
None of the 25 MW projects have been
commissioned as of 20th June 2013.
In May 2013, Welspun had announced
that it will be able to commission
the entire 130 MW capacity (a 25 MW
project and a 105 MW project) by
August 2013, which is significantly
ahead of the June 2014 deadline for
its 105 MW project. It is expected
that Welspun will opt for a part
commissioning of its 25 MW capacity to
avoid delays for this project.
Karnataka
Karnataka had allocated 60MW of solar
PV capacity in April 2012. The projects
were allocated to Essel Infrastructure
(10 MW), GKC Projects (10 MW), Helena
Power (10 MW), Jindal Aluminium(10
MW),SaiSudhir Energy (10 MW), United
Telecom (3 MW) and Welspun (7 MW).
Projects are to be commissioned no
later than October 2013. Given that the
deadline is right after the monsoons
and Karnataka is experiencing excess
The financial bids for an allocation

of 100 MW of solar PV projects in
Rajasthan were opened on February
11th 2013. A total of 25 bids worth
over 200 MW had been received. The
lowest bid had been submitted at `
6.45 ( 0.10/$ 0.13)/kWh by Essel
Mining and Industries Ltd.Other
bidders were asked to meet this tariff.
Based on this process, an allocation
of 75 MW has since been announced
by the Rajasthan Renewable Energy
Corporation Limited (RRECL). These
projects include Essel Mining and
Industries (20 MW), Sidhidata Solar
Urja (5 MW), Arjun Green Power
(5 MW), Star Solar Power (5 MW),
Sungold Energy (5 MW), Energo
Engineering Projects (10 MW) and
Roha Dyechem (25 MW).
Essel Mining Industries and Roha
Dyechem have previously developed
projects in India while the remaining
are first time developers.
All these projects are to come up
in the Bhadla solar park, Jodhpur,
demarcated by Rajasthan Solarpark
Development Company Limited,
(a subsidiary of RRECL). The park
will provide a common evacuation
infrastructure for all the projects.
The planned time period for
commissioning of these projects is 12
months from the date of signing of the
PPAs. This means that these projects
would have to achieve financial
closure by the end of 2013 to then be
commissioned by May 2014.
Tamil Nadu
In Tamil Nadu, 52 project developers
have been issued an LoI for setting up
a cumulative capacity of 690 MW under
the state solar policy. As mentioned
in the policies section, 25 developers
chose to increase their allocation
capacity from the earlier capacity that
they had bid for (read the policy section
12
In Tamil Nadu,
given the poor
bankability of the offtaker, most projects
are likely to be
financed by recourse.
of this report to know more about the

allocation process and the reasons for
increase in the allocation capacity).
Mohan Breweries & Distilleries, a
project developer from Tamil Nadu,
has increased its capacity from 10 MW
to 110 MW. Similarly, Welspun doubled
its allocation capacity from 30 MW to
60 MW and United Telecoms increased
its allocation capacity from 5 MW to
100 MW.
Out of the 52 project developers who
have been issued an LoI, 41 developers
are from Tamil Nadu itself, most of
whom do not have prior experience
of solar project development. Lack
of previous project development
experience is expected to lead to sales
and contracts being driven primarily
with a focus to reduce capital costs and
we can expect a time delay and a substandard project execution for some
projects.
Given the poor bankability of the offtaker, most projects are likely to be
financed by recourse.
Engineering,
Procurement and
Construction (EPC)
companies will get
very limited access
to project capacities
in Punjab as most of
the developers are
likely to do the EPC
work in-house.
Andhra Pradesh
In Andhra Pradesh, seven project
developers with a cumulative capacity
of 53 MW have unconditionally
accepted the tariff and terms of the
PPA. These projects are by developers
such as Enerparc from Germany (5
MW), SunBorne Energy (5 MW) and
Essel Mining and Industries (35 MW)
and a number of smaller, first time
project developers.
Apart from this, 27 projects with a
cumulative capacity of 297 MW have
conditionally accepted the terms
of agreement. These projects have
requested for a change in conditions
such as a change in location, an
increase or decrease in capacity and
in some cases, even an increase in
tariffs, if possible. It is expected that
some of these projects will not end up
signing the PPA. Five developers, who
account for eight projects out of these
27 projects, have previous project
development experience and, like
Tamil Nadu, the remaining developers
are first-time developers. The financial

viability of projects in Andhra Pradesh
is significantly lower than that in Tamil
Nadu as. Unlike Tamil Nadu, Andhra
Pradesh is not offering an escalation in
tariffs.
The average project size in Andhra
Pradesh is around 10 MW and the state
does not have big-ticket projects like
the ones in Tamil Nadu. In the wake
of the weakening Indian rupee against
the US dollar, projects, especially of
capacities under 5 MW, that are not
availing accelerated depreciation are
unlikely to be financially viable at the
tariff of ` 6.49 ( 0.10/$ 0.13)/kWh
(read the financing section of this
report to understand this better).
Like in Tamil Nadu, a lack of previous
project development experience is
expected to lead to sales and contracts
being driven primarily with a focus
to reduce capital costs and we can
expect a time delay and a sub-standard
project execution for some projects.
Punjab
A capacity of 250 MW is likely to be
allocated under the Punjab policy to
27 developers. The average project
size per developer in the state is 13
MW but most projects are between
1 MW and 4 MW. Unlike Tamil Nadu
and Andhra Pradesh, a majority of the
capacity in Punjab is being developed
by experienced players such as
Welspun, Azure, Essel Infraprojects,
SolaireDirect, Moser Baer, Lanco and
Punj Lloyd. The tariffs in the state are
also financially more feasible: The
lowest tariff in the state is ` 7.20 (
0.11/$ 0.14)/kWh and the average tariff
across the selected projects is ` 8.22
( 0.13/$ 0.16)/kWh. These tariffs are
without any escalation and for a period
of 25 years.
Engineering, Procurement and
Construction (EPC) companies will
get very limited access to project
capacities in Punjab as most of the
developers are likely do the EPC work
in-house. Due to the high land costs in
the state, it is likely that most projects
13
would opt for the more efficient

crystalline module technology over
thin-film technology.
projects will now begin looking
Like in Punjab, tariffs These
for finance and are expected to be
in Uttar Pradesh are commissioned by July 2014.
also likely to be high,
with an average tariff Uttar Pradesh
of over ` 8 ( 0.12/$ In Uttar Pradesh, a capacity of 135
MW is likely to be allocated to eight
0.16)/kWh. The tariffs developers. Given the condition for
in Uttar Pradesh are previous project experience in the
all the developers are likely to be
without any escalation state,
known solar players.
and for a period of 12
on the financial bids submitted,
years. Based
it is likely that prominent developers
such as Azure Power, Moser Baer,
Essel Infraprojects, Jakson Power and
Refex Energy will receive allocations in
the state.
Tariffs being offered

for third-party sale in
Madhya Pradesh are
around ` 4.5
( 0.07/$ 0.09)/kWh.
These projects rely
heavily on accelerated
depreciation and
revenue through the
sale of RECs until 2017.
Like in Punjab, tariffs in Uttar Pradesh

are also likely to be high, with an
average tariff of over ` 8 ( 0.12/$
0.16)/kWh. The tariffs in Uttar Pradesh
are without any escalation and for a
period of 12 years (read more about the
shorter PPA time period in the June
edition of the India Solar Handbook).
Most of the capacity in Uttar Pradesh
will be allocated to the developers who
would be undertaking the EPC work
in-house.
Given that in both Punjab and Uttar
Pradesh most projects have been
allocated to the developers who will
carry out the EPC work in-house, EPC
providers looking to bag contracts
should focus on the south Indian
states of Tamil Nadu and Andhra
Pradesh. Projects in these states are
evenly distributed among developers
with varied experience and in-house
capabilities.
Third-party sale of power

with REC benefits
In the first two quarters of 2013, the
capacity of REC based projects has
gone up from 2.5 MW to 85 MW. While
a significant part of this capacity is still
based on sale of power at the average
pooled purchase cost (APPC), most

of the new capacity that is now being
added is for third-party sale of power,
typically to industrial consumers. The
power for such agreements is being
sold at tariffs between ` 4 ( 0.06/$
0.08)/kWh to ` 6.5 ( 0.10/$ 0.13)/kWh.
A large part of new planned capacities
under this business model is expected
to come up in Madhya Pradesh, Andhra
Pradesh and Tamil Nadu.
Madhya Pradesh, with one of the
lowest open access (and related)
charges, has already seen an
installation of five projects with a
cumulative capacity of 6.5 MW under
this business model. Tariffs being
offered for third-party sale in Madhya
Pradesh are around ` 4.5 ( 0.07/$
0.09)/kWh. These projects rely heavily
on accelerated depreciation and
revenue through the sale of RECs
until 2017. Failure to sell a significant
portion of the RECs until 2017 can
make these projects unviable at the
given tariffs.
Several such projects are being
planned across various states in
India. According to market sources,
developers such as Kiran Energy,
SunEdison, Moser Baer and Welspun
are keen on the market for third-party
sale of power. First Solar has also
announced that it is looking to develop
such projects in India. In the past, we
have already seen projects by M&B
Switchgear in Madhya Pradesh and
EMMVEE in Andhra Pradesh selling
power directly to industrial consumers.
5.3 STATUS OF ONGOING PROJECTS

(CSP)
The MNRE has decided to defer the
penalties that are to be levied on the
delayed solar thermal (CSP) projects
by 10 months. A capacity of 470 MW
was allocated under phase one of the
NSM in December 2010 and these
projects were to be commissioned
in May 2013. However, none of the
projects have met this deadline.
14
Under phase two of

the NSM, it is expected
that a capacity of 1,080
MW will be allocated
for new CSP projects in
2014.
A 50 MW project by Godawari Power

has recently been completed. The
next project to be commissioned is by
Reliance (100 MW), which is expected
to be commissioned in the next couple
of months.
Some of the common reasons cited
by project developers for not meeting
the deadline are: a delay in laying
of a water pipeline by the Rajasthan
government, delays in procurement
of heat transfer fluid (HTF) and other
components for the plant and delays in
achieving financial closure. However,
according to industry sources, the
main, unstated cause of delay is the
incorrect solar resource assessment
for the projects at the time of planning.
The extension is likely to allow some
projects that had been delayed due to
reasons such as delay in procurement
of HTF or delay in getting water are
likely to come up. Other projects are
expected to be cancelled.
Under phase two of the NSM, it is

expected that a capacity of 1,080
MW will be allocated for new CSP
projects in 2014. The new process
will draw from the learning of the 470
MW projects of the phase one. The
complexity of setting up CSP plants has
been systematically underestimated
so far. It is unlikely that these issues
will be resolved and lessons will be
learnt by 2014, especially considering
that the previous projects would have
just come up (if at all). Given the issues
that the developers have faced in the
first phase of the allocations, interest
for the new project allocations, if they
happen next year, is expected to be
fairly low.
15
62
60
58
56
54
52
50
48
46
44
42
40
Exchange
USDagainst
vs INRthe US dollar
Figure 6-1: A
weakening rate
Indian-rupee
Jul-13
Apr-13
Jan-13
Oct-12
Jul-12
Apr-12
Jan-12
Oct-11
Jul-11
INR/USD
Apr-11
The prices for

international modules,
which account for
most of the imported
equipment in Indian
projects, have more or
less stabilized over the
past quarter.
Telepower, Azure Power, Mahindra

Solar, Reliance, Punj Lloyd, Tatith Solar
Energy and Universal Solar Systems
are known to have worked with
international financing. Some projects
currently under operation, specifically
those under the batch one of phase
one of the NSM and those under the
Gujarat solar policy, are known to be
operating without a currency hedge.
For these projects, the principal and
The prices for international modules,
interest payments are to be made
which account for most of the imported in the currency of the loan and the
equipment in Indian projects, have
revenue is in the weakening Indian
more or less stabilized over the past
rupee. This nullifies the cost advantage
quarter. However, the continuing
they enjoyed through a lower cost of
weakening of the Indian currency is
capital. Developers looking to avail
now expected to lead to an increase
finance in any international currency
in the cost of imported equipment in
often hedge against such currency
rupee terms. Considering a per MW
risk.
capital cost of ` 70m ( 1.07 m/$ 1.4
m) and assuming that 45% of the
Many developers thought that the
project cost is from imported material, rupee was already at an all-time low
the project cost in India should have
back in 2012, when the currency hit `
directly increased by approximately
50 per $ and thus decided against fully
` 3m ( 46,153/$ 60,000)/MW in the
hedging an international debt.The alllast quarter just because of the rupee
time low rhetoric has been there since
depreciation.
and from there we have seen a further
downturn to ` 55 per $ and now to ` 60
A capacity of over 1.5 GW is expected to per $.
be allocated in the states of Rajasthan,
Tamil Nadu, Andhra Pradesh, Punjab
Keeping the weakening currency in
and Uttar Pradesh. The weak rupee
mind, the Reserve Bank of India has
is likely to impair the viability of these
now decided to put a hold on interest
projects.
rate cuts. Due to this, on one hand,
the developers will be wary to opt for
A capacity of more than 300 MW in
international debt because the rupee
India has been financed using cheaper depreciation is not halting and on the
international debt. Developers such
other hand, the cost of debt is expected
as Green Infra, Mahindra Solar,
to remain high in the domestic market.
Azure Power, SunEdison India, Acme
Jan-11
For the Indian solar

market, a weakening
rupee has a severe
impact as it increases
the cost of imported
equipment, of servicing
of un-hedged external
debt and of future
currency hedging.
In the last quarter (April 2013 to June

2013), the Indian rupee has lost over
10% of its value against the US dollar.
Since 2011, it has lost over 32% of its
value. For the Indian solar market, a
weakening rupee has a severe impact
as it increases the cost of imported
equipment, of servicing of un-hedged
external debt and of future currency
hedging.
Value of 1 USD in INR
6. FINANCING
16
7. UPSTREAM
INDUSTRY
The DCR will be
extended to thin film
modules for phase two
of the NSM.
Of the 2.5 GW capacity

allocations expected
in 2013 across India,
only about 500 MW are
likely have a DCR.
India currently has close to 2 GW

of module manufacturing capacity,
including Moser Baers 200 MW of
thin-film capacity. Much of this 2
GW capacity is underutilized.Many
Indian manufacturers are not able to
offer prices competitive with leading
global manufacturers, primarily from
China. The MNRE has been trying
to promote domestic manufacturing
by enforcing a Domestic Content
Requirement (DCR) on projects being
set up under the NSM. The MNRE
hopes that such protection from
international competition will give
Indian manufacturers room to grow
and become competitive.
In February 2013, the US filed a
complaint with the World Trade
Organization (WTO) against DCR under
the NSM. Similarly, the US had earlier
filed a case against Canadas DCR
for renewable energy projects in its
Ontario program. The US has won the
case and Canada has had to remove
its DCR regulations. Even though India
is concerned about a pending WTO
decision, it is expected to go ahead
with DCR for projects allocated under
batch one of phase two of the NSM. As
per the draft guidelines, the allocations
will be divided into two parts. Project
developers will have the option to
either bid for projects with DCR or
to bid for projects without a DCR. In
April 2013, a senior official had made
a statement that 500 MW of the 750
MW would not have a DCR, leaving 250
MW with a DCR. In a recent statement
in June 2013, Dr. Farooq Abdullah,
the Minister for New and Renewable
Energy, stated that the DCR component
would likely be 75%. Final clarity on
the subject is still pending. However, it
is clear that this time the DCR will be
extended to thin film modules as well.
Of the 2.5 GW capacity allocations
expected in 2013 across India (refer
to the outlook section of this report to
read more), including all state policies,
only about 500 MW are likely to have
a DCR. This in itself will not suffice to
change the fortunes of the existing 2
GW manufacturing capacity in India.

Given that the DCR will extend to
cells, only the manufacturers with cell
manufacturing capability are expected
to benefit. In India, only eight out of
the 21 manufacturers have a cell
manufacturing capability.
Given the uncertainties about
implementation and extent of the DCR,
Indian manufacturers have explored
a further regulatory route: they have
filed an anti-dumping petition with the
Directorate General of Anti-Dumping
Duties (DGAD) under the Ministry
of Commerce for the imposition of
anti-dumping duties on Chinese,
American, Malaysian and Taiwanese
suppliers (read a complete analysis
of anti-dumping duties and its impact
on the Indian solar market in the
January 2013 edition of the India Solar
Compass).
The last day for stakeholders to submit
comments and counter briefs was
23rd April 2013. An interim order from
the anti-dumping investigations is
expected soon.
Europe has recently imposed a duty
of 11.8% on imports of all Chinese
solar products. The duty is set until
August 6th, after which it will increase
to 47.6%. The European Commission
defined this percentage as the level
required to remove the harm caused
by the dumping to the European
manufacturing industry.
Like in Europe, suppliers in India are
also expecting an interim duty for
six months, followed by a final duty.
If anti-dumping duties are enforced,
they will have a severe impact on
the financial viability of all recently
allocated projects, including those in
Tamil Nadu, Andhra Pradesh, Punjab
and Uttar Pradesh. Developers have
planned with a low pre-duty price
of imported modules at the time
of bidding (to read more on how it
will impact these projects, read the
January edition of the Indian Solar
Compass).
17
As a means to sell their

modules and keep
the production lines
running, many Indian
module manufacturers
have integrated
downstream into
providing EPC services.
The largest manufacturing capacity

in India is by Moser Baer of around
250 MW as compared to several
manufacturers in China who are
operating a capacity of over 2 GW
a year. In the current scenario, a
lower capacity utilization of plants
in India, at under 15%, has reduced
the volumes further for the domestic
manufacturers and made it even
more difficult for them to compete
with leading Chinese manufacturers
who are operating at more than 10
times the volumes. With often hefty
loan repayments and dwindling
company finances, there has been
little or no room for investments into

upgrading manufacturing capabilities
and improving competitiveness. As
a means to sell their modules and
keep the production lines running,
many Indian module manufacturers
have integrated downstream into
providing EPC services or even
development of projects. Even though
the EPC segment has low margins, the
manufacturers are sometimes able
to sell their own modules and keep
the production line operating. Vikram
Solar, Waree, EMMVEE Solar and Tata
Power Solar are examples.
18
8. KEY
8.2 CURRENT
QUESTION: 8.1 OVERVIEW
SCENARIO
systems for solar PV power
ARE TRACKING Tracking
plants generate more electricity than
Most projects in India use fixed-tilt
SYSTEMS fixed tilt systems during the early
structures with no tracking. Out
hours of the morning and during the
the total 1,746 MW installed in
VIABLE IN late afternoon. This excess generation ofIndia,
only approximately 80 MW
INDIA? leads to an increased yield and
are installed with tracking systems.
6
High initial capital costs and a lack

of local experience and expertise for
installation and support have acted
as the key deterrents to the adoption
of the technology. This situation may
change as the cost of tracking systems
comes down, the familiarity with the
technology increases and companies
start to manufacture and supply the
technology locally.
Projects in India that are using axistrackers are listed below:
Table 8-1: Projects in India using tracking technology7

Owner/EPC
Location/
State
Project
size
(MW)
Module
type/
Supplier
Tracking
Tracker
technology supplier
Reliance
Solar/
Reliance Solar
Khimsar/
Rajasthan
0.032
Monocrystalline/
Reliance
Dual Axis
tracking
Degerenergie
Sripower/
Solarsis
Anantapur/
Andhra
Pradesh
0.375
CdTe/
Abound
Solar
Single axis
Horizontal
Smarttrak
Clover Solar/
Clover Solar
Baramati/
Maharashtra
0.82
Monocrystalline/
SunPower
Single axis
Horizontal
SunPower
Gildemeister/
SunCarrier
Omega
Bhopal/
Madhya
Pradesh
0.8
Crystalline
Vertical
SunSingle Axis Carrier
tracking
Omega
Mahindra Solar/
Mahindra Solar
Phalodi/
Rajasthan
Polycrystalline/
SunPower
Single axis
Horizontal
SunPower
Backbone Enter- Kutch/

prises/ InSolare Gujarat
Energy
Thin Film/
Nexpower
Single axis
Horizontal
SatecEnvir Engineering
Millenium Synergy/Sun Edison
Charanka/
Gujarat
Thin film/
First Solar
Vertical
IdeeSingle Axis matec
tracking
GmbH
Millenium Synergy/ L&T
Surendranagar/
Gujarat
9.2
Polycrystal- Vertical
Ideeline/ Trina, Single Axis matec
Solarfun
tracking
GmbH

---------------------6
Collated from MNRE,Net exported power-summary accessed here and communications with
tracker suppliers.
7
MNRE,Net exported power-summary, Oct 2012-April 2013 accessed here.
19
The adoption rate for

axis tracking systems
is significantly higher
in mature markets,
especially Europe.
an increased CUF for the project.

However, tracking systems increase
the project cost. The question is; is
the additional investment worth the
increase in yield and revenue? Until
now, very few projects in India have
used tracking systems. The adoption
rate is significantly higher in mature
markets, especially Europe. In this
analysis, we will evaluate the financial
viability of axis tracking systems in
India.
horizontal irradiation and

8.3 INTRODUCTION global
thereby increase the yield.
TO SOLAR TRACKER
Sun tracking principles
TECHNOLOGY
PV modules generate electricity
using global horizontal irradiation
(GHI), a combination of direct
normal irradiation (DNI) and diffused
irradiation. The DNI component is
uniform in the atmosphere and is
captured only perpendicular to the
absorbing surface. The diffused
component is captured in all the
directions and is non-uniform. Solar
module efficiency and the amount of
incident irradiation govern the yield
from a PV module.
Solar angles for PV

module installations
Astronomically guided tracking

This is based on astronomical data.
The controller software stores the
sunrise and sunset timings along
with angles of incidence of sun rays
at a location for the whole year. The
trackers align themselves based
on this data. Astronomical tracking
is useful in locations where the
irradiation remains constantly high
and skies are more or less cloudless
throughout the year. This does not
consider the real time weather
conditions or parameters relevant to
the energy yield like reflection from
nearby water bodies or rocks.
Intelligent tracking
This is based on light detection at
a location. The sensors align the
modules towards the brightest spot
in the sky. Its major advantage is in
locations which have considerable
period of cloudy conditions in the year.
This takes into account the diffused
sunlight available at any instant.
Figure 8-1: Solar angles with respect to a PV module installation10
Surfaces
Normal
South
Zenith
Intelligent tracking
is based on light
detection at a location.
The sensors align the
modules towards the
brightest spot in the
sky.
The angle s in Figure 8-1 defines the

position of the sun with respect to the
module surface. As the sun moves
through the sky, this angle changes
during the day and also over the
course of the year. Tracking systems
can rotate about the azimuth8 angle
or change their inclination9 (tilt) angle
with respect to ground or perform
both these movements simultaneously.
This movement along the sun path
allows PV modules to capture more
Tracking systems can operate

according to two different principles11:
Astronomical tracking
is useful in locations
where the irradiation
remains constantly
high and skies are
more or less cloudless
throughout the year.
---------------------8
Azimuth is the compass direction from which sunlight is coming. At noon in northern hemisphere,
the sun is directly south and considered at azimuth angle = 0 degree
9
The angle from ground in the vertical plane at which modules are tilted
10
Castillo JE, Russo JM, Kostuk RK, Rosenberg GA; Thermal effects of the extended holographic
regions for holographic planar concentrator. J. Photon Energy accessed
11
The Alternative Energy eMagazine
20
8.4 PV MODULE
TRACKER
TECHNOLOGIES
Single axis horizontal
tracking systems are
an optimum solution
for locations where
land area utilization
has to be optimized in
a project either due
to high land costs or
scarcity of land.
are further classified into two sub

categories based on the axis of rotation
relative to the ground:
Horizontal Single Axis Tracking
There are three approaches to install

PV modules in a solar power plant:
Fixed Tilt
The module mounting structures are
installed at a fixed inclination with
respect to the ground. The optimum
angle for fixed tilt installations
depends on the latitude of the location
and the season.
Module mounting structures in such
installations are the easiest to install
and are the most stable against
wind loads. They are also the the
most inexpensive type of installation
in terms of material costs, design,
fabrication and input labor costs.
Some installations allow module
output optimization in a certain
period of the year by adjusting the
tilt seasonally. The provision for
adjustment is present in the mounting
structures and the change in tilt can be
made manually on the site. Seasonal
tilt can give an approximate increase
in yield of 5% as compared to the
standard fixed tilt systems.
Single Axis Tracking

A single axis tracking mechanism
follows the daily path of the sun
from east to west (azimuth tracking)
resulting in an increase in yield from
the modules. Single axis trackers
A horizontal axis-tracking system

rotates about an axis that is parallel to
the ground. The modules are mounted
on rows of steel tube sections running
north to south. The rotational motion
required for tracking is controlled by
a drive mechanism13. The additional
cost of materials in horizontal axis
trackers is primarily because of the
linkages, the central arms and the
drive mechanisms. The number of
rows and the length of a row controlled
by the drive mechanism are decided by
the module rating, wind speed and soil
conditions at the site. It is desirable to
have lesser motors to keep the failure
and maintenance points to a minimum.
The structures and the drives must
be robust and capable of withstanding
harsh weather conditions.
Single axis horizontal tracking systems
are an optimum solution for locations
where land area utilization has to be
optimized in a project either due to
high land costs or scarcity of land.
In the early hours of the morning
and in the late evening, adjacent
rows of modules can cause shading
on each other. The backtracking
feature corrects the tilt angle in such
instances and prevents any loss in
yield due to shading. This also allows
a high density of modules to be
accommodated in a unit area of land.
Fixed
ss
N
E
Singly-Axis-Trackers
N
E
- Dual-Axis-Trackers -
---------------------12
SolarGIS database
13
The drive could be mechanical (gears), electrical (motors) or hydraulic.
21
Fig 8-2: Types of PV module mounting techniques12
Example installation in India
According to SunPower
India, the use of
trackers has increased
the yield by 15% at
an increased initial
investment of 8% for
the project.
SunPower has installed a horizontal

tracking system in Mahindra Solars 5
MW project in Rajasthan.
Each electric motor of the tracking
system is capable of controlling
module movement of around 250-300
kW. However, this is project specific
subject to detailed engineering. The
trackers also have a backtracking
mechanism. According to SunPower
India, the use of trackers has increased
the yield by 15% at an increased initial
investment of 10% for the project.14
Vertical Single Axis Tracking
Dual-axis tracking
systems in higher
latitudes can lead to
an increase in yield of
35% to 40% over the
fixed tilt systems.
Vertical axis-trackers are a better

alternative for sites having slopes or
uneven contour. This is because the
trackers are not interconnected and
can operate in isolation. Each tracker
rotates about a mounting structure
supported on a foundation, which is
generally made of concrete. Such
systems use the astronomical tracking
principle. A drive motor adjusts the
position of the modules as per the
movement of the sun at periodic
intervals. The inclination (tilt) angle
can be optimized for maximum yield
annually or in a particular season of
the year.
is approximately 40%15 more than an

equivalent fixed tilt system16.
Dual Axis Tracking

They combine the advantage of both
horizontal and vertical single axis
trackers. The trackers can rotate about
the horizontal and also change tilt
as required. This technology is very
efficient in higher latitudes (above 40
degrees), where the position of the
sun changes substantially with respect
to season resulting in highly uneven
duration of daylight in summer and
winter.
Fixed tilt systems generate only
marginal output in cloudy conditions.
On the contrary, dual axis trackers,
that operate on the intelligent tracking
principle, are capable of pointing to
the brightest point in the sky at any
instant and deliver a better yield.
Dual axis-tracking systems generate
a substantially greater output in all
weather conditions. In a large project
having multiple dual axis trackers, it is
possible that at a given point in time,
each tracker is pointing in slightly
different directions.
Well known manufacturers of dual

axis trackers claim that for dual-axis
tracking systems in higher latitudes,
Example installation in India
there can be an increase in yield upto
SunCarrier Omega has installed an 800 40%17 over the fixed tilt systems.
kWp solar PV system in Bhopal. The
pitch (tilt) of the SunCarrier tracker
is fixed at 30 degrees and the module
surface moves from east to west every
day as per movement of the sun. The
controller automatically adjusts the
drive motor to a new position every ten
minutes. The drive can operate with
An hourly generation curve with
a three stage planetary gear or it can
all types of mounting systems was
work with an electric motor with an
generated using PVSyst software.
anti-derailing mechanism. According
Installed capacity for this simulation
to a SunCarrier Omega official, the
has been assumed at 1 MW for a
yield of vertical single axis trackers
location in Rajasthan. This simulation
8.5 COMPARISON
OF VARIOUS
TRACKING
TECHNOLOGIES
---------------------14
As per communications with SunPower India representative. BRIDGE TO INDIA has not verified the
actual plant performance data.
15
SunCarrier Omega presentation
16
The figure is based on the claims of SunCarrier representatives and the actual plant data has not
been verified by BRIDGE TO INDIA
17
DEGERenergie brochure accessed here; Mecasolar, accessed here.
22
900
Fixed Tilt
800
Horizontal SAT
Vertical SAT
36%
700
Dual axis tracker
23%
600
500
11%
400
Tracking systems
generate more
electricity than fixed
tilt systems in the early
hours of the morning
and in the evening or
late afternoon.
Hourly units generated (kWh)
Fig 8-3: Comparison of hourly generation curves with and

without trackersHourly
in Rajasthan
for a 1MW
system size
generation
comparison
300
200
100
0
6
10
11
12
13
14
15
16
17
Table 8-2: Gain in yield for various axis tracking technologies for
a system size of 1 MW
Tracking Technology
Total generation18 (MWh)
% gain
Fixed tilt
5,967
Base case
Horizontal single axis
6,642
11.3
Vertical single axis
7,370
23.5
An effective way to
determine if tracking
systems make
financial sense is to
compare Return of a
PV installation with
a tracking system to
without a tracking
system.
is for a typical summer day. The graph

helps us understand the comparative
generation between various
technologies on a given day. The actual
generation from a similar 1 MW plant
would vary according to the location,
irradiation data, weather conditions,
modules used, inverters used, etc.
8.6 FACTORS
INFLUENCING
AN INVESTMENT
DECISION INTO
TRACKING
MECHANISMS
At noon, when the sunlight is

perpendicular to the ground, all
systems generate equally. Tracking
systems generate more electricity than
fixed tilt systems in the early hours
of the morning as well as in the late
afternoon. This excess generation on
a daily basis results in higher annual
generation and an increased CUF of
the plant using such trackers.
A developers decision to opt for

tracking systems in any project
depends on its financial viability.
An effective way to determine if
tracking system makes financial
sense is to evaluate the change in
Equity Internal Rate of Return (EIRR)
of a PV installation with tracking
systems as compared to without a
tracking system. If the EIRR increases
appreciably then the additional
investment (CAPEX and OPEX) can
be justified. In the case that the
EIRR change is negligible (<1%) or
---------------------18
Values from PVSyst report
23
Time of Day (Hours)
PV power plants with

single axis and double
axis-trackers require
more land than a fixed
tilt installation.
Any misalignment
while installing
the foundations for
trackers could lead
to additional costs in
maintenance over the
lifetime of the project.
even negative, then the additional

investment for tracking systems might
not make sense.
smaller motors22. This implies different

O&M costs for two trackers belonging
to the same technology.
The extra investment for a tracking

system includes the cost of the
tracking device, cost of additional
materials used for mounting
structures, additional cost of the
foundation and installation, additional
cost of the additional land required,
cost of the additional BoS required and
the additional man-hours required.
Galvanized steel channels mounted
on simple foundations are sufficient
for fixed tilt installations, horizontal
trackers involve modified mounting
structures with linkages and a drive
mechanism19 to control the rotation of
modules and the vertically mounted
single axis-trackers and dual axistrackers are designed to withstand
high wind speeds of up to 18020 km/
hr . This results in added cost of civil
works (foundation structures) and
installation.
It is important to avoid common

mistakes during the initial installation
of tracking devices as it can have a
significant impact on the future O&M
costs. For example: any misalignment
while installing the foundations for
trackers could lead to additional costs
in maintenance over the lifetime of the
project. This would reflect poorly on
the tracking technology even though
the problem lies in the workmanship
of the installation. There exists a myth
in the industry that trackers involve too
many moving parts and therefore are
not technically reliable. However, parts
like gears and electric motors are
commonly used in many engineering
applications and it may not be correct
to dismiss the viability of trackers
based on this factor alone.
The spacing required between adjacent

rows of modules determines the
additional land area required for a
solar power plant. PV power plants
with single axis and double axistrackers require more land than a
fixed tilt installation. This is primarily
to avoid shadowing due to the rotating
modules at different times of the day.
An increased area also means more
expenses on land area, electrical
equipment; wiring and mounting
structures used in the project (refer to
the financial analysis section below to
understand the CAPEX variation).
Tracking systems incur an additional
O&M cost. Each tracker design
is unique leading to different
maintenance costs. For instance:
SunPowers T0 trackers use one motor
to drive up to 400 kW of modules
whereas Raytracker believes in a more
distributed actuation21 using several
8.7 FINANCIAL
ANALYSIS
Gujarat and Rajasthan have seen
maximum PV installations in the past
three years in India. Until now, most
projects in Rajasthan use fixed tilt
systems and have reported a CUF of
18%-20%23. For the purpose of this
analysis, a location at 20-degree
latitude having daily global irradiation
of 5.5 kWh/m2 and an average CUF of
19%24 has been considered.
Performance data of projects with
tracking systems in various projects
in India has been collected from
tracking system suppliers and the
performance data available from
government sources. As there is
very little data available for dual axis
tracking systems, the values used in
the analysis for dual axis trackers are
an approximation based on information
provided by experts in the solar
industry.
---------------------19
The drive mechanism could be electrical, mechanical or hydraulic
20
Ideematec GmbH
21
The drive mechanism of the tracker could be actuated electrically, mechanically or hydraulically.
22
Solar Pro, PV Trackers, Smith; Stephen, July 2011
23
MNRE,Net exported power-summary, Oct 2012-April 2013
24
Average CUF of a solar PV power plant in India using 14%efficiency C-Si modules
24
Table 8-3: Assumptions for financial analysis

Parameter
Assumption
Module efficiency C-Si (%)
14
25
CUF of fixed tilt system (%)
19
26
Tariff (INR/kWh)
6.60
27
CAPEX (INR in millions)28
Escalation (%)
70
O&M costs (INR/Year in 1st year/MW) in millions
0.8
29
O&M escalation (%)
5.72
30
Debt: Equity ratio
70:30
Interest rate (%)
13.00
Tracking technology
Annual generation (MWh/year)31
CUF of power
plant (%)32
Increase in
yield(%)
Fixed tilt
1.66
19
1.92
22
15
2.01
23
22
Dual axis
2.27
26
35
Table 8-4: Variation in yield and CUF by technology
Tracking technology
Increase in CAPEX 33(%)
Increase in cost34
(` per Wp)
11
18
12
Dual axis
30
20
Fixed tilt
Table 8-5: Variation in CAPEX by technology
Tracker type
Fixed
tilt
Single Axis
(Horizontal)
Single Axis
(Vertical)
Dual
Axis
19
22
23
25
4.5 37
5.0
6.0
7.0
CAPEX (` millions)
70
77
82
90
Annual O&M (` millions)
0.8
1.2
1.4
1.6
CUF (%)
Land Area35 (acres )36
38

---------------------25
Central Electricity Regulatory Commission (CERC), Petition No. 242/SM/2012, October 2012
26
CERC, Petition No. 243/SM/2012, October 2012
27
An approximation based on Tamil Nadus workable tariff of ` 6.48 @5% escalation and Andhra
Pradeshs lowest bid of ` 6.58.
28
Based on prices in solar PV industry in India in May 2013
29
IFC, Utility Scale Solar Power Plants, February 2012
30
31
BRIDGE TO INDIA analysis
32
As per the data obtained from industry sources.
33
Average increase in CAPEX calculated from data obtained from industry sources in June 2013
34
Based on the % increase in CAPEX
35
Approximate land area for a 1 MW solar PV power plant using C-Si modules.
36
1 acre = 4,046 m2
36
38
Evaluated from assumptions in Table 5.1 and 5.3
25
Table 8-6: Variation of parameters due to axis-trackers
In the future, the

key driver for
adoption of tracking
technology will be
the indigenization of
components and local
manufacturing that will
help bring down costs.
Table 8-7: Variation of generation and EIRR with fixed tilt and
trackers39
Tracker type
Fixed tilt
Single Axis
(Horizontal)
Single Axis
(Vertical)
Dual Axis
14.5
15.0
14.2
14.9
EIRR (%)
8.9 CONCLUSION
The increase in EIRR is marginal when
using horizontal single axis and dual
axis tracking systems. For vertical
single axis tracking systems, the EIRR
actually reduces for Indian conditions.
The marginal increase in EIRR does
not justify the additional costs and
risk involved in adopting tracking
technology at the current cost for
tracking in India.
Installing tracking systems for utility
scale projects requires a more detailed
technical and financial due-diligence.
Given the stringent deadlines for PV
projects in most policies, developers
find it convenient to avoid tracking
systems and opt for fixed tilt systems.
As the industry matures and there is

an influx of global EPC companies with
prior experience in setting up large
solar power plants with trackers in
developed markets, the merits and demerits of axis-tracking technology in
India will become clearer.
In the future, the key driver for
adoption of tracking technology will
be the indigenization of components
and local manufacturing that will
help bring down costs. It is expected
that the cost of tracking systems will
continue to decrease as there is a
significant scope for price reduction
that still exists. However, the viability
of tracking systems will only improve if
the cost of tracking systems decreases
as a percentage of the total CAPEX
(refer to the figure below).
Figure 8-4: Variation in expected Equity IRR for reduction in the

cost of axis tracking (as a % of the CAPEX)
15.8
Base case: Fixed tilt
15.6
Case 1: If the cost of

horizontal single axis
tracking is 10% of the
CAPEX
15.4
Equity IRR
The increase in EIRR is

marginal when using
and dual axis tracking
systems. For vertical
single axis tracking
systems, the EIRR
actually reduces for
Indian conditions.
8.8 RESULTS FOR

THE FINANCIAL
ANALYSIS
15.2
15

tracking is 7.5% of the
CAPEX
14.8
14.6
14.4

tracking is 6% of the
CAPEX
14.2
14
13.8
Different equity IRRs for different cases

---------------------39
BRIDGE TO INDIA financial model
26
A more competitive
price for tracking
technology is required
for the tracker market
to pick up and become
relevant in India.
Additionally, the NSM and some state

policies also include an upper and
lower limit on the CUF that a solar
power plant can have. This means that
a plant can generate only a quantum
of power that is within a CUF range,
based on the capacity allocated. This
is a deterrent for the developers and
leads to an even lower preference for
trackers for their projects.
of horizontal single axis trackers from

` 7 ( 0.11/$ 0.14) per Wp to a range
of ` 4-5 ( 0.06-0.07/$ 0.08-0.10)per
Wp can result in a 1% gain in EIRR
compared to an equivalent fixed tilt
installation.
Such a decrease in initial cost of

trackers could change the perception
of tracker technologies and improve
adoption. A more competitive price for
Considering that module prices will
tracking technology is required for the
remain stable in the medium term (two tracker market to pick up and become
to three years), a decrease in the price relevant in India.
27
9. OUTLOOK
Figure 9-1: Projected quarterly PV installations in India

600
400
300
200
100
0
The primary reason for

the growth in the REC
market has been the
lack of policy based
project opportunities
in the second
half of 2012.
Q3-2013
Q4-2013
Q1-2014
Q1-2014
NSM
Rajasthan
50
Madhya Pradesh
50
155
25
Karnataka
40
20
0
250
Tamil Nadu
50
Andhra Pradesh
80
Punjab
100
Uttar Pradesh
Others
Total
0
30
0
50
0
80
50
100
80
245
175
630
Until now, 80% of Indias solar PV

projects have been installed in Gujarat
and Rajasthan. Now, a capacity of 690
MW that is to be allocated in Tamil
Nadu, 350 MW in Andhra Pradesh and
Karnataka is also expected to allocate
projects soon. If even 800 MW finally
comes up in these states, it would be
a substantial shift from the western
states to the southern states of India.
A capacity of 1.7 GW has already been
installed in India and close to 1.5 GW
of PV is currently under development.
BRIDGE TO INDIA expects that Indias
cumulative installed capacity will
exceed 2 GW by the end of 2013. There
is a lot of momentum building up for
capacity additions in 2014, which could
easily exceed 2 GW. This would take
Indias installed solar PV capacity to 4
GW by the end of 2014.
9.1 COMING
QUARTER
The coming quarter (July 2013
to September 2013) is expected
to see around 80 MW of projects
500
A capacity of 1.7 GW
has already been
installed in India and
close to 1.5 GW of PV
is currently under
development.
Quarterly installations (MW)
700
being commissioned. In terms of

installations, this is the slowest in
the last one year. Two projects of
25 MW each, allocated under the
Madhya Pradesh solar policy, are
expected to be commissioned.The
remaining capacity should come from
a combination of RPO, REC and thirdparty sale type of projects.
Until the end of 2012, Indias installed
capacity of REC based projects was
just 2.5 MW. In the first two quarters
of 2013, we have then seen a capacity
addition of over 82 MW under the REC
mechanism. This upward trend is
expected to continue as the capacity
of accredited projects40 now stands
at over 160 MW. The primary reason
for the growth in the REC market
has been the lack of policy based
project opportunities in the second
half of 2012, which led developers to
look at other avenues. Many of these
projects are expected to sell power to
third-party consumers under private
PPAs instead of selling it to the power
distribution companies at APPC.
---------------------40
The permission granted by the state agency in the form of an accreditation certificate that allows
the developers to sell renewable power to the state and be eligible to avail RECs.
28
Andhra Pradesh
Only developers with
recourse are expected
to get finance without
delays in Tamil Nadu.
Maharashtras power
distribution company,
Brihan Mumbai
Electric Supply and
Transport Undertaking
(BEST), has signed
an agreement with
Welspun to set up
a 20 MW project to
supply solar power
to meet its RPO .
information, we expect 40 MW of this

capacity to be commissioned before
Andhra Pradesh is in the process of
the deadline and the remaining 20
signing PPAs with developers who have MW capacity to spill over to the next
been issued LOIs. It is expected that
quarter.
PPAs will be signed for a capacity of
a little under 300 MW. These projects
Madhya Pradesh
will be given one year for completion,
The deadline for commissioning of
but Andhra Pradesh is offering the
the five 25 MW projects allocated in
developers an incentive for early
the first phase of the Madhya Pradesh
commissioning. Based on the list of
solar policy was in June 2013. None of
developers who were issued LOIs, we
the projects have been commissioned
expect a capacity of around 80 MW to
come up in the second quarter of 2014. as of 20th June 2013. Based on industry
information, we expect at least two
projects to be commissioned in the
Tamil Nadu
coming quarter and the remaining
Unlike Andhra Pradesh, Tamil Nadu
three projects in the quarter after that.
is not offering an incentive for early
Apart from that, a 105 MW project
commissioning, but as there was
has been allocated to Welspun (in
a requirement for bidding, most
addition to one of the 25 MW projects).
developers have already tied up for
land and arranged for permissions for the 105 MW project is in June 2014.
grid inter-connection. This is expected However, based on an announcement
to reduce the project development
by the company, it is expected that this
time. Also, due to a significant delay in project would also be completed in the
allocations, many developers have had fourth quarter of 2013.
enough time for planning their projects
before signing the PPA. For this
Other projects
reason, we expect some developers to
These projects are typically RPO,
commission their project in the next
10-11 months. The key hurdle for early REC or parity driven. Apart from the
various REC accredited projects that
commissioning of these projects will
are yet to be commissioned, some
be access to finance. Only developers
projects are being set up to meet
with recourse are expected to get
the RPO of various obligated entities
finance without delays. Based on this
understanding and after seeing the list directly. For example, Maharashtras
power distribution company, Brihan
of LOIs issued, we expect a capacity
Mumbai Electric Supply and Transport
of 250 MW to come up in the second
Undertaking (BEST), has signed an
quarter of 2014.
agreement with Welspun to set up a 20
MW project to supply solar power that
NSM
will help meet the RPO for the power
A capacity of 750 MW is expected to be distribution company.
allocated under the NSM this year. As
the process is expected to start in July
2013 with PPAs signed only by October
2013, we do not expect any capacity
addition in the next four quarters
Initially 4.5 GW of capacity was planned
under the NSM.
for allocation in India in 2013 under
various state and national policies.
Karnataka
However, now that half the year has
passed, the expectation has come
down to 2.5 GW. More capacity might
the 60 MW capacity allocated in the
fall through (refer table).
first phase of the Karnataka policy is
in October 2013. Based on industry
9.2 LONG-TERM
OUTLOOK
29
Policy
Initially
announced
capacity allocation (as
of January
2013)
Current scenario
(as of June 2013)
Expected Reason for the

capacity
expected capacity
as of June
2014
NSM phase 1,600 MW

two
750 MW likely to
be allocated in the
next few months
0 MW
The deadline for

commissioning is
expected to be in
or after the third
quarter of 2014
Tamil Nadu 1,000 MW
LOIs issued for

690 MW
300 MW
Some projects are

expected to be
completed before
the deadline
as they have a
head start before
signing of the PPA
Andhra
Pradesh
1,000 MW
LOIs issued for

350 MW, out of
this, over 200 MW
has provisionally
agreed to the
terms
80 MW
Some projects
are expected to
be commissioned
before the
deadline as
there is a fiscal
incentive for
commissioning
before the
deadline
Rajasthan
100 MW
A capacity of 75
MW has been
allocated
50 MW
These projects
are expected to
be commissioned
within the
deadline
Uttar
Pradesh
200 MW
Financial bids
received for 135
MW. No clarity
on whether LOIs
will be issued
as, due to an
undersubscribed
tender, some of
the tariffs quoted
are very high
50 MW
Some experienced
developers
are expected
to be able to
commission the
projects a couple
of months before
the deadline
Punjab
500 MW
The state came

out with a tender
for 300 MW but
only 250 MW has
been issued an
LOI
100 MW
Some experienced
developers
are expected
to be able to
commission the
projects a couple
of months before
the deadline
30
Table 9-1: Long term outlook of various policy based allocations

in India
40 MW was
expected
as per the
policy
An allocation for
130 MW is under
process
0 MW
The deadline for

commissioning of
these projects is
expected to be in
or after Q3 2014.
A capacity of 60
MW from the first
round of biddings
is expected to be
commissioned
this year
31
Karnataka
10. ANNEXURE 10.1 GLOSSARY OF TERMS

APPC Average Pooled Purchase Cost
BEST Brihan Mumbai Electric Supply and Transport Undertaking
CAPEX Capital Expenditure
CE Chief Engineer
CERC Central Electricity Regulatory Commission
CSP Concentrated Solar Power
CUF Capacity Utilization Factor
DCR Domestic Content Requirement
DISCOM State Distribution Company
DNI Direct Normal Irradiation
DGAD Directorate General of Anti-Dumping Duties
EPC Engineering, Procurement and Construction
EIRR Equity Internal Rate of Return
FiT Feed-in-Tariff
GHI Global Horizontal Irradiation
HTF Heat Transfer Fluid
LoI Letter of Intent
MNRE Ministry for New and Renewable Energy
MoP Ministry of Power
NCEF National Clean Energy Fund
NOC No Objection Certificate
NSM Jawaharlal Nehru National Solar Mission
NTPC National Thermal Power Corporation
NVVN NTPC Vidyut Vyapar Nigam
O&M Operation and Maintenance
PV Photovoltaic
PPA Power Purchase Agreement
REC Renewable Energy Certificate
RfP Request for Proposal
32
RPO Renewable Purchase Obligation

RRECL Rajasthan Renewable Energy Corporation Limited
SECI Solar Energy Corporation of India
TANGEDCO Tamil Nadu Generation and Distribution Company
TEDA Tamil Nadu Energy Development Authority
VGF Viability Gap Funding
WTO World Trade Organization
33
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No part of this report may be used

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The information contained in this

For further enquiries or to advertise

2.1 Market Compass 

2.2 Indian Solar Market Prices

2.3 Installed Capacity in India 

4.1 National Solar Mission

4.2 Tamil Nadu Solar Policy

4.3 Andhra Pradesh Solar Policy

5.1 New installations (grid connected)

5.2 Status of on-going projects (PV)

5.3 Status of on-going projects (CSP)

8. Key question: Are tracking systems viable in

8.2 Current scenario

8.3 Introduction to solar tracker technology

8.4 PV module tracker technologies

8.5 Comparison of tracking technologies

8.6 Factors influencing an investment decision 

8.7 Financial analysis

8.8 Results for the financial analysis

9.1 Coming quarter

9.2 Long-term outlook

BRIDGE TO INDIA, 2013

Indian solar market prices 

Figure 5-1: Grid connected solar projects installed in the previous

Figure 5-2: Grid connected solar projects installed in the previous

Figure 6-1: A weakening Indian rupee against the US dollar 

Figure 8-1: Solar angles with respect to a PV module installation 20

Figure 8-3: Comparison of hourly generation curves with and without

Figure 8-4: Variation in expected equity IRR for reduction

Figure 9-1: Projected quarterly PV installations in India 

Proposed schedule for allocations under batch one of

Projects in India using tracking technology

Gain in yield for various axis tracking technologies

Assumptions for financial analysis

Variation in yield and CUF by technology

Variation in CAPEX by technology

Variation of parameters due to axis-trackers

Variation of generation and EIRR with fixed tilt and

Long term outlook of various policy based allocations

BRIDGE TO INDIA, 2013

The market will

A capacity of over 1.7

In the previous quarter (April 2013 to

As most prominent developers in

A capacity of over 1.7 GW has already

BRIDGE TO INDIA, 2013

2.2 INDIAN SOLAR MARKET PRICES

c-Si modules (China, Taiwan)

Thin Film modules (US and Malaysia)

c-Si modules (Japan, Europe)

Thin Film modules (Japan)

*$ rate has been used to avoid effect of currency fluctuations

BRIDGE TO INDIA, 2013

BRIDGE TO INDIA, 2013

Source: BRIDGE TO INDIA

BRIDGE TO INDIA, 2013

130 MW capacity (a 25 MW project

7. Andhra Pradesh is now looking

2.1 Market Compass

2.3 Installed Capacity in India

4.1 National Solar Mission

4.2 Tamil Nadu Solar Policy

4.3 Andhra Pradesh Solar Policy

5.2 Status of on-going projects (PV)

5.3 Status of on-going projects (CSP)

8.2 Current scenario

8.3 Introduction to solar tracker technology

8.4 PV module tracker technologies

8.5 Comparison of tracking technologies

8.6 Factors influencing an investment decision

8.7 Financial analysis

8.8 Results for the financial analysis

9.1 Coming quarter

9.2 Long-term outlook

Indian solar market prices

Figure 6-1: A weakening Indian rupee against the US dollar

Figure 8-1: Solar angles with respect to a PV module installation 20

Figure 9-1: Projected quarterly PV installations in India