DOMESTIC CONTENT REQUIREMENTS AND INDIA’S NATIONAL SOLAR MISSION Meera Fickling ECODIT, LLC June 26, 2014
DOMESTIC CONTENT REQUIREMENTS AND INDIA’S NATIONAL SOLAR
MISSION Meera Fickling ECODIT, LLC June 26, 2014
INDIA’S SOLAR PROGRAM
• JNNSM: launched in 2010 under National Action Plan on Climate Change. • 1.1 GW of grid connected
PV, 0.2 GW of off grid by 2013.
• 20 GW of grid connected PV, 2 GW of off grid by 2022.
INDIA’S SOLAR PROGRAM
• Phase I: Reverse auction mechanism • Solar developers submit bids to
government • Government selects lowest
bids • Government purchases power
• Two auctions under Phase I: • Batch I: PPAs signed in 2011 • Batch II: PPAs signed in 2012
• One auction so far under Phase II: • PPAs signed in 2014
THE SOLAR PV MANUFACTURING CHAIN
THE PHASE I LCR
• Crystalline silicon panels required to be sourced domestically.
• Thin film panels exempt from the requirement.
0.5
0.7
0.9
1.1
1.3
1.5
1.7
1.9
2.1
1/2
010
3/2
010
5/2
010
7/2
010
9/2
010
11/
2010
1/2
011
3/2
011
5/2
011
7/2
011
9/2
011
11/
2011
1/2
012
3/2
012
5/2
012
7/2
012
9/2
012
11/
2012
CSi vs Thin Film Module Spot Prices, Adjusted for BOS Penalty, 2010-2012
Pvinsights CSi Multi Module Spot $/watt - Average
PVinsights Thin Film Module Spot $/watt + BOS Penalty
Globally, only 11 percent of PV deployment is in thin film; 89 percent is in Csi.
Under the JNNSM, over 60 percent of capacity subsidized under Phase I was in thin film.
Gujarat vs. Rajasthan
Projects Financed 2011-‐2012 JNNSM
Projects Non-‐JNNSM Projects >
5 MW Gujarat 0 59 North Gujarat 0 2
Rajasthan 52 2
PERCENT MARKET SHARE: FOREIGN CSI, FOREIGN THIN FILM, DOMESTIC
Rajasthan Gujarat
Foreign CSi 0 30
Foreign Thin Film 62 38
Domes?c CSi 38 33
PHASE II: POLICY ADJUSTMENTS
• Viability Gap Funding (VGF) • Total 750 MW in Batch I • Two separate auctions: • 375 MW is open; no LCR • 375 MW has technology-
neutral LCR
• Imported thin film now at a disadvantage • US has requested a
dispute settlement panel in WTO
PHASE II LCR’S IMPACT ON THE COST OF SUBSIDIZING SOLAR GENERATION
0
5
10
15
20
25
30
10
60
110
160
210
260
310
360
410
460
510
560
610
660
710
Via
bili
ty G
ap
Fun
din
g (
VG
F),
Mill
ions
of R
upe
es
MW
True Supply
Supply with LCR
SUMMARY
• Phase I LCR: • A failure for Indian
manufacturing: No significant additional domestic market share.
• A win for foreign thin film manufacturers: mean estimate of 24% increase in thin film market share.
• Phase II LCR: • 50% increase in subsidy at the
margin relative to a non-LCR scenario.