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- 1. www.indianpowersector.comPower Plus Consultants. SOLAR A brief comprehensive handbook for developers and investors to maximize their returns. How much can you expect as returns from your investment into solar. Choose the best alternative Know your Policy Know your Buisness Model Know your Open Access state Choose the best alternative Know your Policy Know your Buisness Model Know your Open Access state A brief comprehensive handbook for developers and investors to maximize their returns. How much can you expect as returns from your investment into solar.
- 2. 2 Power Plus Counsultants Why Solar Energy Make Sense in India What is the difference between Indian solar PV market w.r.t solar markets in E.U and U.S.? The answer is simple for E.U. and U.S. solar or renewable power is a green and safe alternate option to Coal and Nuclear based production. However, for India it is utmost necessity for fueling the sustainable growth. Key Drivers •Energy Deficit of 12% of peak demand •If India continues to grow at an average rate of 8% for the next 10 years, the country's demand for power is likely to soar to 315 to 335 GW by 2017 which will require a generation capacity of 415 to 440 GW (Mckinsey Report) •About 68.1% of India's energy generation capacity is from fossil fuels with coal accounting for 58% of India's total energy consumption (Central Electricity Authority) •High dependence on imports for energy requirement , total imports represents 13% of the total primary energy supply ( Energy Statistics Report 2013) •Rising price of electricity based on coal and gas •Environmental concerns How Solar Fits in •High Solar Irradiation (annual average GHI of 5.1) in most of the parts of country •Large number of sunny days available (apprx. 330 ) •Availability of large area of land at comparatively low costs •High solar potential near main load areas in country (Western and Southern India) •Support from Government under NAPCC and Renewable Purchase Obligation (RPOs) •In parity with other resources of energy generation with costs still going down •Can be used both for centralised power generation capacity addition as well as off grid for decentralised use of energy Choose your Policy Right
- 4. 4 Power Plus Counsultants Choose your Model: Business Models for Solar Plants APPC + REC •The power generated is sold to the discom at APPC. •The tariffs offered by various discoms are relatively low and thus the viability of the project largely depends on the revenue generated through REC sale. Captive model •The power is sold to the off-taker through a captive route. •It is a win-win proposition for both the parties as both can achieve significant profits by this type of collaboration. Third party sale through open access •A lucrative market in states where industrial tariffs are in the range of INR 5 – 5.50. •The financial strength of the off-taker makes the PPA credible. •Open access clearances are a hurdle, as discoms do not wish to let go their high paying consumers easily Bidding in state policies/ NSM •The biddings are crashing as new or strategic developers bid aggressively. •The PPAs are however one of the most bankable. •Also a lot of capital and time is invested in the bidding process. Choose your Open Access state: Comparing the returns as per existing industrial tariffs Source: PPC financial model Average Capex for Open Access Project: INR 80-85 million 13.07% 16.67% 21.26% 27.06% 34.24% 0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 30.00% 35.00% 40.00% 90 Mn 85 Mn 80 Mn 75 Mn 70 Mn EquityIRR CAPEX in Million INR Most conducive state for Open Access projects. 5 MW project by Emvee already instsalled Andhra Pradesh : The Upcoming “Solar Capital of the India” flying high with promising returns
- 5. 5Power Plus Counsultants Source: PPC financial model Average Capex for Open Access Project: INR 80-85 million 6.47% 8.84% 11.85% 15.76% 21.02% 27.98% 0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 30.00% 90 Mn 85 Mn 80 Mn 75 Mn 70 Mn 65 Mn EquityIRR CAPEX in Million INR NPV become > 0 at CAPEX 0f INR 79 Million for Rajasthan Rajasthan : The leading state for JNNSM – Investor Attractiveness slips to third position due to low industrial tariffs. 9.57% 12.53% 16.32% 21.22% 27.56% 35.50% 0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 30.00% 35.00% 40.00% 90 Mn 85 Mn 80 Mn 75 Mn 70 Mn 65 Mn EquityIRR CAPEX in Million INR NPV become > 0 at CAPEX 0f INR 85 Million for Maharashtra Maharashtra : Industrial capital comes in second: Though Open Access clearances still a bottleneck Source: PPC financial model Average Capex for Open Access Project: INR 80-85 million The above states have their own pros and cons and will require in detail analysis for their viability and priority for a particular project developers. For more information on the techno-commercial viability and future of Indian Solar market contact us at info@indianpowersector.com.
- 6. 6 Power Plus Counsultants Captive Model : A win – win situation for all the stake holders involved 14.80% 18.47% 22.77% 27.83% 33.81% 0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 30.00% 35.00% 90 Mn 85 Mn 80 Mn 75 Mn 70 Mn EquityIRR CAPEX in Million INR Source: PPC financial model Highly Recommended • Captive model • Third Party Open Access sale with highly bankable PPAs Viable Options • Projects under state policies through competitive bidding or through direct allocation Opportunistic Market • NSM through Viability Gap Funding • APPC + REC
- 7. A young and dynamic team of power managers providing high-quality financial and business research output. We have core expertise in Coal Policy, Coal demand and supply predictions, trend analysis, sector analysis and best research abilities Contact us for sponsorship opportunity in the Upcoming Reports We use a proprietary database including expert witness testimony, full-text transcripts, depositions, and more and pull together custom reports of the pertinent expert information you need. We provide ROD services for Indian POWER Sector