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Renewable Markets IndiaIndias Green Business Centre

14/17/2011 1

www.renewablemarketsindia.com

Global Solar Investment

Summit15th 16th April, 2011, Mumbai

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Government Support & Policy IncentivesAvailable to Solar Investors in India

Kanv Garg

Consultant, Low Carbon Economy

Planning Commission, Government of India

Global Solar Investment Summit, Mumbai

15 April 2011

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The Presentation Covers a Brief Overview of

1. Governments institutional support structure

available for solar energy development in India

2. Supportive Government interventions and resultingincentives available to solar investors in India

.

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Governments Institutional Support Structure Available for

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The Energy Sector Institutional Structure at Centre...

Government of India

Planning

Commission

Ministry of Coal

Ministry of

Power

Ministry of

Petroleum &Natural Gas

Ministry of New

and Renewable

Department of

Atomic Energy

Ministry of

Environment &Forests

CERC / CEA / BEE

5

India is the only country worldwide to have a dedicated ministry for promotion of

renewable energy Ministry of New and Renewable Energy (MNRE)

nergy

Central Pollution

Control Board

Indian Renewable Energy

Development Agency

Upstream / Downstream

Companies

Utilities / NTPC / NHPC

/ POWERGRID / PTC /

PFC / REC

Source: Clean Energy: An Exporters Guide to India (2008)

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And the RE Institutional Structure at the State Level

State Government

State Renewable

Development Agency

Department of

Environment

Department of

Power

State Electricity Regulatory

Commission

State Pollution

Control Board

State Utilities / GENCOs /

DISCOMs / TRANSCOMs

6

Most States have State Nodal Agencies (SNAs) to oversee their respective

implementation of renewable energy programs

Electrical

Inspectorate

Source: Clean Energy: An Exporters Guide to India (2008)

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Provide the Overall RE Institutional Support Structure

Ministry of New &

Renewable Energy

(MNRE)

IREDA

Solar Energy Centre /

Other R&D Institutes

SERCs

CERC / CEAPlanning Commission Ministry of Power / REC Ministry of Finance

Banks / NBFCs /

Multilaterals

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Policy Flow R&D Flow Fund Flow Implementation Flow

SDREDAs / SNAs /NGOs /

Akshay Urja Shops

State Utilities / GENCOs /

DISCOMS / TANSCOMSSolar Cells, Modules &

Systems Manufacturers

End Users & Producers: : Individuals / Corporates / Government / IPPs

Source: Framework Adapted from India: Renewable Energy Report (APCTT-UNESCAP); Analysis

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Supportive Government Interventions &

Resulting Incentives Available to Solar Investorsin India

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Centre Governments Support for Solar Energy,

Multiple regulatory and policy interventions both before and after the National SolarMission form a conducive policy and regulatory ecosystem for development of solar power

in India:

The Electricity Act (2003)

The National Tariff Policy (2006)

The National Electricity Policy (2005)

Integrated Energy Policy (2006)

The Energy Conservation Act (2001)

Special Incentive Package Scheme (2007)

9Source: Policy Documents; Analysis

Provides overall strategic direction to rapidly increase the share of renewables in energy

mix and initiate necessary thrust & incentives for a competitive solar market development

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Complemented with the State-level Response,

In response, complementary policies for development of solar energy both before and afterthe announcement of the Solar Mission have been announced by several Indian states:

State Solar Policies

Gujarat

Rajasthan

Madhya Pradesh, etc.

Manufacturing Policies and SEZ Schemes

Karnataka Semiconductor Policy

Gujarat Solar SEZ Policy, etc.


Provide tactical details for overarching strategy formulated by Centre for the development of

solar energy, being driven by State Nodal Agencies and overseen by the Centre

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& Supported by Other National-level Interventions,

The Centre and State solar policies are further fostered by various Government initiatives toaccelerate market development:

National Solar Mission (NSM) & subsequent guidelines issued by MNRE

Remote Village Electrification scheme by MNRE

Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY) (2008)

n erven ons on So ar Power Tari an Purc ase Regu ations

Proposed modification of the National Building Code (NBC); Energy

Conservation Building Code (ECBC); Green Buildings Rating Systems


Assist the private sector to assess eligibility, evaluate demand and initiate investments in

the solar power and equipment space in India

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Forms a Robust Solar Energy Policy Framework

Solar Energy Policy

Supply-side Policy Pricing & Taxation Policy Demand-side Policy

Energy Conservation Act

National Tariff PolicyNational Electricity Policy

Electricity Act

Integrated Energy Policy

Centre

Special Incentives Package Scheme

State

Jawaharlal Nehru National Solar Mission

CERC Tariff and Purchase RegulationsJNNSM Guidelines

State-level RPOsState Manufacturing Policies

State-specific Solar Policies

National

12Source: Framework Adapted from Chapter 4, Page 128: Policies & Institutional Mechanisms (ADB); Analysis

Remote Village Electrification Scheme

RGGVY and NBC & ECBC

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& Provides Several Incentives Across the Value Chain

EquipmentManufacturing /

Solar Plant Set-up

Preference to IndigenousProduction

Custom & Excise DutyConcessions / Exemptions

Sale of SolarEquipment / Energy

Production

Feed-in-Tariffs (FITs)

Solar-specific Renewable

Use of Solar Energy

Solar-specific RenewableEnergy Certificates (RECs)

CDM Benefits

13

SEZ Tax Breaks

Technology Access in SolarParks

Lower Interest Rates & Re-

financing OptionsR&D Ecosystem and HRD

Support

Generation BasedIncentives (GBI)

Long-term PPAs

Promotion of Solarization

Government Subsidies

Availability of Soft Loans

Increased Energy Security

Strong Institutional and Regulatory Framework

Source: Policy Documents; Analysis

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To Achieve the Envisioned NSM Target Deployment

larEnergyCost

GridParity)

JNNSM Phase-III (2017-22)*

JNNSM Phase-II (2013-17)

Solar Collector Area: 15 million m2

Off-grid Solar Applications: 1,000 MW


Off-grid Solar Applications: 2,000 MW

Grid-connected Solar Power: 20,000 MW


Off-grid Solar Applications: 200 MW

Grid-connected Solar Power: 1,000-2,000 MW

Decreasing

S

(towards

JNNSM Phase-I (2010-13)

Grid-connected Solar Power: 4,000-10,000 MW

Capacity Scale-up and Increasing Technological Innovation

Source: NSM Document; Concept Adapted from Internet; Grid Connected Solar also includes Rooftop

*Also includes deployment of 20 million solar lighting systems by 2022 (no phase-wise targets) 14

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An Existing Gap Which Needs to be Addressed

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Off-grid Solar Power Requires Immediate Attention

National Solar Mission encompasses the following areas of capturing, distributing and usingsolar power for India:

Grid-connected Solar Power (including rooftop solar): Large Photovoltaic

(PV) and Concentrated Solar Power (CSP) plants

Distributed Solar Power: Solar Lighting Systems for individual

households

-gr o ar ower: n r s ca er ng o a se ec num er o rura

households and applications at a time

Solar Heating: Thermal Collectors for low temperature heating purposes

16Source: Analysis

Off-grid solar power solutions hold the key if NSM aims to meet its objective of providing

energy security to people and make electricity reach difficult-to-connect areas by grid

however the least play, from both the Government and private sector, is in this area

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. & Viable Solutions from Government & Private Sector

Off-grid solar opportunity is huge but untapped because of:

Lack of institutional support presence & local supply infrastructure

High cost, absence of viable business models & technology acceptance

Government and private sector need to work together to form feasible hybrid

business models (based on PPP, franchisee, etc.) to address issues, such as:

- -

Distribution bundling to target overall rural energy mix combination of

home lighting systems, off-grid solar (or hybrid) solutions and LPG

connections to address lighting & cooking needs

17Source: Analysis

There is a need to find the optimum financial & operational strategy to cover the high

upfront costs through an enabling framework and appropriate Government support ,

coupled with active private sector participation

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THANK YOUConsultant, Low Carbon Economy

Planning Commission

T: +91-11-23042448

E: [email protected]

MBA (Strategy & Leadership)

Indian School of Business, Hyderabad

M: +91-9711060647

E: [email protected];

[email protected]

Kanv GargKanv Garg

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Disclaimer

The presentation is prepared from data sources assumed to be credible and the

analysis. The views expressed in the presentation are those of the author and not

necessarily reflect the views of the Planning Commission.

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