Solar Energy - India February 2009

Executive Summary SAMPLE Drivers: Positive government policies, entry of new players in polysilicon market, abundant solar radiation in India, export demand for solar equipment Challenges: High unit cost of solar energy, volatility in polysilicon prices, and dependence on raw material imports Market Drivers & Challenges Trends Competition Increase in M&A activity in renewable energy sector Domestic and international players are moving in solar energy space Public and private investments have increased in solar energy market Solar energy market in India is worth USD XX mn Accounts for less than x% of total installed renewable energy capacity Government plans to increase the share of renewable energy to y% by 2032 Solar energy is harnessed through either of two methods: Solar Thermal Plant/Concentrated Solar Power Plant Solar Photovoltaic (SPV) Major players include Company AA, BB CC etc New players entering the solar space include company DD Companies have increased their investments in solar technology and products

Drivers: Positive government policies, entry of new players in polysilicon market, abundant solar radiation in India, export demand for solar equipment

Challenges: High unit cost of solar energy, volatility in polysilicon prices, and dependence on raw material imports

Increase in M&A activity in renewable energy sector

Domestic and international players are moving in solar energy space

Public and private investments have increased in solar energy market

Solar energy market in India is worth USD XX mn

Accounts for less than x% of total installed renewable energy capacity

Government plans to increase the share of renewable energy to y% by 2032

Solar energy is harnessed through either of two methods:

Solar Thermal Plant/Concentrated Solar Power Plant

Solar Photovoltaic (SPV)

Major players include Company AA, BB CC etc

New players entering the solar space include company DD

Companies have increased their investments in solar technology and products

Introduction Market Overview Drivers & Challenges Trends Government Initiatives Competition Key Developments

Introduction

Market Overview

Drivers & Challenges

Trends

Government Initiatives

Competition

Key Developments

Renewable energy sources are gaining share in the total power capacity in India Principal renewable sources of energy are: Wind Energy Small Hydro upto 25 MW Biogas Solar Energy Renewable energy capacity reached ZZ MW, accounting for x% of the total installed power capacity in India Renewable energy witnessed the growth of x% in installed capacity from AA MW in 2002 to BB MW in 2007 The Ministry of New and Renewable Energy (MNRE) plans to take the total renewable energy capacity to more than X MW during 11 th Five-Year Plan Wind energy accounts for x% of the total renewable energy capacity SAMPLE * As of Feb, 20-- Source: Overview Power Sector Break-up x% Thermal y% Hydro z% Renewable u% Nuclear India plans to more than double its renewable energy capacity by 2012 a% x% 2002 b% y% 2007 c% z% 2008* Renewable Conventional

Principal renewable sources of energy are:

Wind Energy

Small Hydro upto 25 MW

Biogas

Solar Energy

Renewable energy capacity reached ZZ MW, accounting for x% of the total installed power capacity in India

Renewable energy witnessed the growth of x% in installed capacity from AA MW in 2002 to BB MW in 2007

The Ministry of New and Renewable Energy (MNRE) plans to take the total renewable energy capacity to more than X MW during 11 th Five-Year Plan

Wind energy accounts for x% of the total renewable energy capacity

Solar energy is at a nascent stage in India and the Solar Photovoltaic method of power generation is dominant Solar energy market is worth USD XX mn Solar energy accounts for a fraction (less than x%) of the total renewable energy installed capacity in India India has long term goal of generating x% of the country’s electricity from renewable sources by 2032 Solar energy can be harnessed through two methods – Solar Photovoltaic (SPV) - converts light directly into electricity E.g. Standalone Power Plant MNRE has funded xx grid interactive SPV power plants with total capacity of yy MW Solar Thermal/Concentrated Solar Power (CSP) - converts light first into heat and then electricity Examples Water Heating, Solar Ponds, Solar Cooker, Solar Air Heating SAMPLE Overview Capacity and Growth * As of October 31, 20-- Source: Distributed Renewable Power – Grid interactive Decentralized Energy Systems – Off-Grid EE nos. - Solar Photovoltaic Pumps A mn - Solar Cooker - Solar Thermal Program DD Mwp - Solar Power Plants X million Sq. m collector area Y million Sq. m collector area Solar Water Heating System BB nos. - Home Lighting System AA nos. - Solar Street Lighting XY MW - Solar power Distributed Renewable Power ZZ MW/ Sq.Km SPV Program Decentralized Energy Systems CC nos. - Solar Lantern Estimated potential Cumulative Achievement* Sources / Systems

Solar energy market is worth USD XX mn

Solar energy accounts for a fraction (less than x%) of the total renewable energy installed capacity in India

India has long term goal of generating x% of the country’s electricity from renewable sources by 2032

Solar energy can be harnessed through two methods –

Solar Photovoltaic (SPV) - converts light directly into electricity

E.g. Standalone Power Plant

MNRE has funded xx grid interactive SPV power plants with total capacity of yy MW

Solar Thermal/Concentrated Solar Power (CSP) - converts light first into heat and then electricity

Examples Water Heating, Solar Ponds, Solar Cooker, Solar Air Heating

Distributed Renewable Power – Grid interactive

Decentralized Energy Systems – Off-Grid

Drivers and Challenges Major export demand Minimal fuel and environmental risks New players entering polysilicon market Government initiatives Tropical Location Drivers Volatility in polysilicon prices Land scarcity High dependence on raw material import Solar Power Unaffordable due to high costs Challenges

Key Trends Trends Increase in M&A activity New players entering solar energy market Increase in public and private investments

Government is providing various direct and indirect incentives to encourage investment in solar energy.. SAMPLE In March 20-- the Indian government announced a semiconductor policy under its Special Incentive Package Scheme (SIPS) Direct Initiatives Indirect Initiatives Financial assistance amounting upto INR -- per KW hour in case of solar PV with maximum capacity of X MW and upto INR -- per KW in case of thermal Power plant for a period of x years Indian Renewable Energy Development Agency (IREDA) provides revolving fund to financing and leasing companies offering credit for the purchase of PV systems Direct Investment of up to x% is permitted in non-conventional energy sector through the automatic route Source: a% + Exemption from CVD x% USD – bn Fabrication* USD – bn Threshold NPV of investment y% Incentives in SEZ b% + Exemption from CVD Eco-System Incentives in Non - SEZ Type of Unit

In March 20-- the Indian government announced a semiconductor policy under its Special Incentive Package Scheme (SIPS)

Financial assistance amounting upto INR -- per KW hour in case of solar PV with maximum capacity of X MW and upto INR -- per KW in case of thermal Power plant for a period of x years

Indian Renewable Energy Development Agency (IREDA) provides revolving fund to financing and leasing companies offering credit for the purchase of PV systems

Direct Investment of up to x% is permitted in non-conventional energy sector through the automatic route

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