Off-grid PV – Policy and Regulatory enablers        September 3-5, 2012, Bangalore India
About RESolve•   Advisory firm with strong capabilities in Strategic, Regulatory , Commercial and    Technical aspects of ...
Overview1. Introduction2. Policy and regulatory environment3. Challenges4. Possible enablers                       Off-gri...
Why Off-grid?•   About 30% of India’s population(400 million) do not have access to electricity.•   Over 90% of this popul...
Type of off-grid customers.    PV as an alternative to Rural                     Urban    Kerosene               Lanterns,...
Overview1. Introduction2. Policy and regulatory environment3. Challenges4. Possible enablers                       Off-gri...
JNNSM Goals and Policy support• Off-grid PV systems target – 2 GW by 2022• Solar lighting – 20 Million households by 2022•...
Regulatory support : Off-grid RECs• Two models likely   1.   Regular model - Power producer sells RECS at the exchange in ...
Overview1. Introduction2. Policy and regulatory environment3. Challenges4. Possible enablers                       Off-gri...
Challenges – Big systems(>10 kW)1. Technical                   2. Financing            3. Others•   Service centers and   ...
Challenges – Small systems(<10 kW)1. Technical                              2. Financing                          3. Insti...
Overview1. Introduction2. Policy and regulatory environment3. Challenges4. Possible enablers                       Off-gri...
Enablers– Big systems(>10 kW)1. Technical                   2. Financing               3. Others•   National level        ...
Enablers – Small systems(<10 kW) 1. Technical                         2. Financing                              3. Institu...
Support for Innovative business modelsPay-as-you-go -Example :Simpa Networks• Metered solar energy system• Installed in ru...
PV Vouchers instead of Kerosene through                 Aadhar(UID)-                     Government                       ...
The biggest enabler – removal of subsidies!!                          Kerosene                                            ...
Thank youMadhavan Nampoothiri Founder and Director madhavan@re-solve.in
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Policy & Regulatory Enablers for off-grid solar PV growth in India-Madhavan Nampoothiri

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Policy & Regulatory Enablers for off-grid solar PV growth in India-Madhavan Nampoothiri

  1. 1. Off-grid PV – Policy and Regulatory enablers September 3-5, 2012, Bangalore India
  2. 2. About RESolve• Advisory firm with strong capabilities in Strategic, Regulatory , Commercial and Technical aspects of renewable energy projects• Founded by professionals from India and Germany with strong global exposure• Specific focus on Solar PV and Wind in India• Offerings in – Advisory on Concept-to-Commissioning of PV projects – Policy and Regulatory advice Off-grid PV 2
  3. 3. Overview1. Introduction2. Policy and regulatory environment3. Challenges4. Possible enablers Off-grid PV 3
  4. 4. Why Off-grid?• About 30% of India’s population(400 million) do not have access to electricity.• Over 90% of this population live in villages. Already electrified villages 163,641 De-Electrified villages 356,393 Un-Electrified villages 90,684 27,878 Un-Qualified villages (very less or no population)• Electricity transmission losses >30% (one of the highest in the world) Off-grid PV 4
  5. 5. Type of off-grid customers. PV as an alternative to Rural Urban Kerosene Lanterns, Home lighting, Home Lighting cooking Diesel Diesel water pumps Diesel generators Free/Subsidized Water pumps power Off-grid PV 5
  6. 6. Overview1. Introduction2. Policy and regulatory environment3. Challenges4. Possible enablers Off-grid PV 6
  7. 7. JNNSM Goals and Policy support• Off-grid PV systems target – 2 GW by 2022• Solar lighting – 20 Million households by 2022• Policy support Off-grid PV 7
  8. 8. Regulatory support : Off-grid RECs• Two models likely 1. Regular model - Power producer sells RECS at the exchange in addition to selling power at mutually agreed price 2. Franchisee model - Power producer to i. become a franchisee of a Discom ii. supply to the rural consumer as per the state electricity regulatory commission determined rates iii. The Discom pays the franchisee for the power generation and fulfills its RPO.But, what about metering? More clarity needed.. Off-grid PV 8
  9. 9. Overview1. Introduction2. Policy and regulatory environment3. Challenges4. Possible enablers Off-grid PV 9
  10. 10. Challenges – Big systems(>10 kW)1. Technical 2. Financing 3. Others• Service centers and • High initial cost • Subsidy disbursal technical assistance for timescale the installed products • Financing• Installation issues like structures• Lack of local workforce for assistance• Operation and maintenance cost Off-grid PV 10
  11. 11. Challenges – Small systems(<10 kW)1. Technical 2. Financing 3. Institutional• System specifications • Capital subsidies • In some cases, banks – Customization difficult like NABARD add – Reduces choice and one more level of innovation possibilities • Margin requirements bureaucracy – Energy on loans • Synergies across• Benchmark cost ministries – Framed for AC systems – Not suited for DC systems• Servicing and maintenance costThe ideas are elaborated by SELCO in the document The National Solar Mission – A practitioner’s Perspective Off-grid PV 11
  12. 12. Overview1. Introduction2. Policy and regulatory environment3. Challenges4. Possible enablers Off-grid PV 12
  13. 13. Enablers– Big systems(>10 kW)1. Technical 2. Financing 3. Others• National level • Encourage retail • Reduce subsidy Certification similar to financing for off-grid disbursal timescale PV Installer systems by banks Certification by North American Board of Certified Energy Practitioners(NABCEP)• Standardizing off-grid systems to reduce engineering cost Off-grid PV 13
  14. 14. Enablers – Small systems(<10 kW) 1. Technical 2. Financing 3. Institutional• Avoid specifying • Decentralized • Elimination of tiered components so as to procedures and localized subsidy disbursement facilitate customized financing to provide ease procedures solutions of access to capital • MNRE acts as single window for subsidy• Benchmark costs to • Reduction in margin disbursement be avoided (or) requirement on any loan • All subsidy claims by• Benchmark costs to taken for off-grid regional bank branches include cost of off- applications to be processed by grid solar and • Eliminate complications MNRE maintenance costs of loan procurement by • Transferring subsidy diverting ALL subsidies disbursement duties to towards soft loans NABARD at a later instead of capital stage subsidiesThe ideas are elaborated by SELCO in the document The National Solar Mission – A practitioner’s Perspective Off-grid PV 14
  15. 15. Support for Innovative business modelsPay-as-you-go -Example :Simpa Networks• Metered solar energy system• Installed in rural homesModel• Purchased for a small upfront cost• Like ESCO model – recharged by SMS by local agent• If meter runs out, it switches off and comes back once the user recharges the system• After 3-5 years, once enough recharges are done the system gets unlocked and the user gets free access to electricity. Off-grid PV 15
  16. 16. PV Vouchers instead of Kerosene through Aadhar(UID)- Government Part of Kerosene Subsidy Off-grid MNRE Fund Channel PDS Partners Recharge Code End User (Rural Solar Customers) Code Meter Off-grid PV 16
  17. 17. The biggest enabler – removal of subsidies!! Kerosene LPGPDS kerosene price - Rs.14.83/Litre LPG Domestic cylinder - Rs.399/CylinderGovernment Subsidy : Rs.0.82/Litre Government Subsidy : Rs.22.58/CylinderOMC under recovery : Rs. 32.70/Litre OMC under recovery : Rs. 346.79/Cylinder(Price in Delhi Effective Sept 1, 2012) (Price in Delhi Effective Sept 1, 2012) OMC Under-recoveryOMC Under-recovery 2010-11 : Rs. 21,772 Crores2010-11 : Rs. 19,484 Crores 2011-12 : Rs. 29,997 Crores2011-12 : Rs. 27, 352 Crores Diesel Free/subsidized powerOMC Under-recovery Examples2010-11 : Rs. 34,706 Crores • Tamil Nadu(for farmers) – Rs. 1950 crore (2012-13)2011-12 : Rs. 81,192 Crores – 25.5% total power solar in TN goes to agriculture • Andhra Pradesh – Rs. 4200 Crores(2011-12) – Rs. 5530 Crores(2012-13) Total Under-recovery on fossil fuels ~ Rs. 138,500 Crores(2011-12) – Equivalent to 13.8 GWp of solar Projects(@ Rs. 10 Crore/MWp) – Wishful thinking? Off-grid PV 17
  18. 18. Thank youMadhavan Nampoothiri Founder and Director madhavan@re-solve.in
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