India Solar Market September 2019 An Overview · Energy, and Data Centers, Kehua covers over 13% of the whole UPS market and is No.1 UPS Brand in China and No.1 Industrial UPS Brand

India Solar Market – September 2019

An Overview

Research provided by

Gold Partners

http://www.kehua.com/

https://www.renewableenergyindiaexpo.com/

https://mercomindia.com/research-2/

©2019 Mercom Capital Group, llc. ALL RIGHTS RESERVED. I www.mercomindia.com I [email protected]

Index

Executive Summary………………………………………………………………………………………………..………………………………...….……… 4

Current Solar Market – Installations, Pipeline…………………………..…………..…………………………………………………………..……………. 5

Policy Drivers…………………………………………………………………………………………………………….………...…………………….……… 8

Tenders & Auctions…………………………………………………………………………………………………..…………….…………….…….…..…… 13

Share of Solar…………………………………………………………………..…………….……………..…………..…………..…………..…………..…… 16

Project Development by State……………………………………………………………………………..…………………………………………………… 19

Solar Trade…………………………………………………………………..………………….………………………………………………………...……... 22

Rooftop Solar……………………………………………………………………………………………………………..……………….…………………….. 24

Market Leaders…………………………………………………………………………………………………………………………………...……………… 26

Solar Market Outlook……………………………………………………………………….……………………..…………………..………………………… 28

- 2 -

http://www.mercomindia.com/

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Executive Summary

• Indian solar market added ~3.2 GW of solar in 1H 2019, with cumulative solar installations crossing 31.5 GW as of Q2 2019. Mercom India Research

forecasts India to install over 8 GW of solar capacity in the calendar year 2019. The report estimates solar installations in India to reach approximately 70

GW by the end of 2022 based on current market dynamics. The solar project pipeline in India is now approximately 22.3 GW, according to Mercom’s India

Solar Project Tracker. Currently, about 37.4 GW of tendered projects are awaiting auction.

• By the end of Jun 2019, utility scale solar projects accounted for 88% of the total solar installed capacity with ~27.8 GW and solar rooftop accounted for

12% with ~3.8 GW installed capacity.

• In 1H 2019, ~30 GW of solar PV projects were tendered by state and government agencies, according to tender tracker. Over 7.3 GW of solar PV projects

were auctioned during 1H of 2019. Even though there were plenty of tenders issued in the country, tariff caps have added a new challenge for developers.

Developers are reluctant to bid at the levels prescribed by state agencies instead of a market-based auction in which the lowest bid wins. This has caused

several developers to refrain from participating in these auctions, and several auctions have been undersubscribed recently.

• Renewable energy (including large-hydro) now accounts for over 35% of the total power installed capacity in India, with solar comprising nearly 8.7% as of

Jun 2019. Within renewables, solar accounted for ~25% of the installed capacity.

• Karnataka is the top state for solar PV installations with over 6 GW of cumulative installed capacity as of Q2 2019. The state accounts for 22% of the total

installed solar capacity in the country.

• In Q2 2019, the Indian solar sector received investments to the tune of $1.85 billion (~₹132.66 billion).

- 4 -



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https://mercomindia.com/product/india-solar-project-tracker/

https://mercomindia.com/product/india-solar-tender-tracker/

Current Solar Market – Installations, Pipeline


India Solar Cumulative Installations By Policy (MW)

- 6 -

0

1,000

2,000

3,000

4,000

All India Cumulative Utility-scale Solar Installations By Policy Type (MW)

Cumulative Large-Scale Solar Installations ~27.8 GW

Source: Mercom India Research (Jun 2019)




India Solar Project Pipeline By Policy (MW)

- 7 -

0

5,000

10,000

15,000

20,000

25,000

30,000

India Utility-scale Solar Project Pipeline (MW)

Projects Tendered, Pending Auctions (~34.4 GW)

Projects Under Development (~22.3 GW)




Policy Drivers


Policy Updates

❑ DISCOMs Mandated to Maintain Letter of Credit as a Payment Security Mechanism to Buy Power – The Minister for Power and New & Renewable

Energy (MNRE) announced the approval of a proposal to make it mandatory for distribution licensees to open and maintain an adequate Letter of Credit

(LoC) as a payment security mechanism under power purchase agreements. Power generators in India have battled the challenge of delayed or non-

payments by distribution companies (DISCOMS) for decades.

❑ Draft Guidelines for Grouping Solar PV Inverters for Testing in Labs - MNRE issued draft guidelines for series approval (grouping) of solar PV inverters

to conduct testing in labs for the implementation of “Quality Control Order on Solar PV Systems, Devices and Components Goods 2017.” These guidelines

are applicable for solar PV based off-grid, grid-tied, and hybrid inverters of capacities up to 150 kW. This draft guideline is specific to testing approval of

‘series’ of products instead of approving each product model individually. This was a sticking point as there was no clarity when the original order was

issued and manufacturers complained that getting approval for individual models was expensive, cumbersome and caused delays.

❑ MNRE Orders Setting Up of Dispute Resolution Committee for Solar and Wind Sectors - MNRE issued an order to establish a system to resolve

disputes between solar and wind energy developers and the Solar Energy Corporation of India (SECI) and National Thermal Power Corporation (NTPC).

The Dispute Resolution Committee (DRC) will be handling cases pertaining mostly to time request extensions along with various other common issues.

These would be cases wherein time extension decisions by SECI are challenged based on contract terms.

❑ CERC Finalized the Fifth Amendment to its Deviation Settlement Mechanism Regulations – The Central Electricity Regulatory Commission (CERC)

issued its fifth amendment to the deviation settlement regulations which include two new clauses: a daily base deviation sett lement mechanism (DSM) and

a time block DSM. The commission has provided relief to generators through exemption from additional charges.

- 9 -




❑ CERC Issued Draft Regulations for Power System Development Fund - CERC issued draft regulations for the Power System Development Fund (PSDF).

The National Load Despatch Center will be the nodal agency for the implementation of the projects or schemes under these regulations. The fund is to be

utilized to fund projects or programs for the creation of necessary infrastructure, necessary transmission systems of strategic importance based on operational

feedback by load despatch centers for relieving congestion in the interstate transmission system and intrastate systems which are incidental to the ISTS. The

PSDF will be maintained and operated through the public account of India.

❑ PGCIL Proposes Blueprint for Solar and Wind Power Evacuation from Western Region – The Power Grid Corporation of India Limited (PGCIL), came up

with a proposal to establish a transmission system for the evacuation of power from potential solar and wind energy zones in the country’s western region. The

proposal is to develop the transmission infrastructure in two phases. A total of 20 GW of solar and 9 GW of wind projects have been planned in Phase-I (up to

December 2020), and 30 GW of solar and 7.5 GW of wind are planned for Phase-II (December 2021).

❑ MNRE Asks Developers to Use Robotics for Efficient Use of Water in Solar Projects - The MNRE issued a letter recommending the efficient utilization of

water for cleaning utility-scale solar projects. The ministry noted that the project developers are currently using too much water for cleaning solar modules, and

they should try and minimize wastage and recommends the use of robotic cleaning technology, which uses less water for cleaning solar projects.

❑ Clarification on Import Conditions for Lead-Acid Batteries Used in Solar Projects - MNRE issued guidelines for the import of secondary cells and

batteries of lead-acid and nickel-based chemistries that are utilized in solar project development. It clarifies that secondary cells and batteries of lead-acid or

nickel-based chemistry type, are covered under the Indian Standard (IS) 16270 for storage batteries that are used in solar projects. The ministry has also

issued draft guidelines for performance testing of batteries (lead-acid and nickel-based chemistry type) series approval for mandatory registration with the

Bureau of Indian Standards (BIS).

Policy Updates

- 10 -




Challenges Faced By Industry

- 11 -

Availability of

Financing

Landand

Transmission

PPA Renegotiations and

CurtailmentTariff Caps Payment Delays




Case for Solar in India

- 12 -

StrongGovernment

Support for Solar

Transition to Renewables is

Happening Now

Large Domestic Market

Solar Cheaper than Coal in the

Country

Top 3Solar Market

Globally



Tenders and Auctions


Solar Tender & Auction Activity in 1H 2019

- 14 -

• In 1H 2019, approximately 30 GW of solar projects

were tendered by state and government agencies.

• Over 7.3 GW of solar PV projects were auctioned

during the period Jan-Jun of 2019.

• Even though there were plenty of tenders issued in

the country, tariff caps have added a new

challenge for developers. Developers are reluctant

to bid at the levels prescribed by state agencies

instead of a market-based auction in which the

lowest bid wins. This has caused several

developers to refrain from participating in these

auctions, and several auctions have been

undersubscribed recently.

• In the interim, we may continue to see auctions

getting postponed and tariff caps adjusted multiple

times until they are viable enough for developers to

bid.

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

Jan-19 Feb-19 Mar-19 Apr-19 May-19 Jun-19

India Solar Tenders and Auctions in 1H 2019 (Jan-Jun)

Tenders (MW)

Auctions (MW)

Source: Mercom India Solar Tender Tracker




Solar Bidding Trends

- 15 -

2.8

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2016-17 2017-18 2018-19 2019-20

Low

Tar

iff/

Bid

s (₹

/kW

h) Low Tariff (₹/kWh)


Lowest Solar Bids in Reverse Auctions in India (₹/kWh)

Safeguard Duty Imposition



Share of Solar


Solar Accounts for 51% of New Power Capacity Additions in 2018

- 17 -

27.5%

14.0%

50.7%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2010 2011 2012 2013 2014 2015 2016 2017 2018

Shar

e o

f N

ew C

apci

ty A

dd

itio

ns

%

Other Renewables

Small Hydro

Solar Power

Wind Power

Hydro

Nuclear

Gas

Coal

Share of New Power Capacity Additions in India (2010-2018)Solar and Wind account for ~65% of New Power Capacity Additions in 2018

Source: Mercom India Research (Jun 2019)Data from CEA, MNRE, Mercom India Solar Project Tracker



©2019 Mercom Capital Group, llc. ALL RIGHTS RESERVED. I www.mercomindia.com I [email protected] - 18 -

Solar Makes Up ~8.7% of India’s Total Installed Energy Capacity

Coal53.9%

Gas6.9%

Nuclear1.9%

Lignite1.7%

Diesel0.2%

Large Hydro 12.6%

Wind Power 10.1%

Solar Power 8.7%

Bio-Power 2.7%

Small Hydro 1.3%Waste to Power 0.04%

Renewable Energy35.4%

India - Cumulative Installed Power Capacity Mix (%)Renewables (including Large Hydro) comprise over 35% of India's total installed capacity, with solar accounting for ~8.7%. Among renewables, solar accounts for ~25% of the installed capacity

Source: Mercom India ResearchData from CEA, MNRE, Mercom India Solar Project Tracker (Installed Capacity as on 30 Jun 2019)

• Renewable energy sources (including

large hydro) accounted for ~35.4% of the

India’s power capacity mix at the end of

Jun 2019.

• Cumulative solar installations at the end of

June 2019 reached 31.5 GW, representing

8.73% of the total power capacity in India.

• Among the renewables, solar accounted

for approximately 25% of the installed

capacity.

• India added a total power capacity of

around 8 GW in the first half of 2019.

Solar and wind accounted for 56% of the

new power capacity added during the

period.



Project Development by State


India Solar Cumulative Installations By State (MW)

- 20 -

0 2,000 4,000 6,000 8,000

PuducherryAssam

LakshadweepJammu & Kashmir

Arunachal PradeshGoa

TripuraAndaman & Nicobar

Dadra and Nagar HaveliChandigarh

Himachal PradeshDaman and Diu

New DelhiJharkhand

HaryanaWest Bengal

KeralaBihar

ChhattisgarhUttarakhand

OdishaPunjab

Uttar PradeshMaharashtra

Madhya PradeshGujarat

Tamil NaduAndhra Pradesh

TelanganaRajasthanKarnataka

<20 MW

20-100 MW

100-1,000 MW

1,000-2,500 MW

2,500-5,000 MW


India Utility-scale Cumulative Solar Installations by States (MW)

Cumulative installed large-scale solar capacity now

stands at ~27.8 GW




Solar Project Development Pipeline By State (MW)

- 21 -

0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000

Haryana

Andaman & Nicobar

Kerala

Punjab

West Bengal

Odisha

Assam

Telangana

Madhya Pradesh

Tamil Nadu

Uttar Pradesh

Andhra Pradesh

Gujarat

Karnataka

Rajasthan

Maharashtra

Across India


Large-scale Solar Project Development Pipeline by State (MW)

Solar projects under development pipeline total about 22.3 GW



Solar Trade


Import-Export Trends in the Indian Solar Market

- 23 -

• Solar modules and cells worth $399 million (~₹27.75 billion) were imported by India in Q2 2019, a steep decline of 39% when compared with ~$650 million (~₹45.80

billion) of solar cells and modules that were imported by India in Q1 2019. YoY, the solar imports also decreased by 9% in comparison to Q2 2018.

• In Q2 2019, India exported solar cells and modules worth $34.8 million (~₹2.42 billion), a 4% rise when compared to the previous quarter. In Q1 2019, India had exported

solar cells and modules worth $33.3 million (~₹2.34 billion).

China

Vietnam

Thailand

Singapore

Taiwan

Hong Kong

Others

Country-wise Breakdown of Indian Solar Imports (%)Q2 2019 (Apr-Jun 2019)

Data from Department of Commerce

USA

Belgium

South Africa

Somalia

UAE

Korea

Spain

Oman

Others

Country-wise Breakdown of Indian Solar Exports (%)Q2 2019 (Apr-Jun 2019)

Source: Mercom India Research



Rooftop Solar


Rooftop Solar Installation Growth

- 25 -

• Rooftop solar installations increased slightly in Q2

2019 with 292 MW, when compared to 263 MW of

rooftop solar projects added in Q1 2019.

• India needs to accelerate the growth of its rooftop

solar segment compared to large-scale solar.

• Cumulative solar rooftop installations in India

totaled ~3.8 GW as of June 2019. Rooftop

installations still only make up 12% of total solar

installations in the country.

• Most of the growth in the rooftop segment is

currently coming from C&I market.

• Mercom forecasts around 1 GW of rooftop solar

capacity to be added by the end of 2019, primarily

due to the disruption and slowdown caused by

general elections, financing challenges, and net-

metering issues.

0

100

200

300

400

500

Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19

Rooftop Solar Installations by Quarter (MW)




Market Leaders


Indian Solar Market Leaders

Indian Solar Market Leaders 2018

© 2019 by Mercom Capital Group, LLC. All Rights Reserved.Source: Mercom India Solar Market Share Tracker



https://mercomindia.com/product/mercoms-india-solar-market-leaderboard-2019-market-shares-and-profiles/

https://mercomindia.com/product/mercoms-india-solar-market-leaderboard-2019-market-shares-and-profiles/


Solar Market Outlook


India’s Solar Installation Outlook

-29-

6 12 177

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

50,000

0

2,000

4,000

6,000

8,000

10,000

12,000

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019F 2020F

Cu

mu

lati

ve In

stal

lati

on

s (M

W)

An

nu

al In

stal

lati

on

s (M

W)

Annual Rooftop Solar Installations (MW)

Annual Utility-scale Solar Installations (MW)

Cumulative Solar Installations (MW)


India Solar Demand Forecast (MW)

4,313

9,782

8,338

2,313

9851,044998

Note: 'F' represents forecast




About Mercom India

- 30 -

Mercom Communications India (Mercom India) is the go-to source for information and insight into India’s cleantech industry. A subsidiary of U.S.-based Mercom Capital Group – a global clean energy communications and consulting firm – Mercom India is widely recognized for its leadership and influence in helping to shape India’s rapidly growing clean energy sector.

For clean energy organizations looking to expand market influence or eyeing initial entry into India’s renewable energy industry, Mercom India provides invaluable research, news, consultation, and communications services.

www.MercomIndia.com

[email protected]

@MercomIndia



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Documents

India Solar Market September 2019 An Overview · Energy, and Data Centers, Kehua covers over 13% of the whole UPS market and is No.1 UPS Brand in China and No.1 Industrial UPS Brand