Need for increased module production
The National Solar Mission (NSM)’s target of 20 GW of solar power (to be distributed equally between solar PV & solar thermal) announced by the Federal Government of India and other State solar programs has enthused the Indian PV manufacturing industry. An additional 2,000 MW worth of off-grid applications, largely in the form of rooftop and telecom systems, is also being targeted. The NSM is an indicator of the Government’s shift in its energy policy with a view to meeting the challenges of climate change. From the mere 5 MW capacity which has existed up to 2009, the anticipated target is 12,000 MW - a phenomenal 2,400 times growth. Phase I (up to March 2013) will involve modules being manufactured in India, with Phase II (2013-2017) & Phase III (2018-2022) involving the production of cells and establishment of B2B in India. Poly-Si wafers will be spared. This will be the key driver for establishing PV manufacturing facilities - many of them from scratch.
The graph below depicts the estimated PV module production in India, assuming that the modules will not only fulfill NSM needs but will also be produced for export.
Bids for 10 GW
An example of investors’ faith in India is that earlier Generation-Based Incentive (GBI) schemes announced by the States of Gujarat, and Rajasthan received an overwhelming response, with bids for 10,007 MW. Of these bids, a total MW of 716 was approved, including solar thermal power projects; with 365 MW in PV projects. The GBI figures range from 10 to 15 per kWh provided over a period of 10 years from the date of installation. Despite a much lower tariff offered per kWh compared to other countries, Phase I of the NSM got off to a flying start, receiving applications for four times the targeted capacity. NTPC Vidyut Vyapar Nigam Ltd. (NVVN), the nodal agency designated to handle the sale and purchase of power, has already allocated 470 MW of solar PV capacity to seven beneficiaries following the bids received under Phase I. The deadline for commissioning is March 2013.
In a typical PV cycle chain, manufacturing generates an average of 3 to 4 jobs per MW. Installation generates an average of 35 jobs per MW (considering semi-automatic equipment is used). Maintenance and upkeep generate an average of 10 jobs per MW. Thus installation and maintenance will generate 350,000 and 100,000 jobs respectively in the PV sector under the NSM. The concentration of skilled manpower in the country will be an added advantage, making investment in the PV cycle chain a wise move, and attracting Engineering, Procurement and Construction (EPC) companies.
Focus of PV Industry Development in India
The commercial rate for power trading in India varies from 3.50 - 5.00 per kWh. With the rate for PV-generated power amounting to close to 15/kWh, the Government has extended the GBI to offset this high cost. This GBI being the largest component of the NSM, requiring the highest share of subsidy, it is essential to ensure that it meets the following four basic objectives:
(1) Develops and promotes PV technologies that provide an advantage by using indigenous manufacturing and technology development, and achieving scale of manufacturing.
(2) Minimizes cost to consumers.
(3) Offers merit and eminence in project execution by EPC contractors.
(4) Provides environmental sustainability socially and locally.
Investors will be looking for quality and durable modules that will ensure maximum yield throughout their life span. Investors will expect a return on their investment and revenue generation to repay borrowed money, in view of the high interest rates that reign in the country.
It would be true to say that India’s vision of being a future Solar PV nation is on course.
Interested in the Indian PV market? Solarplaza will organize The Solar Future: India on 24-25 of January 2011 in New Delhi - www.thesolarfuture.in