Potential for Industries related to Solar Power in India and M&A opportunities in C-Si module Segment Institute of Management Technology Ghaziabad Akash Jauhari IMT Ghaziabad
Background: Solar Power Solar Power Value Chain Related Business: Production, Technology Providers, Power Plants, Finance, Consultancy, Engineering & Architect Indian Perspective: Role of MNRE, IREDA, CERC, JNNSM Companies present in India Akash Jauhari IMT Ghaziabad
Annual revenues from C-Si module market in India to expected to grow from $ 611 million to $ 3030 million between 2013-2022, with a CAGR of 18%.
Thin film to remain competitive to C-Si technology in India, as cheaper and better suited to Indian climate. Cumulative domestic demand for thin film module to over 3.5 GW between 2013-2022. Target price should be $1/W.
Rather than setting up a C-Si module manufacturing plant in India, it will be financially more viable to acquire a existing firm and expand according to requirements.
Polysilicon and Wafer & Ingot segment, which are currently non existent in India, are expected to be $ 2300 million and $ 1500 million respectively
Akash Jauhari IMT Ghaziabad
Recommendations Existing module manufacturers in India should invest in forward integration, mainly in inverters, power project and project financing. – margin get higher Indian Players should focus on identifying customers in hot markets of Italy, Japan and US. They need to invest in improving their supply chain and sales channel in order to competitive. Global leaders with core competencies in polysilicon and Wafer & ingot production should invest in India, as technology is not available. – Hemlock semiconductor & REC. It is better to invest in thin film power plant rather than C-Si in India, due to cost & performance issues. Expected to break even in 10 years, while CERC PPA’s available for 25 years at Rs 15.3 per KW hr. Akash Jauhari IMT Ghaziabad
Recommendations For foreign companies & investors: Explore opportunities to work with Indian firms like joint projects, collaborations and M&A. This will help to access domestic market faster and capture domestic market easier. In C-Si Module segment, prospect target companies are – Websol Energy Ltd. Kolkata PV Power tech Mumbai Akash Jauhari IMT Ghaziabad
Estimate for Module domestic market in India. Akash Jauhari IMT Ghaziabad
Setting up a Thin Film Power Plant Project Project Appraisal and financing.
IREDA Guidelines for solar energy lays the Financing options for the project.
Max. Loan up to 70%, Rated ranging from 11.25 – 11.9 %
Initial Cost as taken as given by CERC in benchmark cost for solar projects, 2011-12
Estimating Cash flows for a 10 MW project, assuming 50% debt taken at 11.5% 20 years.
Total Initial cost comprising of land, civil works, modules etc comes out to be 27.13 million. Straight line depreciation for 20 years. Tax = 35%
Akash Jauhari IMT Ghaziabad
Setting up a Thin Film Power Plant in India Akash Jauhari IMT Ghaziabad
Solar P.V Value Stack Source: Green Rhino Energy Akash Jauhari IMT Ghaziabad
Cell & Module Production in India Annual Production of Cell & Module in India & total Import and export related to solar industry ( Source: MNRE annual presentation, Sept 2010) Akash Jauhari IMT Ghaziabad
C-Si module Manufacturers in India Source: Company websites Akash Jauhari IMT Ghaziabad
Cell & Module Production in India Rather than setting up a new C-Si plant, its better to Acquire an existing production facility. This will help to access the market faster and hence higher Market Share in course.
Short listing criteria from MNRE list of registered companies
Core competency of the firm to be PV module manufacturing. Manufacturing capacity to be 25MW or more.
Companies which are subsidiaries of National/International heavyweight groups have been excluded, as the purpose of this document is prospective acquisition.
Government companies have been excluded for the same above reason.
Companies which are considerably into services like installations or maintenance along with manufacturing have been avoided.
Prospect Target : PV power tech Mumbai Group of Companies under Sun Pharma: Caraco Pharmaceutical Laboratories Sun Pharmaceutical Industries Inc. Sun Pharmaceutical (Bangladesh) Alkaloida Chemical Company Exclusive Group Ltd. Chattem Chemicals Taro Pharmaceutical Industries Ltd. Owner : Mr. Dilipsanghvi Board Members MEMBERSHIPS* Chairman of the Board and Chairman of Sun Pharma Taro Pharmaceutical Industries Ltd.
Company has good international networks in Europe –Germany , Belgium