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pManifold Indis_Solar PV_IIES_Workshop_report

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pManifold Indis_Solar PV_IIES_Workshop_report

  1. 1. INDIS Energy Green Energy Solutions professional people perspire partners 3/16/2011 persevere prepare policy process plan price profit pursue performance project potential Copyright (c) pManifold promote progress preserve plural planet Solar PV System - Technology, Risks, Manufacturing, EPC, O&M, Investment Coverage Report from IIES Workshop 29th Jan 20111 Co-chair: Rahul Bagdia, Co-founder pManifold, Head Energy Practice, Rahul.Bagdia@pManifold.com Akash, Founder & CEO INDIS, akash@indisIIc.com
  2. 2. SUPPORTERS www.iies.inWorkshop Speakers Industrial Association PartnerWorkshop Sponsors Workshop Organizer 2
  3. 3. 3Solar PV Business Models – Workshop Objectivesand Stakeholders 3/16/2011Objective of Workshop• Educate participants about various consumer Copyright (c) pManifold – oriented solar products• Cover the basics of Off – Grid Solar PV Plant Design• Discuss challenges & opportunities for cost reduction in MW Size Solar Pv Plants• Outline typical production processes for Solar products – PV Modules & LED Lights• Understand the financing issues & concerns from a Banker’s perspective 3
  4. 4. Solar PV – Workshop Content and Speakers 4 Activities/Topic Organization Speakers PositionTopic 0: Solar PV Business Models pManifold Rahul Bagdia Cofounder (Co-Chair) 3/16/2011Topic 1: Consumer products – applicationsand potentialSession 1: LED Lighting Solutions Intellizon Adithya R&D HeadSession 2: Other consumer products Solkar Ragunathan Founder Copyright (c) pManifoldTopic 2: Off-Grid / Rooftop Solar Solutions forBuildingsSession 1: PV System Design INDIS Energy Akash (Co-Chair) CEOSession 2: Case Studies, Financials, ROI Solkar Ragunathan FounderTopic 3: Grid connected (MW Size) Solar PV INDIS Energy Akash CEOplantsTopic 4: Component Manufacturing andProcesses in Solar PVSession 1: Module Manufacturing Solkar Ragunathan FounderSession 2: LED Light Manufacturing Intellizon Adithya R&D HeadTopic 5: Financing Solar/Renewables - Bankers SBI Abhijit AGMPerspective Chakravorty 4
  5. 5. Solar PV – Gap Analysis 5 4 key gaps for scale-up of Solar PV in India – High initial Capex; Limited knowledge, awareness & skill base; Lack of accurate solar insolation data; Lack of Easy Financing; 3/16/2011Elements Dimensions & Rationale • CapEx very high compared to other sources like a DG  High Cap Ex is limiting its 1 Initial Cap Ex adoption  but trends in cost reduction encouraging Copyright (c) pManifold • For solar products like LED lights, high initial cap ex limits its popularity Skill & • Awareness and activities both in academia & industry is historically limited  more 2 knowledge funding might be needed. More training to be imparted to have a large base of base professional Solar PV installers Solar • Accurate & reliable Solar insolation data is not easily & freely available 3 insolation • Local environmental data like pollution & dust also not available Database • Banks skeptical about Government payment guarantees at such a high rate 4 Financing • Lack of solar insolation data further increases uncertainty for the banks • Limited skill & knowledge base both in the banking industry & the Infrastructure companies 5 From Akash’s @ INDIS (akashslc@yahoo.com)
  6. 6. SOLAR PHOTOVOLTAIC (PV) - BUSINESS MODEL OPTIONS& CRITICAL SUCCESS FACTORS (CSFS)PV Business Value Chain 3/16/2011 Project Developer Copyright (c) pManifold Source: KPMG, India Stand Alone Applications 6 Excerpts from Rahul Bagdia’s @ pManifold presentation @ IIES 2011
  7. 7. MARKET SIZE AND GRID PARITY FOR SOLAR PV India has a potential market size comparable to other countries leading solar PV industry. 3/16/2011 India has low price of power consumption per household as compared to other Copyright (c) pManifold countries. India has low price of power per watt at peak hours compared to other countries. India has more capacity of electricity generation compared to other countries. 77 7 Excerpts from Rahul Bagdia’s @ pManifold presentation @ IIES 2011
  8. 8. Risks Development PhaseWHAT RISK EXPOSURE 3/16/2011 Copyright (c) pManifold 8 Excerpts from Rahul Bagdia’s @ pManifold presentation @ IIES 2011
  9. 9. LED Lights – 56% OF RURAL INDIA BURNS BIOMASS, WAX CANDLES & 9 KEROSENE LAMPS, SPENDING RS. 2-5 PER DAY FOR LIGHTING LED Lamps – Intelizon specs Customer’s perception – Need to 3/16/2011 • Dual Light Setting Demand • High: 3-4 hours & • Low: 7-10 hours • Farmers: In hut / House & in field “I feel safe to go in fields at night , My hut / Copyright (c) pManifold • 95% Efficient System with 100lm/W LEDs House & family has 100% safe & bright light” • Portable (400 gms) • Black Smith: Used to illuminate his workplace • Safety – No smoke, fire hazard, Electric Shocks “I can work after sunsets & that has increased • High Quality & reliability (1 yr warranty) by income” • Variants • Solar only, Solar + Grid charging • Anytime Mobile backup charging Cost breakdown of LED Street Light • Long Range > 250m focus light Others LEDsLED Street Lightning - Intelizon specs 8% 13%•2 – 3 X cheaper than existing Solar based streetlight solutions Mechanical Battery•1 LED & 3 LED variants 22% 15%•1 LED •Light – 5 lux (avg) over 25 Sq ft area from 10ft height•3 LED Electronics Solar Panel •Light – 23 lux (avg) over 25 sq ft area from 10th height 20% 22% •Comparable to 40W tube light based streetlights over 400 sq ft from a height of 19ft 9 Excerpts from Adithya’s @ Intellizon (adithya.nallanchakravarthula@intelizon.com)
  10. 10. LED Product Manufacturing/Assembly 10Standards Developing Distribution channel is the Key• Component standards – Specification based – Industrial / • Vendor Development / Establish Suppliers Consumer • Local Suppliers for better logistics• Outsourcing standards – Internal / ISO 9000 • Primary Suppliers 3/16/2011• Product build standards • Secondary Suppliers – backup / alternate • Build time & efficiency to maximize output • Procurement • Internal / ISO 9000 / Six Sigma • Negotiation for pricing & payments • Finished goods tracking for better servicing • Better lead – times Copyright (c) pManifold • Customs & duties clearanceCertifications • Quality• Process certification • Component level – SQC• Product certification • Sub Assembly level • BIS standards like IS 9000 • In – process quality • MNRE, STQC • Testing • IEC • Product level testing Cost breakdown of LED Lamp Others – 10% LEDs – 10% Scope Battery – 18% Mechanical – 20% • Huge market to tap – India & other developing nations Solar Panel - 12% • Fill the gap – See where you Electronics – 30% can fit based on your expertise • Product Development • Channel Development 10 Excerpts from Adithya’s @ Intellizon (adithya.nallanchakravarthula@intelizon.com)
  11. 11. Solar PV Off-Grid / Rooftop Solutions 11System Design – Decision Points & Criteria Other Key Considerations Parameters •Do not mix & match panels of different types or manufacturers • Site Details •PV Panel I – V curve important 3/16/2011 • Location (Shading) & Orientation •Temperature dependence (derating) is important • Latitude •Data on insolation should be accurate • Solar Irradiation / Insolation •System sizing done backwards: Load Sizing first, followed by • Others (Dust, Soiling) inverter sizing, battery bank sizing, charge controller • Temperature & Weather Patterns sizing, & PV array sizing Copyright (c) pManifold • Wind, Cloudiness, Rain, Snow •Site Details • Area available & Array Size desired •Utility Conditions (440V) • Foundation required (type of roof, on ground) •Some things to know • Government Incentives (<100 KW or >100 KW) •Rajasthan will produce less power in summer than Himachal Pradesh (Temp effect) • Utility Conditions (440V) •Thin films have less temperature deration than M-Si or C-Si Other Decisions to be made •Improper installation of PV modules might disqualify them • Panel Technology (C-Si, M-Si, Thin Films) from the Warranty • # of strings, # of panels in series & parallel (Array total •PV modules comprise ~70% of the total cost voltage & current) •Plenty of opportunities for innovation in Modules, Racking • Comparison of panels from different Panel (mounting), BOS, Processes Manufacturers (Panel Specs) • Derating factor (75% to 80%; could be as low as 60% - 70% in India due to dust) Cost of 1 KW Solar System • Applicable sun hours available (4 hrs to 6 hrs is typical; • With Battery – Rs. 3.00 lakhs safe to assume an avg. of 4.5 hrs) • Without Battery – Rs. 2 lakhs • Array tilt angle & orientation • Power generated – 5KW hr a day • Conductor sizing (current, safety); Voltage drop • No. of days in a year – 320 days (location dependent) • Grounding • Total units generated per year – 1600 units • Autonomy • Life of the solar module – 20 – 25 years 11 Excerpts from Akash’s @ INDIS (akashslc@yahoo.com) presentation @ IIES 2011
  12. 12. MW Size Solar PV Plants 12Optimal Solar Project Current Issues & ChallengesFinancing Profile & Team • Successful project finance depends on making the numbers work for investors with a high degree of predictability 3/16/2011 • Project promoters need to arrange working capital & some personal• A larger number of investors can investment (skin) to make the financing math work make financing very • Inexperienced Developers complicated • Due to the slower uptake & launching of projects, module vendors might get more vertically integrated & get involved in financing Copyright (c) pManifold• Developers prioritize on highest projects PPA prices with creditworthy • Availability of engineering talent & an indigenous eco-system power purchasers where the PPAs & What they are good for speed to commercial operation • Finance ability of large utility scale projects remains difficult date is the fastest because of project size, PPA pricing, siting risks, land availability &• Experienced Developer (or cost, transmission line (evacuation issues), grid stability, technology risk & other factors International tie ups) • Selling PPAs / Acquiring Land – rather than executing projects –• Minimum project size might be a short-term trend • Prices in PPA may be too low to be financeable – leads to• Bankable Modules & EPC cancellation of the project• Valid PPAs and site control for • The proposed feed in tariff (LCOE) for PV was Rs 17.91 per kWh but with reverse bidding project developers had to submit a the life of the PPA discounted tariff which they could offer. Bids for PV projects have• Team approach that reduces been in the range of INR10.95/kWh to INR12.76/kWh with average feed in tariff being INR12.1/kWh transaction costs • Large projects need to actually come online & actually deliver electricity (in California 7GW of PPAs signed but only 100-200 MW have come online) 12 Excerpts from Akash’s @ INDIS (akashslc@yahoo.com) presentation @ IIES 2011
  13. 13. MW Size Solar PV Plants – Cost Reduction Opportunities 13Many incremental opportunities for cost reduction Balance of System (BOS) cost can beare available across the value chain reduced by Rs. 10/W – Rs. 40/W 3/16/2011 Copyright (c) pManifold >50% Reduction in LCOE is possible using new innovation 13 Excerpts from Akash’s @ INDIS (akashslc@yahoo.com) presentation @ IIES 2011
  14. 14. Solar PV Module Manufacturing 14Module Production Processes ThroughputLine Steps •For typical dimensions of a module, possible to cure 3 modules per run1) Cell Testing In the case the module manufacturer is not •A run is around 20 minutes, depends on curing time of the material sure about the quality of the cells used2) Cell Sorting Cells are sorted into performance groups •Single‐stack laminators usually designed for 10-20 MW production capacity 3/16/20113) Stringing Cells are aligned and ribbon is deposited •Multi‐stacks laminators designed for bigger capacities, like 25 MW straight lines4) Busing Cells are connected by soldering string ribbons Lamination Area •Effective lamination area is actually not an issue for laminators Copyright (c) pManifold5) Lamination The EVA, the cells and the back sheet are •The module makers are free to choose the size of the laminator bonded together •No trend from module makers to ask for very large area. Except in thin film6) Framing The laminated assembly is framed •where AMAT’s technology require equipment able to process 5.7m² modules7) Module Testing The final module is placed in a sun simulator in order to test its performance Uptime Process •Uptime an important parameter for the customer to choose their Solar Cell equipment Repeats Cell •A key parameter to have a good uptime is the cooling system for the Module Testing & modules located after the lamination unit. Then, the lamination area Sorting keeps the operating temperature Few Points to Note Module Testing Stringing • Amorphous cells – Obsolete , low efficiency 6-8% - low cost – low life • Mono/Multi crystalline – proven technology, long life, high efficiency 18 – 20%, high price Framing Busing • Thin Film Cells – emerging technology , yet to prove commercial , high efficiency 13- 16%, low price, long life – yet to mature commercial scale Lamination • THE FUTURE WILL BE THIN FILMS WITH EFFICIENCY 18% AND PRICE USD 1 PER WATT BY 2013… 14 Excerpts from Ragunathtan’s @ Solkar (ragu@solkar.in) presentation @ IIES 2011
  15. 15. Solar PV Project Financing 15From Banker’s Perspective ofDebt Solar PV Debt Proposal • DPR with proven technology tie up• PROJECT 3/16/2011 • PPA• PROMOTER • Tariff, Discounts Rs.10.95 against Rs.17.91• DEBT : EQUITY • NVVN or Gujrat Model• VIALIBILITY • D : E -- 70:30  60 : 40  50 : 50• TENOR, DSCR Copyright (c) pManifold • DSCR – 1.75  1.50• STATUTORY CLEARANCES • Tenor• SECURITY • Technical Evaluation by Independent Technical Consultant acceptable to the Bank • EPC Contract : Fixed Time – Fixed CostKey Take Aways • Credentials of PV Module Suppliers • Domestic Suppliers – Guarantees• The Banks are not skeptical on PV funding. Several proposals of PV projects with sizes between 20-25 • Health of DISCOMS MW are being appraised by SBI. However, this being a • Capacity Utilization Factor, Radiation Data reliability sunrise sector with no industry benchmark data, the projects will undergo in depth due diligence by the • Evacuation set up Banks • Off Grid Captive Units appraised on the basis of• Unsure about health of Discoms & Govt backed overall cash accruals of the business entity guarantees to buy electricity at Rs. 17/unit for 25 years• Promoters should try to de-risk the business proposal for the bankers MID CORPORATE SBU OF SBI CATERS TO CLIENTS WITH CREDIT REQUIREMENT OF Rs.10 Cr AND ABOVE 15 Excerpts from Abhijit’s @ SBI (abhijit.c@sbi.co.in) presentation @ IIES 2011
  16. 16. PMANIFOLD – GROWTH SOLUTIONS FOR EMERGING BUSINESSES 16RESEARCH, ONLINE/OFFLINE STAKEHOLDER ENGAGEMENT & CONSULTING pManifold Energy Practice Team 3/16/2011 • Smart Distribution • Energy Conservation Copyright (c) pManifold • Green Generation Thank You • Rahul.Bagdia@pManifold.com (+91 95610-94490) www.pManifold.com • Akash akash@indisIIc.com (+91 97181-12443) www.indis-energy.com 16

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