The document summarizes India's Jawaharlal Nehru National Solar Mission, which aims to promote solar power in India. The mission has set targets to install solar collectors, off-grid applications, and grid-connected solar power. It provides subsidies and sets feed-in tariffs to encourage solar development. However, there are still issues to address around financing, evacuation infrastructure, and risk mitigation for developers and utilities.

1. Jawaharlal Nehru National Solar Mission - 2010, INDIA Wockhen&Co.

2. India – has been undertaking a country wide solar programme for more than two decades: Remote village electrification – amongst the largest decentralised solar programmes globally Approximately 95% of all remote villages electrification using SPV Promotion of solar in Urban, Industrial & Commercial applications Cumulative Capacity Added till upto 31.12.2009 Grid Based Solar Power - 6 MW Decentralised Solar Power Projects & Street Lights – 2.39 MWp Solar Home Lighting Systems - 5,10,877 Solar Lanterns - 7,67,350 Solar PV Street Lighting Systems - 82,384 Solar PV Pumps - 7,247 Solar Water Heating - 3.25 Million square metres (Collector Area) Solar Cookers – 6,72,000 At 1900 kWh/sq M, India receives one of the highest levels of solar irradiance globally. Most parts receive i rradiance of 5-7 kWh per sq meter per day - average power generation potential of 20 MW per square kilometer Certain sites receive higher levels of insulation (Rajasthan, TN, AP, Ladakh, Gujarat) - average potential of 35 to 40MW/sq Km High Solar Incidence Zones Status of Solar Energy Development in India

3. Objective of the National Solar Mission To achieve volume production at a scale which leads to cost reduction and rapid diffusion and deployment of solar technologies across the country For this purpose set up enabling policy environment and regulatory framework. Road Map for the Solar Mission National Solar Mission’s Strategy for Phase 1 & 2 Supporting Utility scale power generation Expanding off-grid applications Developing rooftop installations Accelerating Research and Development Enhancing the Domestic manufacturing base Jawaharlal Nehru Solar Mission Roadmap S.no Application Segment Target for Phase 1 (2010-13) Target for Phase 2 (2013-17) Target for Phase 3 (2017-22) 1 Solar Collectors 7 Million Sq meters 8 Million Sq meters 5 Million Sq meters 2 Off Grid Solar applications 200 MW 800 MW 1000 MW 3 Utility grid power, including roof top 1000 MW 4000 MW 16000 MW The Jawaharlal Nehru National Solar Mission: Key Highlights

4. Off Grid Solar Applications JNNSM proposed to add 200 MW capacity in I st phase for off grid applications like solar lighting, rural power supply, telecom towers etc Soft loans up to 5% annual interest rate 30% subsidy for select applications 90% subsidy for niche applications in special category states and other remote areas. Demonstration Projects JNNSM to identify new technology configurations not covered under 1,100 MW capacity target Focus on large scale Solar Thermal projects and new solar thermal technologies PFC to prepare bidding documents for these projects - tariff based bidding - initiated in 2010 Rooftop Based Solar Generation JNNSM – targeting 100 MW of rooftop solar PV connected by 2022 to replace conventional power/ diesel-based generators. Operators eligible to receive the feed-in tariff fixed by the SERC. Generation Based Incentives payable to utility to cover difference between solar tariff less the base price of Rs. 5.50/kWh with 3% p.a. escalation. Tariff to be fixed by concerned SERC & utility to pay a minimum of Rs. 5.50/unit - increasing annually @3% Key Action Points under JNNSM – Off-Grid, Rooftop & Demonstration Projects under JNNSM

5. Under JNNSM, NVVN (NTPC Vidyut Vyapar Nigam) to be the nodal agency for the procurement and sale of solar power NVVN to source and sell 1,000 MW solar power in Phase 1 based on A Solar Tariff (to be paid to solar power project developers) fixed by Central Electricity Regulatory Commission (CERC) Solar tariff for FY 2010-11 tariff as per CERC - Solar PV Rs. 18.44 per unit; CSP Rs. 13.45 per unit NVVN to bundle an equal amount of conventional power with solar power Bundled solar and conventional solar power to be sold to states by NVVN @ Rs 5.5/ unit NVVN to sign a PPA (Power Purchase Agreement) with solar developers and NTPC as well as a PSA (Power Sale Agreement) with state utilities PPA to remain valid for 25 years (in line with CERC regulations) NVVN shall establish irrevocable revolving Letter of Credit (LCs) in favor of the Solar Power Developers Distribution Utilities shall open irrevocable revolving Letter of Credit to ensure Payment Security. CERC discussing SERCs to set committed RPO’s at state level for solar Solar RPO to start with 0.25% in the phase-I, and increase gradually to 3% by 2022. Key Action Points under JNNSM - Grid Connected Solar Power

6. New Projects - Requirements for Setting up of Solar Projects Confirmation that Capacity shall be commissioned on or before 31st March 2013. Net worth of the SPD for the past three years and turn-over of last three years Technical requirements New Projects – Conditions for signing of MOU Confirmation from STU regarding availability of evacuation infrastructure at >33 kV Statutory (allotment of land) and other clearances as applicable & Bank Guarantee Complete Detailed Project Report (DPR) & Letter of comfort from Promoter(s) /FI’s Time-Frame for major activities Necessary water linkages for solar thermal from the concerned State Authorities Proposed Time Lines & Requirements for New Projects

7. CERC Solar Tariff Duration of solar feed in tariff inadequate for developers to risk such high investment 1 year solar FIT – does not allow a developer enough time to develop projects Financial closure for solar projects – solar feed in tariff window not large enough to accommodate project gestation period – 12 months for SPV and 28 months for CSP Capital costs assumed for solar tariff design may not be appropriate Solar tariff based on capital cost prevailing in market today – however project gestation period may move the capital costs higher – risk especially as MNRE expects a development guarantee while awarding projects RoE for the first 10 years assumed at 17 % (provides an effective post tax return of 14.11 %) - on the lower side considering the risks associated with new technology No or limited information on CUF’s achievable by solar power projects CERC CUF (of 19% - SPV) might be difficult to achieve in most parts of India except Rajasthan & Gujarat – developers of the view that this should be in the range of 16‐19%. Same case with CSP Key Messages & Issues

8. JNNSM’s Goal Play to India’s strength – Shift focus to Solar (India has very high solar potential) Address energy security & high cost of solar power through rapid scale-up & technological innovation for driving down solar power costs towards grid parity. Mid-term appraisal (based on emerging cost & technology trends) to be undertaken to evaluate progress & review capacity and targets for subsequent phases protect Government from un-necessarily high subsidy exposure Shift in focus of Renewable Energy Development from State to Federal Level: JNNSM – Shifts focus in renewable energy development to the centre MNRE & NVVN emerge as main players in RE promotion from states like in wind etc Limited role of states – land, water allocation However limited or no clarity on Solar RPO’s and REC’s and how these will function A number of issues still to be addressed by JNNSM in conjunction with Central & State Governments, Regulators, Power utilities etc: Availability of year on year funding for the JNNSM (solar tariff – 25 years – from which budgetary head) Solar projects - connected at 33 kV & above grid substations & not discom substations - escalate project costs - longer evacuation networks Project financial closure within 3 months from date of signing of PPA – highly ambitious - considering the Indian banking systems unfamiliarity with solar Key Messages & Issues

9. Risk Mitigation for Key Stakeholders Risk mitigation for solar power developers & NVVN in case of default or non purchase of power by state utilities No clarity on ‘chain of events’ or liabilities in case a utility stops buying power from NVVN or is late in making payments to NVVN for the power – domino effect MNRE & Multi/ Bi lateral institutions (WB & ADB) for development of appropriate ‘Risk Funds’ for NVVN and solar developers No risk mitigation instruments for solar project developers Need for a technology guarantee from solar technology providers Development of Solar Parks MNRE very keen to develop solar parks in states like Rajasthan and Gujarat Gujarat already has a very ambitious solar policy in place and had already bid out projects with a cumulative capacity of 700 MW. Promotion of Solar Manufacturing An incentive package, similar to SIPS, to be considered for development of manufacturing for solar thermal systems and components. SME’s to be supported through soft loans for expansion of facilities and technology Technology transfer to be built into procurement from foreign sources no clarity on this clause and whether projects under JNNSM would need to source all or part of their equipment from Indian suppliers Key Messages & Issues