SOLAR PV GLOBALLY AND IN INDIA

In the past century, less than one fifth of the world's population has developed. Today, BRICS (Brazil, Russia, India, China and South Africa) are a strong groups of countries and one of them the next super power. Today two thirds of the world's population (namely in China, India, Indonesia, Brazil etc.) are undertaking major advancement in energy infrastructure which includes solar energy. Energy, being the fuel of the economic development, has experienced an explosive growth worldwide. Nevertheless, the alarming global climate changes and the dwindling supply of fossil fuels are demanding our highest attention. To sustain a balanced and healthy economic growth, we must adopt a policy to boost investment and growth in clean and renewable energy projects such as solar, wind, hydro, biomass and biogas.

Solar PV energy – the promising prospect:
History:

1800 to 1950:
The photovoltaic (PV) effect refers to the creation of electricity when a material is exposed to light. The name (photovoltaic) is a combination of Photo (meaning light in Greek) and Volta (the Italian physicist after whom the volt is named).

Although, the sun’s energy has been used for many applications, the history of solar cells begins in the 1800s. The PV effect was first discovered by A.E. Becquerel, a French physicist, in 1839, but the first photovoltaic cell was not built until 1883, by Charles Frits. For the next few decades, scientists discovered more about, how solar energy works?

1950 to 1970:
The 1950s was a period of great importance in the history of solar power. The first modern PV cell was able to convert enough solar radiations into electricity in order to power various devices. They were developed by scientists at Bell Laboratories in 1954. The original silicon solar cell had 4% efficiency.

1956, was another key point in the history of solar panels; research in using PV cells for satellites began. The first satellite to use solar energy (in order to power radios) was the Vanguard I, launched in 1958. Although the usage of solar power for homes was still costly. PV power use in satellites was expanding. In 1962, Bell Telephone launched one of the first solar-powered telecommunications satellite, named the Telstar.



1970 and Beyond:
Technological progress and greater interest from the oil industries helped lowers the price of PV cells. After the oil crisis of the 1970’s, oil companies recognized that oil would be too expensive in the future. Companies including Shell, BP and Mobil began to invest in solar research.

In the meantime, greater funding for solar research, helped in generating new varieties of silicon, allowing the widening use of solar energy. Since the 2000’s, PV solar panels have become affordable and practical for residential use and are widely used in non-residential applications too.





Solar Energy is radiated from the sun, in the form of heat and light. It is required for photosynthesis and is also harnessed as a renewable energy source, for e.g. photovoltaic’s (PV) provides electricity / in providing solar thermal energy for heating and cooling systems. Solar energy can be used in homes, businesses, and industries as well as in distributed generating applications, such as: street lighting or for back-up electricity generation.



Solar Energy PV Market to Grow to $155 Billion in 2018:
This May, 2013, research was based to analysis in 156 separate locations, accounting for 82% of the world’s population some key findings for this research are following:

U.S., China, Japan, and India will take over where Germany and Italy left off. With an 18% CAGR to 10.8 GW of installations in 2018, the United States will emerge the world’s second-largest market. But China will leapfrog it, growing over 15% annually to 12.4 GW in 2018.

Utility-scale installations to grow the fastest; commercial the largest. Utility-scale solar, the smallest segment in 2012 at 8.6 GW, will grow the fastest to 19.9 GW in 2018 as developing markets turn to PV. Globally, commercial applications reign supreme as markets like the U.S. and Japan move to large rooftop installations.



Solar energy systems have little impact on the environment, making them one of the cleanest power sources available today. While it converts the sun’s rays into electricity or hot fluids, they produce no air pollution, hazardous waste, or noise pollution. The more it converts the sun rays and heat into electricity, the more it decreases our reliance and dependence on fossil fuels and imported sources of energy. Finally, solar energy can be an effective economic development driven force for a nation like India.



Power plants all over the world are an out dated technology due to many reasons. The days will are not far off when power plants will shift from large remote centralized stations to rooftops; backyards; with no fuel cost characterized by quality & reliability.
As human civilization witnesses a gradual shift towards harnessing cleaner forms of energy from different sources; the solar energy is going to play an important role. Perhaps, it is the only energy which has absolutely no fuel cost. To tap the infinite energy from the sun and transform it in energy which is used in each and every household; an international energy expert quoted as under:

"The Central power plant, like much bulk electric transmission, will soon become a white elephant, uneconomic to run, and difficult to sell. Such plants are likely to survive in significant number by 2030 in any market economy and would be replaced by more localized electricity generation."
- Amory Lovins, Int’l Energy Expert



At present, there are many technologies available to convert solar radiation into power. Promptly, for maximum results we have been focusing on solar PV technology; followed by hydro and wind power. It is the third and most efficient renewable energy source in terms of globally installed accommodation. Ground-mounted; (solar PV Installation) has been used by more than 100 countries for farming and grazing and on canopies and walls of infrastructures too.





A solar PV system is an 'install and forget' proposition; once you have installed it on your property or utility there is nothing else you need to do. Although, a need, for necessary inspection of the electrical wiring is required every 20to25 years. Solar PV implementation creates jobs, which is one of the main requirements of the young India today. The stronger the industry becomes, the more jobs we create. Since 2011 solar Industry in US is the highest job formulating Industries. U.S. job growth in solar has exceeded that of the other industries. Therefore, it might supposedly shape in the same manner in India too.



FACT: In India on a bright, sunny day, the sun provides approximately 1,000-1500 watts of energy per square meter of the planet’s surface, and if we could collect all of that energy we could easily power our homes and offices for free.

Click on the solar map of India-Detailed



Growing Solar PV in India:

India is endowed with rich solar energy resource. The average intensity of solar radiation received on India is 200?MW/km square (megawatt per kilometer square). With a geographical area of 3.287?million?km square, this amounts to 657.4?million?MW. However, 87.5% of the land is used for agriculture, forests, fallow lands, and so forth, 6.7% for housing, industry, and so forth, and 5.8% is either barren, snow bound, or generally inhabitable. Thus, only 12.5% of the land area amounting to 0.413?million?km square can, in theory, be used for solar energy installations. Even if 10% of this area can be used, the available solar energy would be 8?million?MW, which is equivalent to 5?909 mitoe (million tons of oil equivalent) per year.

A power structure mainly comprises of three contours; being Generation, Transmission and Distribution. On industrial level, there are several micro forces at play. In India, at this stage, Government forces are focused on deciding the scenario of Solar PV power generation Industries at play; but ultimately the market forces are set to decide the present and past of these Industries. As we acquire experience as manufacturers of textile, for more than three decades we know how it plays. Since, the license and inspector raj of Indian government has converted today; the open Industries scenario plays by the direction of international market forces.



Due to its geographical location; India receives high intensity solar radiation. Currently, India is pushing forward a massive plan of generating electricity by using solar radiation. The solar industry in India and worldwide has experienced strong growth over the past few years. In India, solar grid business offers good opportunities for SMEs as well as large enterprises, or for an investor of INR two lac to hundred crore or even more.

We have been focusing on generation of electricity from solar PV power plants with the existing legal and regulatory framework in order to set up solar power plants in India with existing central & state govt. policies against the framework of existing Electricity Act, of 2003. It is necessary that the investors ensure compliance to the qualification criteria laid out by the Jawaharlal Nehru National Solar Mission (also known as the National Solar Mission) or JNNSM policy by The Ministry of New and Renewable Energy (MNRE) of India. Many states in India have formulated renewable energy policies and many are in the process. Majority of states in India receive a considerable amount of solar radiation; therefore there is a high scope in tapping solar energy on commercial level.



The Jawaharlal Nehru National Solar Mission (also known as the National Solar Mission) or JNNMS is a major initiative from the Government of India and State Governments to promote ecological sustainable growth while addressing India’s energy security challenges. The Mission will adopt a 3-phase approach, spanning the period of the 11th Plan and first year of the 12th Plan (up to 2012-13) as Phase 1, the remaining 4 years of the 12th Plan (2013–17) as Phase 2 and the 13th Plan (2017–22) as Phase 3.

Below table gives the targets announced by JNNSM for each of its three phases:

  Phase 1(2010–13) Phase 2(2013–17) Phase 3(2017–22)
Grid-connected 1,100 MW 10,000 MW 20,000 MW
Off-grid 200 MW 1,000 MW 2,000 MW
Solar thermal collectors 7 million m2 15 million m2 20 million m2

IMPORTANT:
The first phase tragets are achived and in the coming months Government is also going to offer bid for 750MV for on-grid and off-grid. Any investor can invest in PV solar plants under RPO and REC mechanism at any given time for any capicity and any amount in any state.



Govt. of India, in all its recent policies relates the power sectors given importance towards harnessing the sun’s energy in various ways. Some of the financial and fiscal incentives or benefits under JNNMS which were announced by The Ministry of New and Renewable Energy (MNRE); of Govt. of India and other states in India.

  • Direct tax benefits:
    • Accelerated depreciation: The Central govt. at present allows for accelerated depreciation at the rate of 80-100% on a written down value basis for various renewable energy items under section 32 Rule 5 of the Income Tax Act, 1961.
    • Tax Holiday: Under section 80 (I) (A) of the Income Tax Act, the central govt. offers a 10 year tax holiday for all infrastructure projects.
  • Indirect tax benefits:
    • Specified renewable energy devices (including Solar Energy) and equipment can obtain excise duty exemptions /concessions.
    • Equipment for solar photovoltaic and solar thermal and power generation plants and machinery also enjoys a reduction in customs duty.
  • Direct Foreign Investments:
    Foreign investors can enter into a joint venture with an Indian accomplice for financial and for technical collaborations:
    • Proposals of up to 100 % foreign equity participation in a joint venture has qualification for an automatic route.
    • Government encourages foreign investors to set up projects on a: Build, Own and Operate (BOO) Basis.



Apart from above in direct benefits and incentives include:

  • Industrial clearances is not required for setting-up a renewable energy industry.
  • No clearance is required from central electricity authority (CEA) 51 for generation projects up to Rs.1 billion.
  • Soft loans are available through IREDA/Bank for renewable energy equipment manufacturing.
  • The project can also enjoy various incentives under Semi-conductor Policy act of 2007, as silicon used in STP & SPV power plants is a semiconductor.



Policy & regulatory framework for solar power generation under JNNMS draft mission:

The regulatory framework and scheme of the draft mission envisions similar content to the existing one.
Though, it does have some unique mandate to create an environment which enables large, rapid capital Investment in solar PV energy applications which also encourages technical innovations & lowers the cost in solar power generation.
The draft policy beholds following incentives for the investors:

  1. A proposed feed-in–tariff for various applications based on National Tariff Policy & Electricity Act, 2003.
  2. 10 years of tax holiday.
  3. Exemption on various duty/ taxes (customs & excise duty) on capital equipment & others.
  4. Capital subsidy for solar heating applications & rural electrification for a limited period.
  5. Proposes revision of tariff guidelines & subsidy levels before the beginning of each financial year to facilitate tariff announcement by the regulators.
  6. Feed-in–tariff from solar power will be distributed between Centre, State & the utility, where utility will be paying Rs. 3-5/Kwh & the balance by Centre & State in the ratio of (70:30).
  7. Mandatory solar power purchase obligation (depending on state’s solar resources) for states.
    Introduction to Renewable (Solar) Energy Certificate Mechanism to allow states to buy & sell certificates to meet this obligation.
  8. Single window clearance mechanisms; for all required permissions.
  9. Standard lease agreement for solar installation on govt. land.
  10. State transmission utility (STUs) mandated to provide connectivity from the nearest sub- station to the solar plant in a prompt and time bound manner. For successful implementation of the proposed National Solar Mission, the govt. must speed up the process which must be reflected in the suitable action program.

With the farewell of 2009 and the policy still in its draft phase, the vision has become more artificial.



State policies & subsidy:

"Winning the opportunity to receive the national subsidy is one thing, selecting a winning state is another!"
-Debashish Majumdar, Chairman IREDA.

Electricity is a subject matter of concurrent list, both state and centre has legislative and regulatory power. Many states, have formulated respective policies to attract investments and promote generation of renewable energy. Leading states who are working for generation of renewable energy are: Karnataka, Tamilnadu, Maharashtra, Gujarat, Haryana, Punjab, West Bengal and Rajasthan. As different states in India have different levels of development & market friendliness the scenario keeps changing constantly, it becomes very critical to choose a right state for solar power at present considering the market scenario.

At the state level, the Gujarat looks the most attractive state renewable portfolio standard (RPS) in 2012-2013 increased from 5% to 7%, with 1% of the photovoltaic power generation. In addition, additional PV incentive policies have been introduced. The state of Rajasthan, India has signed and a developer 1.5GW of photovoltaic projects although there has so far been installed goal of the state is vaguer, 10GW-12GW amount is only intended to be completed in the next 10 years.



Solar PV plays a more important role in a number of other states, such as Tamil Nadu, Andhra, Punjab Pradesh Kendall Karnataka and the state of Maharashtra, etc., they have taken a series of positive measures, and launched its own project planning and appropriate feed-in tariff.
In addition, India's national solar plan, it is expected that about 200MW off grid system will be completed in 2013, to the 2017 completion of 1GW to the 2022 completion of 2GW. Solar PV systems with diesel generators make the off-grid system in India have a huge potential.

IMPORTANT:
Please contact our experts for more updated information on regulatory framework and fiscal incentives or benefit schemes.
The challenges that manifold before an emerging economy like India; which populates million people below the poverty line. A country which faces crisis of energy security and which at the same time cannot refrain from contributing positively in prevention of climate change is left with no other solution than to switch over to renewable energy production. India has been empowered with a vast pool of renewable energy sources such as hydro, solar PV, wind, bio-mass etc. At presently renewable energy contributes about 9% (12.6 GW) of total installed electricity capacity in India.



The renewable energy scenario in India has a positive outlook; and the trend keeps growing. The existing laws and policies have made it easier for this sector to flourish. A developed India fuelled on solar power will be a model state for the world community. But still, there is a need to have a uniform national policy for setting up a solar power plant in India and selling of power to the consumer.
India’s recent success in solar, energy is just a beginning and trends and analysis with research of exciting developments to come reveal that with the continued support, policy investment and technological innovation, India could become a global leader in production of renewable energy. Although, some challenges are there; but a sound legal and policy framework is far more important in order to continue progressive trends. These policies, largely related to financial, fiscal incentives or special directives aimed to encourage/enforce utilities to buy renewable energy power, also promote companies to set up renewable energy projects and equipment companies to manufacture renewable energy equipment (BOS) for private and government entities for them to undertake R&D relating to renewable energy.
The solar PV industry is undeniably growing worldwide, and therefore is the trend to build large-scale, multi-megawatt photovoltaic (PV) power plants. The costs of PV modules and, system costs are decreasing, which in turn is resulting in lower costs per kilowatt. For this reason, banks and investors are finding solar energy an attractive market option. This is a key element for the industries expansion. The high-growth opportunity of solar power has attracted countless new entrants who are in an arms race to gain cost advantage by scaling capacities.



As technological improvements continue to take shape, and as costs continue to come down the technology will only get cheaper and more effective, this would create new markets and new opportunities. Last year, the price of solar panels and installations fell from 40 to 50 %. Incentives provided by Central, State, Local bodies and different Power Company programs reduce the up-front costs of solar PV system by up to 85% for off-grid projects.
Solar PV is a genuine energy generating technology. As time goes by, it would turn into a more and more of a profitable business. The future of renewable solar PV energy in India is limitless. India’s leadership in the clean energy program is scaling new heights, with the support and facilitation of economic & legal policies.
Cost of energy is skyrocketing every year. In fact over the last decade, many parts of India have witnessed increase in cost of electricity by an average of 10% per annum or more. Energy prices are only set to go high. By investing in a Solar PV System you have a guaranteed investment return. Solar grid business offers good opportunities for narrow and vast corporate enterprises. However, in order to enter and explore this field, rookies need to learn and focus on the key requirements; that we offer for the modern and skilled merchants and proprietors.
The financial benefits of solar power present an interesting opportunity for the savvy investor looking to diversify his/her portfolio or end use.

     

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