Four s services -solar energy report

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June 2012

India Solar Energy Report

Research4India

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Table of Content

1. Solar Energy in India – Introduction………………………………………………………………………………………. 3

2. Solar Energy Segments………………………………………………………………………………………………………….. 9

3. Drivers for Solar Market ……….……………………………………………………………………………………………... 18

4. Government Incentives/NSM……………………………………………………………………………………………….. 23

5. Investment Opportunities in the Solar Sector ………..…………………………………………………………….. 29

6. Key Issues/Challenges ………………………………………………………………………………………………………….. 37

7. Companies …………………………………………………………………………………………………………………………. 45

Manufacturers of Cells/Modules/Systems

i. Moser Baer Photovoltaic (MBPV)

ii. XL Energy

iii. Websol Energy

iv. Indosolar

v. Tata BP Solar

vi. Titan Energy

vii. Solar Semiconductor

viii. Kotak Urja

ix. Photon Energy

x. Maharishi Solar

xi. Vikram Solar

xii. Reliance Solar

xiii. PLG Power

xiv. HHV Solar

Developers of Solar Power Plants

i. Lanco Solar

ii. Moser Baer Clean Energy

iii. Azure Power

iv. SunBorne

v. Kiran Energy

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Untapped potential of Renewable Energy in India

India has an enormous potential of renewable energy (~XXMW) across various sources. However India has

realized ~xx% (~xx MW) , leaving a huge untapped potential. This is xx% of total installed power capacity

However, the contribution of renewable energy to real power generated is only x%.

As part of the National Action Plan on Climate Change, (NAPCC) the government has set the target of increasing

contribution of renewable energy sources in power generations to x% by 2015. The share will continue to grow

steadily with renewable energy expected to contribute as high as xx% by 2050.

RE Sources Potential (MW) Achieved (MW)

Wind XX XXSmall Hydro (up to 25 MW)

XX XX

Biomass + Bagasse XX XX

Solar and others XX XX

Installed Capacity for Renewables in India Renewable Potential Vs Achievements in India

Source: MNRESource: MNRE

1 TW = 1000,000 MW

CAGR 23%

India has realized less than XX% of its installed renewable energy capacity, leaving huge untapped opportunity

2005-06 2006-07 2007-08 2008-09 2009-10 2010-11

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Methods of harnessing solar power

Solar Photovoltaic (SPV) technology converts light directly into

electricity.

India has current installed capacity of XXMW (PV systems and

power plants). PV installations in India today almost entirely

comprise small capacity applications.

Ministry of New and Renewable Energy (MNRE) is aiming to

achieve XXMW grid-connected SPV capacity by 2012.

Solar PV technology has always been the main technology adopted for solar power in India. Solar thermal is largely confined to heating and drying applications

Solar Photovoltaic

Solar Thermal

Solar Thermal technology converts light first into heat and then electricity.

Solar thermal can be used for heating and drying and for power generation (concentrating solar power, CSP).

In India, there is no power generation currently using solar thermal. Solar thermal has been used exclusively for

heating and drying.

India ranks ninth worldwide in production of solar thermal power systems.

2009 2010e 2011e 2012e 2013e

Installed Capacity for PV in India (MW)

Source: European Photovoltaic Industry Association

CAGR 57%

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Status of Solar Energy in India

Solar Power Capacity

Sources / Systems Cumulative Achievement

Grid-interactive Power

Solar Power XX

From all renewable sources XX

Off-grid Power

Solar PV Power Plants XX

From all renewable sources XX

Total Solar Power XX

Decentralised Energy Systems (Off-grid)

Solar Street Lighting XX

Home Lighting System XX

Solar Lantern XX

SPV Pumps XX

Solar Water HeatingSystem

XX

PV constitutes a miniscule part in India’s installed power generation capacity with grid connected solar PV generation at a mere XXMW

Bulk of India’s installed SPV capacity is in the form of non-grid applications. They are most visibly seen in lighting applications (street lighting, and home lightning systems), small electrification systems and solar lanterns in rural areas.

In India, solar thermal technology has been used exclusively for heating and drying.

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Availability of public and private capital

Date Investor (s) Company Value($Mn)

Oct-11 GE Energy Financial Services Company 1 XX

Jun-11 IFC Company 2 XX

Jan-11New Silk Route, Bessemer Ventures and Argonaut Ventures

Company 3 XX

Oct-10 IFCI Ventures Company 4 XX

Oct-10 New Silk Route, Argonaut, Bessemer Company 5 XX

Oct-10 IFC Company 6 XX

Aug-10 Blackstone Group Company 7 XX

Jul-10 Bessemer Venture, IFC Company 8 XX

Apr-10 IFC Company 9 XX

Mar-10 IFC, Helion Venture Partners, Foundation Capital Company 10 XX

Dec-09 Khosla Ventures, General Catalyst Partners Company 11 XX

May-09 Pangea Capital Company 12 XX

Nov-08 Sherpalo Ventures, KPCB, Applied VenturesCompany 13 XX

Oct-08 General Catalyst Partners Company 14 XX

Sep-08 Helion Ventures, Foundation Capital Company 15 XX

Sep-08Morgan Stanley, Credit Suisse, IDFC PE, Nomura Holdings, Others

Company 16 XX

Mar-08 Aureos India, SIDBI VC Company 17 XX

PE deals in solar in the last 4 years

Investing in solar power plants could fit in PE portfolio owing to the fact a long power purchase agreement with a government-backed entity assures them of a stable revenue flow

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Incentives under National Solar Mission

Incentives under National Solar Mission

Incentives for power plant developers

Incentives for solar PV/thermal manufacturers

Generation Based Incentive (GBI) for roof top and small

scale power plants (1-5 MW)

NTPC Vidyut Vyapar Nigam (NVVN) for large scale power

PV plants (5-25 MW) and thermal plants (20-100 MW)

Semiconductor Policy and Special Incentive Package

Scheme

Reduce the cost of grid connected

solar systems

GBI to power developers: Rs.12/

KWh for SPV and of Rs.10/KWh

for Solar Thermal Power Plants

GBI for a period of 10 years

NVVN will enter into PPA with solar

power developers to purchase solar

power @ CERC tariff (Rs 17.91/kWh

for PV and Rs. 15.40/kWh for

thermal)

NVVN to get equivalent MW from

NTPC

NVVN will sell bundled power to

State utilities at the rates determined

as per CERC regulations

20% subsidy on capital expenditure

for SPV project in a SEZ while 25%

subsidy in case of a non SEZ.

No Central Excise duty on specific

capital equipment, critical materials

and project imports

Low interest rate loans

Promote solar water heating systems

ensuring that applications below 80

°C are solarised

Aims at 100 MW power by 2013

Aims at 1,000 MW power by 2013 Aims at 4-5 GW capacity by 2020

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High cost of solar power

The estimated unit cost of generation of

electricity from SPV and solar thermal route is

much higher than the electricity obtained from

conventional fossil fuels.

Cost of setting up power plants (Rs Mn/MW)

Source: CERC

Cost of power generation (Rs /kWh)

Source: TERI

Thermal Wind Nuclear Solar Thermal SPV

Thermal Solar Thermal SPV

Min Max

The primary reason for the high cost of solar

power is the high capital cost.

Component Amount (Rs Mn)

Solar panel arrays XX

Inverter XX

Balance of System XX

Installation XX

Others XX

Total XXSPV cost breakup

The main issue impending the solar industry is high cost of power generation which is due to high capital cost

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Manufacturers of PV cells/modules/systems

Product

Company Location Capacity Wafers Cells ModulesPV

SystemsSolar

Thermal Future Plans

Moser Baer Photovoltaic Delhi XX √ √ √ XX

XL Energy Hyderabad XX √ √ XX

Websol Energy Kolkata XX √ √ XX

Indosolar Noida XX √ XX

Tata BP Solar Bangalore XX √ √ √ √ XX

Titan Energy Hyderabad XX √ √ XX

Solar Semiconductor Hyderabad XX √ √ XX

Kotak Urja Bangalore XX √ √ √ XX

Photon Energy Hyderabad XX √ √ √ XX

Maharishi Solar Delhi XX √ √ √ √ √ XX

Vikram Solar Kolkata XX √ √ XX

Reliance Solar Mumbai XX √ √ XX

PLG Power Mumbai XX √ √ XX

HHV Solar Bangalore XX √ √ XX

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Websol Energy Systems

Established in 1990, Websol Energy Systems Ltd. (formerly Webel SL

Energy Systems Ltd.) is a leading manufacturer of photovoltaic

monocrystalline solar cells and modules.

The Company’s production facility is located at Falta SEZ, West

Bengal and has the manufacturing capacity of 42MW.

Websol solar modules have been certified by various reputed

institutes like Underwriters laboratories Inc , TUV Rhienland

Germany, EuroTest Laboratori S.R.l Italy and CSA International

Canada.

The Company manufactures cells and modules for stand-alone and

grid connected projects.

Websol primarily focuses on the international markets:

− In FY10, it exported more than 99% of its production to Europe

and USA

− It is selling its products to system integrators and project

developers

− In order to address customer enquiry and develop customer

relations it has set up offices at Germany and US

In India, the companies operations are largely focused to the state

of West Bengal

BACKGROUND AND OVERVIEW PRODUCTS AND SOLUTIONS

Products/solutions Details

Solar Photovoltaic Crystalline Cells

Crystalline Modules

The product range from 5 watt to 220 watt caters to needs ranging from rural electrification to big power plants.

Name/Designation Profile

Mr. S L Agarwal,

Founder and

Managing Director

Mr. Agarwal is a commerce graduate from Kolkata University and has more than 25 years experience in managing different types of businesses and organisations. Mr. Agarwal is a recipient of the prestigious Udyog RatnaAward from the President of India and Shiromani Award from the Indian Institute of Economic Studies in 1987. He is also a core committee member of Indian Semiconductor Association Solar PV Cell.

MANAGEMENT

BUSINESS STRATEGY

The Company plans to increase the capacity to XXMW by 2011 and

to XXMW by 2012. It expects to grow peak revenues to Rs XXbn

once XXMW is fully commissioned, and to Rs XXbn when XXMW is

commissioned.

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Websol Energy Systems

REVENUES (EXPORTS AND DOMESTIC) EBITDA AND EBITDA MARGIN

PAT AND PAT MARGIN RETURN ON NET WORTH AND RETURN ON CAPITAL EMPLOYED

FY08 FY09 FY10 FY11 FY12

FY08 FY09 FY10 FY11

EBITDA (Rs Mn) EBITDA Margin (%)

FY08 FY09 FY10 FY11

Net Profit (Rs Mn) PAT Margin (%)

FY08 FY09 FY10 FY11

RoE RoCE

FY’12 PAT : Rs -1,489mn

FY’12 EBITDA : Rs -1,123mn

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Developers of solar power plants

Capacity

Company Location CurrentUnder

implementationFuture Plans

Lanco Solar Delhi XX XX XX

Moser Baer Clean Energy Delhi XX XX XX

Azure Power Delhi XX XX XX

SunBorne Gurgaon XX XX XX

Kiran Energy Mumbai XX XX XX

KVK Energy Hyderabad XX XX XX

Rajasthan Sun Technique (Reliance Power unit)

Mumbai XX XX XX

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