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©2016 Mercom Capital Group, llc. ALL RIGHTS RESERVED. I www.mercomcapital.com I solar@mercomcapital.com I Page 1
Mercom Capital Group
India Solar Market Update
India Solar Quarterly Market Update
Too Much Too Fast? Falling Tariffs Causing Concern in The Indian Solar Market
May 2016
KEY FINDINGS
� Mercom forecasts approximately 5 GW of solar installations in India for CY 2016
� With 2.2 GW installed to date; cumulative installations have surged to 7.5 GW as of May 2016
� Solar energy now represents 2.5% of total installed power capacity in India, up from 1.4% a year ago - and
was the fastest growing new renewable energy source
� The solar development pipeline now stands at 22 GW with over 13 GW under construction
� Module prices have declined slightly over the last three months
� Currently, 19 developers have bid below ₹5 (~$0.0735) for 2.9 GW worth of solar capacity across 46
projects. About 1.2 GW of these projects have signed PPAs
� Low bids through reverse auctions continue to be a major issue
List of Charts/Tables
India Solar Installations (MW)……………………………………………………………..……………….. 2
Utility-Scale Solar Projects in India…………………………………………………………….................. 3
India Solar Policy Map………..…….………………….…….…………………………………….……….. 4
Domestic Interest Rates for Solar Project Financing (%)………..…….….….…….………….……….. 5
All India Cumulative Solar Installations By Policy Type (MW)……………………..…………………… 6
India Solar Project Pipeline (MW)…………………………….……………………………………….…… 6
JNNSM Phase II, Batch 2 Tenders/Auction Results ………………….................................................. 8
JNNSM Phase II, Batch 3 Tenders/Auction Results …………………................................................. 9
JNNSM Phase II, Batch 4 Tenders/Auction Results …………………................................................. 10
Details of Funds Sanctioned Under Solar Park Program ………………….......................................... 12
Indian Module ASP……………………………………………………………………………...................... 13
Developers Bidding for Solar Projects Below ₹5……………………………….……..……..................... 14
Solar Bids in Reverse Auctions in India (₹/kWh)……………………………..……...……...................... 14
Clean Energy Cess Fund Status……………………………………………............................................ 15
Ministry-wise NCEF Fund Allocation by Year………………….………………………………................ 15
Developers Over 1% Market Share of Operating Projects in India…………………….….....…….….. 16
20 Developers Account for ~71% of the Project Pipeline in India………………………….....…….….. 16
India – Installed Power Capacity Mix (%)……………………………………………………....…..….….. 17
Karnataka – List of LoAs Issued……………………………………………..………………….…….….…. 23
Jharkhand – List of LoAs Issued……………………………………………..……………….....……….…. 24
India Solar Installations (MW) By Location (May 2016) ……………………………………………….….. 25
©2016 Mercom Capital Group, llc. ALL RIGHTS RESERVED. I www.mercomcapital.com I solar@mercomcapital.com I Page 2
Mercom Capital Group
India Solar Market Update
Cumulative solar installations in India crossed 7.5 GW as of May 2016 with about 2.2 GW already installed so far this
year, more than all of the solar installations in 2015. India’s solar project pipeline has now surpassed 22 GW with ~13
GW under construction and ~9 GW in the Request for Proposal (RfP) process. We are projecting solar installations in
India to total approximately 5 GW for calendar year 2016.
6 12 172
986 1,004 883
2,133
5,068
9,015 9,040
9,50010,000
0
10,000
20,000
30,000
40,000
50,000
60,000
0
2,000
4,000
6,000
8,000
10,000
12,000
2009 2010 2011 2012 2013 2014 2015 2016F 2017F 2018F 2019F 2020F
Cu
mu
lati
ve I
nst
allati
on
s (M
W)
An
nu
al
Inst
allati
ons (
MW
)
Annual Solar Installations
Cumulative Solar Installations
May 2016
Data derived from MNRE, Mercom Project Tracker & Public Sources Source: Mercom Capital Group
India Solar Installations (MW)
The Indian solar market is growing in size but many challenges remain, and the industry is asking: is it too much too
fast? Focusing on the positives first, the solar market clearly is much larger than ever before with over 22 GW in
various stages of development. The NDA government has shown a strong commitment towards solar and is working
hard to achieve its goal of 100 GW by 2022 – it has to be commended for getting the market moving as witnessed
with the growing numbers of reverse auctions.
However, there are several challenges on the ground that need to be addressed for sector to move from 2 GW a year
to a 10 GW a year market.
Low bidding levels through reverse auctions have been a major issue. We reported in our previous update that most
banks are unwilling to lend to projects below a ₹5 (~$0.0735)/kWh tariff. Since then, this subject has been discussed
widely, but the fact still remains that reverse auctions are driving bids to unsustainably low levels and lenders are
shying away from these risky projects. Developers are relying on optimistic assumptions to justify low bids but, unless
banks can be convinced that these assumptions are realistic, financing will continue to be an issue.
Government agencies are trying to meet installation goals as mandated, but it does not look like they have the
processes and infrastructure in place yet to do so. The auction process is constantly delayed, causing developers
grief; evacuation delays are costing developers; land acquisitions have long been an issue and may get worse; there
is a lot of hype around solar parks, but most are not completely developed; DISCOM finances are still a mess; banks
©2016 Mercom Capital Group, llc. ALL RIGHTS RESERVED. I www.mercomcapital.com I solar@mercomcapital.com I Page 3
Mercom Capital Group
India Solar Market Update
saddled with non-performing assets (bad loans) are risk averse; and, several large developers are currently in the
market looking for buyers for their project pipelines due to these tough conditions.
Capacity (MW)
In-Operation
Solar PV 7,324.5
Solar Thermal 208.5
Total 7,533
Under Development
Solar PV 13,512
Solar Thermal 280
Total 13,792
Utility-Scale Solar Projects in India
Operational and Under Development
May 2016
Source: Mercom Capital Group
Another issue, which has been there since the beginning of India’s solar policy history, is the lack of technical
qualification requirements. The bar is very low when it comes to required competency and experience building solar
projects as long as you show the required finances and make the necessary deposits. There is a lack of incentives for
top performers and disincentives for companies that don’t execute. It is difficult to imagine inexperienced developers,
having the technical knowledge to factor in all the variables necessary to bid in a rational manner (though this can
also apply to pure-play developers).
Currently, there is a perception in the market that all of the risks have been dumped on the developers. While
developers go through a cumbersome regulatory regime to build a project, they don’t feel that the government has
done its part to make things efficient. A common theme is the hefty fines developers have to pay if they are delayed
on any of the multitude of steps in the project development process, but if the delays occur on the government side
the risk still falls on the developer. There is a urgent need for Government agencies to be held accountable for timely
execution. To address these issues MNRE recently invited comments by stakeholders on "Draft Guidelines for Tariff
Based Competitive Bidding Process for Grid Connected Solar PV Power Projects". Some of the issues that need to
be addressed are:
Delays – Some government agencies are overwhelmed and frequent delays are common which puts unnecessary
pressure on developers. On Time Payments – There is no mechanism to ensure timely payments which would bring
down borrowing costs and reduce risks. A billion dollar fund out of coal cess collections could act as a reserve
backstop against non-payments. Evacuation Delays should not become a risk to the developer and should be
compensated. Payment for grid unavailability should be compensated for instead of deferring it. Less hype, more
execution – many solar parks are not complete; parks need to be 100 percent complete before the projects are
auctioned and costs to develop in these parks must be priced competitively; the initial goal of governments for solar
parks was to simplify project development, not make a profit. Many developers feel that solar parks are actually
increasing the cost of projects as park fees are quite high compared to what the developers get in return.
©2016 Mercom Capital Group, llc. ALL RIGHTS RESERVED. I www.mercomcapital.com I solar@mercomcapital.com I Page 4
Mercom Capital Group
India Solar Market Update
Source: Mercom Capital Group (May 2016)
India Solar Policy Map
Batch 1
700 MW
(20 MW pending)
100 MW UP Solar Projects (UP) -
Auctioned
420 MW Bhadla PII Solar Park
(Rajasthan) - Auctioned
500 MW Gani Sakunala Solar
Park (AP) - Auctioned
500 MW Ghani Solar Park (AP) -
Auctioned
Batch 2 - Tranche I
3,000 MW
(Tender/Auction)
230 MW Rajasthan Solar Projects
(Rajasthan) - Tendered (100 MW
DCR - Auctioned)
Phase II
600 MW Pavagada Solar Park
(Karnataka) - Tendered
(500 MW Open - Auctioned)
400 MW Telangana Solar
Projects (Telangana) - Auctioned
250 MW Kadapa Solar Park (AP) -
Tendered
500 MW Ananthapuram Solar
Park TIV (AP) - Tendered
(400 MW Open - Auctioned)
440 MW UP Solar Park TIII (UP) -
125 MW Auctioned
315 MW Retendered
250 MW Gujarat Solar Park TII
(Gujarat) -
Shifted to Batch 4
500 MW Maharashtra Solar
Projects TI - Auctioned
Batch 3 - 2,000 MW
(Tender/Auction)
2,785 MW
1,000 MW Karnataka Solar
Projects TV (Karnataka) -
Tendered
250 MW Gujarat Solar Park TI
(Gujarat)) - Tendered
Batch 4 - 5,000 MW
(Tender/Auction)
1,900 MW
Approved 17 CPSUs under seven
different Ministries
Batch 5 - 1,000 MW
(CPSU)
2 MW West Godavari Solar
Projects (AP) - Tendered
Batch 6 - 50 MW
(High Visibility Areas)
Batch 1
620 MW
(270 MW CSP pending)
Batch 2
350 MW
(In Operation)
Phase I
Defence Establishments
300 MW
Canal Solar Projects
100 MW
Others
Solar Parks - 20 GWSECI - EPC Solar Projects
2,000 MW
MNRE Approved 33 Solar
Parks in 21 States with
19.9 GW
NTPC Self Owned
Projects - 10 GW
750 MW Ananthapuram
PII Solar Projects (AP) -
Tendered
250 MW Madhya Pradesh
Solar Projects (MP) -
Auctioned
260 MW Rajasthan Solar
Projects - Rajasthan
(Auctioned)
250 MW Ananthapuram PI
Solar Projects (AP) - 50
MW Under Construction
1,000 MW Pavagada Solar
Park (Karnataka)
Tendered
100 MW Chhattisgarh Solar
Projects TVI (Chhattisgarh) -
Tendered
160 MW Uttar Pradesh (Non-
Solar Park) (UP) - Tendered
50 MW Himachal Pradesh (Non-
Solar Park) (HP) - Tendered
35 MW Puducherry (Non-Solar
Park) (Puducherry) - Tendered
500 MW Odisha Solar Projects
(Odisha) - Tendered
500 MW Maharashtra Solar
Projects (Maharashtra) - Yet to
Announce
650 MW Andhra Pradesh Solar
Park (AP) - Yet to Announce
©2016 Mercom Capital Group, llc. ALL RIGHTS RESERVED. I www.mercomcapital.com I solar@mercomcapital.com I Page 5
Mercom Capital Group
India Solar Market Update
A Challenging Banking Environment
The Indian banking sector is going through some challenging times, which could make borrowing much more difficult
in the short-term. According to Reserve Bank of India (RBI) data, bank loans worth ₹7 lakh crore (~$103 billion) were
under stress as of the end of 2015. Bank lending, on the other hand, grew to its lowest level in five months with only
9.2% year-over-year growth. In this tough atmosphere, banks are very hesitant to take on any debt that is considered
risky, especially with the low bids we are seeing in solar. There is no set rule which suggests tariffs below ₹5
(~$0.0735) cannot be financed, some banks are seriously looking at projects in the ₹4.5-5 (~$0.0662-0.0735) tariff
range, but it depends on the developer's ability to service debt, sound project economics, borrower credibility and
having a corporate parent with a strong balance sheet is always a big plus.
10.00
10.50
11.00
11.50
12.00
12.50
13.00
13.50
Q2'15 Q3'15 Q4'15 Q1'16 Q2'16
Highest
Average
Lowest
Domestic Interest Rates for Solar Project Financing (%)
Source: Mercom Capital Group
Policy Updates
JNNSM - Phase II Batch 1 (SECI)
Seven-hundred MW of solar projects were scheduled to be completed by May 2015 under this batch. We have
confirmation that, so far, 680 MW have been commissioned.
©2016 Mercom Capital Group, llc. ALL RIGHTS RESERVED. I www.mercomcapital.com I solar@mercomcapital.com I Page 6
Mercom Capital Group
India Solar Market Update
1
,05
6
1,0
34
83
5
68
0
54
5
49
8
41
8
33
0
31
0
30
5
27
3
22
0
20
0
16
2
14
0
10
6
94
90
69
48
32
30
21
8 5 5 4 3 3 3 3 3 2
0
100
200
300
400
500
600
700
800
900
1,000
1,100
All India Cumulative Solar Installations By Policy Type (MW)
Cumulative Solar Installations
7,533 MW
Source: Mercom Capital Group (May 2016)
0
500
1,000
1,500
2,000
2,500
3,000
India Solar Project Pipeline (MW)
Projects To Be Auctioned (~9 GW)
Projects Under Development (~13 GW)Total Pipeline ~22 GW
Source: Mercom Capital Group (May 2016)
©2016 Mercom Capital Group, llc. ALL RIGHTS RESERVED. I www.mercomcapital.com I solar@mercomcapital.com I Page 7
Mercom Capital Group
India Solar Market Update
JNNSM - Phase II Batch 2 State Specific Bundling Scheme (NTPC)
The MNRE has called for tenders under Batch 2 for all 3,000 MW of PV projects targeted under this scheme,
implemented by the National Thermal Power Corporation (NTPC) through open competitive bidding. The Ministry has
been spreading these projects among various states including Andhra Pradesh, Karnataka, Rajasthan, Telangana
and Uttar Pradesh.
The auction results for 2,520 MW (1,000 MW in Andhra Pradesh, 520 MW in Rajasthan, 500 MW in Karnataka, 400
MW in Telangana and 100 MW in Uttar Pradesh) have been announced. Of the 2,520 MW, only 300 MW are under
the Domestic Content Requirement (DCR) category. We have confirmation that PPAs have been signed for 1,330
MW to date and these projects are expected to be commissioned in early 2017.
©2016 Mercom Capital Group, llc. ALL RIGHTS RESERVED. I www.mercomcapital.com I solar@mercomcapital.com I Page 8
Mercom Capital Group
India Solar Market Update
JNNSM Phase II, Batch 2 Tenders/Auction Results
Jan 2016
Jan 2016
JNNSM Phase-II, Batch-2, Tranche-I NTPC – 3,000 MW under State Specific Bundling Scheme
100 MW Uttar Pradesh (Non-Solar Park)
Uttar Pradesh
Open Category [10 MW x 10 Projects]
Adani (50 MW) @Rs.4.78/kWh
Azure (50 MW) @Rs.4.78/kWh
420 MW Bhadla Phase II Solar Park
Jodhpur, Rajasthan
Open Category [70 MW x 6 Projects]
Fortum (70 MW) @Rs.4.34/kWh
Rising Sun (140 MW) @Rs.4.35/kWh
Solairedirect (140 MW) @Rs.4.35/kWh
RattanIndia (70 MW) @Rs.4.36/kWh
230 MW Rajasthan (Non-Solar Park) Rajasthan
Open Category [10 MW x 13 Projects]
Results Pending
DCR Category [10 MW x 10 Projects]
Janardan Wind (20 MW) @Rs.5.06/kWh
Suzlon (60 MW) @Rs.5.07/kWh
Maharashtra Seamless (20 MW) @Rs.5.07/kWh
600 MW Pavagada Solar Park
Tumkur, Karnataka
Open Category [50 MW x 10 Projects]
RattanIndia (50 MW) @Rs.4.78/kWh
Adani (100 MW) @Rs.4.79/kWh
Fortum (100 MW) @Rs.4.79/kWh
ACME (100 MW) @Rs.4.79/kWh
Tata Power (100 MW) @Rs.4.79/kWh
ReNew Power (50 MW) @Rs.4.80/kWh
DCR Category [50 MW x 2 Projects]
Results Pending
400 MW Telangana (Non-Solar Park)
Telangana
Open Category [10 MW x 35 Projects]
ReNew Power (100 MW) @Rs.4.66/kWh
Karvy (50 MW) @Rs.4.67/kWh
Azure (100 MW) @Rs.4.67/kWh
Adani (50 MW) @Rs.4.67/kWh
ACME (50 MW) @Rs.4.67/kWh
DCR Category [10 MW x 5 Projects]
Adani (50 MW) @Rs.5.19/kWh
500 MW Ghani -Sakunala Phase II Solar Park
Kurnool, Andhra Pradesh
Open Category [350 MW x 1 Project]
SBG Cleantech (350 MW) @Rs.4.63/kWh
DCR Category [50 MW x 3 Projects]
Azure (100 MW) @Rs.5.12/kWh
Adani (50 MW) @Rs.5.13/kWh
Nov 2015
500 MW Ghani Solar Park
Kurnool, Andhra Pradesh
Open Category [50 MW x 10 Projects]
SunEdison (500 MW) @Rs.4.63/kWh
Dec 2015
Source: Mercom Capital Group (May 2016)
Mar 2016
Apr 2016
May 2016
250 MW Kadapa Ultra Mega Solar Park
Kadapa, Andhra Pradesh
Open Category
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Mercom Capital Group
India Solar Market Update
JNNSM - Phase II Batch 3 (SECI)
The Solar Energy Corporation of India (SECI) has called for tenders amounting to 2,785 MW under JNNSM Phase II
Batch 3, “State Specific VGF Scheme”. Auction results for 1,025 MW of projects to be developed in Andhra Pradesh,
Maharashtra and Uttar Pradesh have been announced.
JNNSM Phase II, Batch 3 Tenders/Auction Results
JNNSM Phase-II, Batch-3 SECI - 2,000 MW under VGF Scheme
250 MW Gujarat Solar Park Projects, Tranche-II
Charanka, Gujarat
Shifted to Batch 4
1,000 MW Karnataka Solar Projects, Tranche-V
Karnataka
Open Category [10 MW x 95 Projects]
DCR Category [10 MW x 5 Projects]
500 MW Ananthapuram Solar Park, Tranche-IV
Andhra Pradesh
Open Category [50 MW x 8 Projects]
FRV Solar (100 MW) Rs.44.5 Lakh/MW/@Rs.4.43
ACME (150 MW) Rs.55 Lakh/MW/@Rs.4.43
Tata Power (100 MW) Rs.73.9 Lakh/MW/@Rs.4.43
Azure (50 MW) Rs.74.49 Lakh/MW/@Rs.4.43
DCR Category [50 MW x 2 Projects]
440 MW UP Solar Park, Tranche-III
Uttar Pradesh
Open Category – Bid Results for 125 MW
Solairedirect (75 MW) Rs.74.35 Lakh/MW/@Rs.4.43
RattanIndia (50 MW) Rs.74.99 Lakh/MW/@Rs.4.43
315 MW Retendered
Open Category [265 MW]
DCR Category [50 MW]
500 MW Maharashtra Solar Projects, Tranche-I
Maharashtra
Open Category [10 MW x 45 Projects]
Bhageria Industries (30 MW) (VGF-0) @Rs.4.41
Talettutayi Solar (50 MW) Rs.46 Lakh/MW/@Rs.4.43
Orange Renewable (100 MW) Rs.47.7 Lakh/MW/@Rs.4.43
Sepset Constructions (40 MW) Rs.48.9 Lakh/MW/@Rs.4.43
Krishna Windfarm Developers (10 MW) Rs.53.5 Lakh/MW/@Rs.4.43
AMPL Cleantech (50 MW) Rs.53.7 Lakh/MW/@Rs.4.43
Welspun Renewables (100 MW) Rs.53.7 Lakh/MW/@Rs.4.43
Suzlon (70 MW) Rs.54 Lakh/MW/@Rs.4.43
DCR Category [10 MW x 5 Projects]
Tata Power (30 MW) Rs.65 Lakh/MW/@Rs.4.43
Adani (20 MW) Rs.1 Crore/MW/@Rs.4.43
Source: Mercom Capital Group (May 2016)
Jan 2016
Mar 2016
Apr 2016
May 2016
100 MW Chhattisgarh Solar Projects, Tranche-VI
Chhattisgarh
Open Category [10 MW x 10 Projects]
160 MW Uttar Pradesh (Non-Solar Park), Tranche-VII
Uttar Pradesh
Open Category [10 MW x 16 Projects]
50 MW Himachal Pradesh (Non-Solar Park),
Tranche-VIII, Himachal Pradesh
Open Category [10 MW x 5 Projects]
35 MW Puducherry (Non-Solar Park), Tranche-IX,
Puducherry
Open Category [5 MW x 7 Projects]
©2016 Mercom Capital Group, llc. ALL RIGHTS RESERVED. I www.mercomcapital.com I solar@mercomcapital.com I Page 10
Mercom Capital Group
India Solar Market Update
JNNSM - Phase II Batch 4 (SECI)
Under this program, 5,000 MW of grid-connected solar PV projects with Viability Gap Funding (VGF) benefits will be
developed on a build-own-operate basis. The final guidelines for this batch were announced by MNRE in March. A
tender for 250 MW of projects to be developed in Gujarat under this scheme were announced. A new tender for 500
MW of projects in Odisha were announced recently. Tenders for another 1,150 MW are expected to be issued soon.
JNNSM Phase-II, Batch 4 Tenders/Auction Results
SECI - 5,000 MW under VGF Scheme
Solar Park/Projects Location/State Total MW MW Category Capacity Breakdown
225 Open40 MW x 5 Projects
25 MW x 1 Project
25 DCR 25 MW x 1 Project
450 Open 10 MW x 45 Projects
50 DCR 10 MW x 5 Projects
Maharashtra Solar Projects Maharashtra 500 to be tendered shortly
Andhra Pradesh Solar Park Andhra Pradesh 650 to be tendered shortly
Source: Mercom Capital Group
Charanka,
Gujarat250
Odisha Solar Projects, Tranche-II Odisha 500
Gujarat Solar Park Projects, Tranche-I
(Shifted from Batch 3)
JNNSM - Phase II Batch 5 - (SECI – CPSU)
Under Batch 5, there is a target to set up 1,000 MW of grid-connected solar PV power projects by the Central Public
Sector Undertakings (CPSUs) and Government of India organizations’ self-use or third-party sale or merchant sale,
with VGF over a span of three years from FY2014-15 to 2016-17, DCR will be mandatory.
MNRE has sanctioned the entire 1,000 MW of projects to be developed by 17 CPSUs under 7 different ministries. Of
the total 1,000 MW, a 200 MW project developed by NTPC is commissioned and another 50 MW worth is expected to
be commissioned by October 2016.
The remaining projects to be developed by other PSUs including Coal India, BHEL, GAIL and SECI are all expected
to be commissioned in 2017.
In the next phase, there is a proposed target to set up 5,000 MW of grid-connected solar PV power projects by the
CPSUs. This proposal is awaiting cabinet approval and is expected to be announced in a month or two.
©2016 Mercom Capital Group, llc. ALL RIGHTS RESERVED. I www.mercomcapital.com I solar@mercomcapital.com I Page 11
Mercom Capital Group
India Solar Market Update
Other Announced Solar Programs
Solar Projects by Defense Sector
Under this plan, grid-connected and off-grid solar PV power projects were proposed to be set up by Defense
Establishments under the Ministry of Defense with VGF over a span of five years, from 2014-2019. DCR will be
mandatory.
According to our sources, 340 MW have been approved by MNRE. The Ordnance Factory Board is developing 100
MW, Bharat Electronics Ltd. (BEL) – 50 MW, Bharat Dynamics Ltd. (BDL) – 25 MW, Hindustan Aeronautics Ltd.
(HAL) – 15 MW and the Department of Defense is developing 150 MW, 10 MW of which is being developed by the
Border Security Force (BSF).
Auction results for 7 MW to be developed by the Ordnance Factory Board in the state of Maharashtra were
announced in March 2016.
Grid-Connected Solar PV Power Projects on Canal Banks and Canal Tops
The MNRE launched a program for the development of 100 MW of grid-connected solar PV power projects on canal
banks and canal tops. Projects under this scheme are under development in eight different states (50 MW – Canal
Banks, and 50 MW – Canal Tops).
According to sources, 49 MW of these projects are expected to be commissioned this year (10 MW in West Bengal,
25 MW in Gujarat, 6 MW in Andhra Pradesh, 3 MW in Kerala, and 5 MW in Punjab). Another 26 MW are expected to
be commissioned in 2017.
©2016 Mercom Capital Group, llc. ALL RIGHTS RESERVED. I www.mercomcapital.com I solar@mercomcapital.com I Page 12
Mercom Capital Group
India Solar Market Update
Ultra Mega Projects in Solar Parks
MNRE has approved 33 solar parks with a total capacity of 20,000 MW to be set up in 21 states; approximately
₹539.80 crore (~$79.4 million) has been approved for this purpose including SECI's fund handling charges of ₹4.60
crore (~$0.7 million).
(₹ in Million) (~$M)
1 Andhra Pradesh Ananthapuramu Solar Park 1500 AP Solar Power Corporation Pvt. Ltd. 1352.5 19.89
2 Andhra Pradesh Kurnool Solar Park 1000 AP Solar Power Corporation Pvt. Ltd. 902.5 13.27
3 Arunachal Pradesh Solar Park in Tezu, Lohit District 100Arunachal Pradesh Energy Development
Agency 2.5 0.04
4 ChhattisgarhSolar Park in Rajnandgaon, Janjgir Champa
districts500
Chhattisgarh Renewable Energy Development
Agency2.5 0.04
5 Gujarat Radhnesada Solar Park 700 Gujarat Power Corporation Limited 331.14 4.87
6 HaryanaSolar Park in Hisar, Bhiwani and
Mahindergarh districts500 Saur Urja Nigam Haryana Ltd (Sun Haryana) 2.5 0.04
7 Himachal PradeshSolar Park in Spiti Valley of Lahaul & Spiti
District1000 HP State Electricity Board Limited 2.5 0.04
8 Karnataka Pavagada Solar Park 2000Karnataka Solar Power Development
Corporation1002.5 14.74
9 Kerala Kasargode Solar park 200Renewable Power Corporation of Kerala
Limited22.5 0.33
10 Madhya Pradesh Rewa Ultra Mega Solar park 750 Rewa Ultra Mega Solar Limited 377.5 5.55
11 Madhya Pradesh Neemuch-Agar-Mandsaur Solar Park 1000 Rewa Ultra Mega Solar Limited 15 0.22
12 MaharashtraSolar Park in Sakri, Dhule district of
Maharashtra500 M/s Pragat Akshay Urja Ltd. 2.5 0.04
13 MaharashtraSolar Park in Dondaicha, district Dhule,
Maharashtra500 M/s K. P. Power Pvt. Ltd 2.5 0.04
14 MaharashtraSolar Park in Taluka Patoda, district Beed,
Maharashtra500
Maharashtra State Electricity Generating
Company Ltd.2.5 0.04
15 MeghalayaSolar park in West Jaintia Hills & East
Jaintia Hills districts20 Meghalaya Power Generation Corporation Ltd 2.5 0.04
16 NagalandSolar park in Dimapur, Kohima and New
Peren districts60
Directorate of New & Renewable Energy,
Nagaland2.5 0.04
17 Rajasthan Bhadla Phase-II Solar Park 680Rajasthan Solar Park Development Company
Ltd614.5 9.04
18 Rajasthan Bhadla Phase-III Solar Park 1000 Surya Urja Company of Rajasthan Ltd 461.5 6.79
19 Rajasthan Bhadla Phase-IV Solar Park 500M/s Adani Renewable Energy Park Rajasthan
Limited2.5 0.04
20 Rajasthan Fatehgarh Phase-1B Solar Park 421M/s Adani Renewable Energy Park Rajasthan
Limited2.5 0.04
21 Rajasthan Phalodi-Pokaran Solar Park 750M/s Essel Saurya Urja Company of Rajasthan
Limited2.5 0.04
22 Telangana Gattu Solar Park 500Telangana New & Renewable Energy
Development Corporation Ltd.27.5 0.40
23 Uttar PradeshSolar park in Jalaun, Allahabad, Mirzapur
and Kanpur Dehat districts600
Lucknow Solar Power Development
Corporation Limited209.76 3.08
24 UttarakhandSolar park in Sitarganj and kashipur
Industrial Area50
State Industrial Development Corporation
Uttarakhand Limited2.5 0.04
25 West BengalSolar park in East Mednipur, West
Mednipur, Bankura500
West Bengal State Electricity Distribution
Company Limited2.5 0.04
26 46.03 0.68
5397.93 79.38
Fund Handling charges to SECI
Total
Source: MNRE Mercom Capital Group
Details of Funds Sanctioned Under Solar Park Program
Sl.
No.State Name of the Solar Park
Capacity
(MW) Name of the Implementing Agency
Grand Total
©2016 Mercom Capital Group, llc. ALL RIGHTS RESERVED. I www.mercomcapital.com I solar@mercomcapital.com I Page 13
Mercom Capital Group
India Solar Market Update
Other Updates
Solar Bids – Time to Move Past ₹5 (~$0.0735)
Aggressive bidding in reverse auctions is a challenge, especially at a time when banks are dealing with non-
performing assets (NPA) and are very risk averse. Banks are open to considering projects with a tariff of ₹5
(~$0.0735) and below, if they are convinced that the numbers work and the developer has the experience, skills and
resources to execute them (see investor section). Developers are split as to whether a project can be built at a tariff
below ₹5 (~$0.0735). Some developers are assuming project costs of ₹5 crores (~$0.7 million) or below in some
cases, while banks are not convinced that is possible. The feeling among lenders is that at these low tariff levels, the
margin for error is razor thin in a market where unpredictability is common and there is a fear of ending up with non-
performing assets. We are finding that there is a disconnect between the project cost assumptions of developers
(optimistic) and the conservative estimates of financial institutions. Banks need to get deeper in the trenches and
improve due diligence in order to narrow the ‘assumption’ gap. On the other hand, developers will need to sell their
optimistic assumptions to the banks in a way that is transparent in order to make lenders comfortable.
Module prices have declined slightly over the last three months. With the module costs accounting for about 60% of
project costs, the market is very sensitive to price movements. There are indications that Chinese module prices may
decline further in the 2nd
half of 2016 due to softening demand in China. Manufacturers complain that tier 2 and tier 3
Chinese panels are being dumped on the market to meet these low cost requirements. Interest rates have remained
about the same over the last three months but solar companies that have larger corporate parents with good balance
sheets definitely have the advantage of lower borrowing costs which can be about 2% or more cheaper.
0.45
0.47
0.49
0.51
0.53
0.55
0.57
0.59
May 2015 Aug 2015 Nov 2015 Feb 2016 May 2016
Indian Module ASP ($/W)
Indian Module ASPs have dropped by ~13% over the last 12 months
Source: Mercom Capital Group
Currently, 19 developers have bid for 2.9 GW of solar projects below ₹5 (~$0.0735). About 1.2 GW of these projects
have signed PPAs. After the ₹4.34 (~$0.0638)/kWh bid by Fortum, subsequent bids have been higher which is a
relief to many.
©2016 Mercom Capital Group, llc. ALL RIGHTS RESERVED. I www.mercomcapital.com I solar@mercomcapital.com I Page 14
Mercom Capital Group
India Solar Market Update
0
50
100
150
200
250
300
350
400
450
500
4.00
4.10
4.20
4.30
4.40
4.50
4.60
4.70
4.80
4.90
5.00
Total Bid Capacity (MW) High Bid/Range (₹/kWh) Low Bid (₹/kWh)
Developers Bidding for Solar Projects Below ₹5To date 19 developers have bid for 2.9 GW of solar projects below ₹5
Source: Mercom Capital Group (May 2016)
₹/kWh MW
5.99
8.73
7.74
6.90
7.99
9.33
7.12
5.64
7.72
7.16
7.56
6.045.89
8.60
5.98 5.99
4.36
4.80 4.67
5.59 5.50
5.25
7.87
6.666.45
6.85
8.94
6.71
5.05
7.29
6.68 6.68
5.495.17
7.02
5.09
5.57
4.63 4.634.34
4.785.00
4.78 4.66
5.08
4.69
3.5
4.0
4.5
5.0
5.5
6.0
6.5
7.0
7.5
8.0
8.5
9.0
9.5
10.0
AP
PII
Bih
ar
Ka
rna
taka
PII
I
Te
lan
ga
na
PI
Utt
ark
ha
nd
UP
B2
Ka
rna
taka
PIV
-No
v 1
4
MP
PII
I-Ju
l 1
5
Pu
nja
b P
II (
C1
)-F
eb
15
Pu
nja
b P
II (
C2
)-F
eb
15
Pu
nja
b P
II (
C3
)-F
eb
15
Te
lan
ga
na
PII
G1
-Au
g 1
5
Te
lan
ga
na
PII
G2
-Au
g 1
5
UP
B3
-Se
p 1
5
Pu
nja
b P
III-
Se
p 1
5
Utt
ark
ha
nd
(T
ype
-I)-
No
v 1
5
NS
M P
II B
2 (
AP
)-N
ov
15
NS
M P
II B
2 (
AP
)-D
ec
15
NS
M P
II B
2 (
Raj
)-Ja
n 1
6
NS
M P
II B
2 (
UP
)-Ja
n 1
6
Ha
rya
na
-Ja
n 1
6
NS
M P
II B
2 (
Ka
r)-A
pr
16
NS
M P
II B
2 (
Te
lan
ga
na
)-M
ay
16
Jha
rkh
and
-Ma
y 1
6
Ka
rna
taka
PV
(G
en
)-M
ay 1
6
2014-15 2015-16 2016-17
Ta
riff
(₹
/kW
h)
High Tariff (₹/kWh) Low Ta ri ff (₹/kWh)
Source: Mercom Capital Group (May 2016)
Note: AP Phase II - The range of first-year tariff offered by the successful bidders was Rs.5.25-5.99/kWh with a 3% per annum escalation for the first 10 years, then flat thereafter.
Solar Bids in Reverse Auctions in India (₹/kWh)
©2016 Mercom Capital Group, llc. ALL RIGHTS RESERVED. I www.mercomcapital.com I solar@mercomcapital.com I Page 15
Mercom Capital Group
India Solar Market Update
NCEF
The National Clean Energy Fund (NCEF) was created in 2010 to fund the cost of research and innovative projects
using clean energy technologies by public and private sector entities. The fund has evolved under the NDA
administration and is now rebranded as Clean Environment Cess from the earlier Clean Energy Cess to include river
cleaning and other projects. The Cess, which was ₹50 (~$0.74) per ton when it was introduced in 2010, was raised to
₹100 (~$1.5) per ton in 2014 and to ₹200 (~$3) per ton in the 2015-16 budget. It was again doubled from ₹200
(~$3)/ton to ₹400 (~$6)/ton in the 2016-17 budget. Of the estimated $8 billion (~₹54,400 crore) collected under the
Clean Environment Cess, only about $3 billion (~₹20,400 crore) of it is expected to have been transferred to NCEF.
MNRE will only be allocated 23 percent of the total amount collected so far under the Clean Environment Cess. With
late tariff payment problems, rooftop subsidy delays and overcharged solar parks, it is inexplicable that such a large
amount is sitting unused. As we have mentioned several times, creation of a ‘reserve backstop fund’ against non-
payments or delayed payments by DISCOMs using NCEF funds could have an immediate positive impact,
eliminating offtaker risk, reducing interest rates and increasing lending.
Year% of Cess
Collected
% Diff - Funds
Collected vs. Spent
₹ in Crore US$ in Million ₹ in Crore US$ in Million % ₹ in Crore US$ in Million %
2010-11 1,066.46 156.83 0.00 0.00 - 0.00 0.00 -
2011-12 2,579.55 379.35 1,066.46 156.83 41% 160.80 23.65 6%
2012-13 3,053.19 449.00 1,500.00 220.59 49% 125.78 18.50 4%
2013-14 3,471.98 510.59 1,650.00 242.65 48% 1,218.78 179.23 35%
2014-15 5,393.46 793.16 4,700.00 691.18 87% 1,977.35 290.79 37%
2015-16 (RE) 12,623.33 1,856.37 4,700.00 691.18 37% 4,000.00 588.24 32%
2016-17 (BE) 26,148.20 3,845.32 8,447.00 1,242.21 32% 4,947.00 727.50 19%
Total 54,336.17 7,990.61 22,063.46 3,244.63 41% 12,429.71 1827.90 23%
RE - Revised Estimates; BE - Budget Estimates Note: Dollar-Rupee conversions were calculated at $1 = ₹68
Source: PIB, MNRE, Ministry of Finance Mercom Capital Group
Clean Environment Cess Fund Status
Clean Energy Cess
[Clean Environment Cess]
Collected
Amount
Transferred to NCEF
NCEF Fund
Allocation to MNRE
Ministry/
Year
₹ in CroreUS$ in
Million₹ in Crore
US$ in
Million₹ in Crore
US$ in
Million₹ in Crore
US$ in
Million₹ in Crore
US$ in
Million
2010-11 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
2011-12 160.80 23.65 0.00 0.00 0.00 0.00 59.95 8.82 220.75 32.46
2012-13 125.78 18.50 0.00 0.00 110.65 16.27 10.00 1.47 246.43 36.24
2013-14 1,218.78 179.23 0.00 0.00 0.00 0.00 0.00 0.00 1,218.78 179.23
2014-15 1,977.35 290.79 0.00 0.00 110.64 16.27 0.00 0.00 2,087.99 307.06
2015-16 (RE) 4,000.00 588.24 1,000.00 147.06 0.00 0.00 247.09 36.34 5,247.09 771.63
2016-17 (BE) 4,947.00 727.50 2,500.00 367.65 0.00 0.00 1,000.00 147.06 8,447.00 1,242.21
Total 12,429.71 1,827.90 3,500.00 514.71 221.29 32.54 1,317.04 193.68 17,468.04 2,568.83
Source: PIB, MNRE, Ministry of Finance Mercom Capital Group
Note: Dollar-Rupee conversions were calculated at $1 = ₹68
Ministry-wise NCEF Fund Allocation by Year
MNRE
Ministry of Water
Resources, River
Development & Ganga
Rejuvenation
Ministry of Drinking
Water & Sanitation
Ministry of Environment
& ForestsTotal
©2016 Mercom Capital Group, llc. ALL RIGHTS RESERVED. I www.mercomcapital.com I solar@mercomcapital.com I Page 16
Mercom Capital Group
India Solar Market Update
Market Share
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
We
lsp
un
Su
nE
diso
n
AC
ME
Ad
ani
Az
ure
NT
PC
ReN
ew
Po
we
r
Hin
du
sta
n P
owe
r
Rel
ian
ce S
ola
r
Fir
st
Sol
ar
Torr
ent
Pow
er
Ma
hage
nco
Esse
l
Ma
lpa
ni
Gro
up
Shap
oorj
i Pa
llo
nji
Sola
ire
dir
ect
Uja
as
Ener
gy
Wa
aree
Lan
co
Developers With Over 1% Market Share of Operating Projects in India 19 developers account for approximately 55% of the projects in operation
Source: Mercom Capital Group (May 2016)
Large scale project development in India is highly fragmented. There are about 300 developers with at least 5 MW or
more in the project pipeline, including recent auction winners who are expected to sign PPAs shortly.
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
10%
Re
Ne
w P
ower
Su
nE
dis
on
Ad
ani
AC
ME
Azu
re
NT
PC
Su
zlo
n
My
trah
Sky
Pow
er
SB
G C
lea
nte
ch
We
lsp
un
Her
o Fu
ture
En
erg
ies
Tat
a P
ow
er
So
lair
ed
ire
ct
Ra
tta
nIn
dia
Hin
du
stan
Po
wer
OP
G P
ow
er
Fo
rtu
m
Pho
ton
Ch
ari
sma
En
erg
y
20 Developers Account for Approximately 72% of the Project Pipeline in India Some of these developers do not have any operating projects yet
Source: Mercom Capital Group (May 2016)
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Mercom Capital Group
India Solar Market Update
Installed Power Capacity Mix
The government’s push towards solar is beginning to show results. As of the end of FY2015-16 with over 7 GW of
solar energy installed to date, solar represented 2.5% of the net installed capacity in India - up from 1.4% a year ago -
and was the fastest growing new energy source. Solar accounted for 17.4% of all renewable energy generation in
FY2015-16 compared to 10.5% in FY2014-15. Renewable energy sources including small hydro grew from 13.1% in
FY2014-15 to 14.4% in FY2015-16.
Coal
61.3%
Hydro
14.1%Gas
8.1%
Nuclear
1.9%
Diesel
0.3%
Wind
8.8%
Solar
2.5%
Bio-Power
1.6%
Small Hydro
1.4%
Waste to Power
0.04%
Renewable Energy
14.4%
India - Installed Power Capacity Mix (%)Renewables comprise 14% of India's total installed capacity, with solar accounting for 2.5%. Among
renewables, solar accounts for almost 17% of the installed capacity.
Source: MNRE, CEA Mercom Capital Group (May 2016)
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Mercom Capital Group
India Solar Market Update
Industry Feedback
Below are the takeaways from our recent conversations with major developers, manufacturers and investors.
Developers
• Several developers are not bidding at the current low levels and are waiting for the market to stabilize.
• According to developers, many projects are coming up for sale; the auctions are extremely competitive and
winning bidders are finding it tough to get funding.
• Bid viability depends on location. According to a few developers, bids below ₹5 (~$0.0735) are currently
viable in Rajasthan, Gujarat, Madhya Pradesh and some southern states. In all other states, the economics
for bids below ₹5 (~$0.0735) are not feasible.
• Some developers are seeing bid prices stabilize.
• Most developers believe that SunEdison’s issues will not affect the larger solar market.
• There are a lot of delays in the auction process, starting from the initial announcement and continuing to
signing PPAs, making on-time execution a challenge.
• Solar parks are expensive at ₹35-40 lakhs/MW (~$51,471-58,824/MW) and are delayed in many cases. The
Uttar Pradesh solar park, for example, is not complete and has no roads. Developers question why auctions
are announced in solar parks that are not complete.
• Instead of solar parks, some developers would rather have the government provide land to the developers.
The high costs of expensive solar parks are making project economics tougher.
• Developers are critical of SECI’s handling of auctions.
• Bids in Jharkhand are a concern considering insolation levels, land issues, DISCOM ratings, and law and
order issues.
• Trackers are becoming common and improving project economics.
• Domestic interest rates were between 10.5-12%.
• Buyers’ credit and refinancing are helping bring borrowing costs down by 2-3%.
• Some developers believe the sector is headed towards consolidation as projects start coming up for sale.
• Rajasthan has had some grid failures resulting in 1-1.5% loss in generation for some projects. Generally,
grid availability has been over 95%.
• Payments are usually on time except in Tamil Nadu and a few instances in Rajasthan.
• Project costs vary between ₹5-6 crores/MW (~$735,294-882,353/MW) with another ₹50 lakhs
(~$73,529)/MW for trackers.
• Developers mentioned that there is a disconnect between banks when it comes to solar project costs, and
banks are out of touch when it comes to realities on the ground.
• There is some concern over VGF projects as they are taxable and open up their books to scrutiny. Also,
there is worry that if a new government takes office, that they may not honor the current payment structure.
• There is a consensus that CERC benchmarking is off and should be done by states (like the wind sector)
instead of one tariff for the whole country. This would give states better guidance.
• There is some fear about how NPAs will affect the solar sector.
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Mercom Capital Group
India Solar Market Update
• Land acquisition and payment security need to be addressed to attract foreign investors.
• With low bids and razor thin margins, it is imperative for the government to address payment security and
strict timelines. In addition, curtailment and evacuation issues need to be factored in the PPAs, without
which IRR calculations will be meaningless.
• Developers have to deal with too many government agencies (state nodal agencies, offtakers, implementing
agencies, etc.) which makes on-time execution challenging. Developers are of the opinion that the
government is quick to penalize but does not look at the big picture, that are creating delays and hurdles
with unnecessary bureaucracy.
• Some companies are bidding aggressively because they are trying to build their pipelines quickly to reach a
critical mass and look for an exit.
Rooftop Installers
• Most of the growth in rooftop space is in commercial and industrial segments. Industrial power tariffs, which
are 20-30% more expensive, make solar attractive for this segment.
• Many rooftop customers feel that 25-year PPAs are too long; some want PPAs as short as five years.
• Commercial and industrial rooftop customers are more knowledgeable than residential customers about
solar and its benefits.
• Interest rates vary from 9.9-12%.
• Net metering implementation is haphazard. It takes six to eight months in some states just to process
paperwork. Some states have unsustainably high net metering rates, which may lead to rate cuts in the near
future.
• There is a large demand for accelerated depreciation (AD) among commercial and industrial customers,
which will not be available beginning next year.
• Timely disbursement of subsidies is a problem; in some instances, they are delayed two to four years.
• The rooftop solar sector creates a lot of jobs. Installers see a need for government support through
subsidies and AD for two to three years, after which they are confident that the market will take off without
incentives. Without subsidies or AD it will be a difficult road ahead.
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Mercom Capital Group
India Solar Market Update
Manufacturers
• The market for domestic manufacturing has picked up.
• There is a long time cycle (~18 months) between tenders and panel delivery, with a lot of delays in between.
• DCR cell functional manufacturing capacity is very small at 500 MW against 1.2 GW on paper. Most of the
production lines are old and need to be upgraded. Delays are expected due to this fact, causing concern
among developers who might get hit with penalties as a result.
• Domestically manufactured cells with lower prices are selling out first. Prices can vary between 10-15%,
depending on the supplier, after negotiations.
• Price pressure is high due to aggressive bidding.
• Average selling prices (ASP) for modules are in the $0.46-0.49/W (~₹31 -33/W) range. ASP’s for DCR
modules are $0.52-0.60/W (~₹35-41/W).
• ASP’s for solar cells are $0.41-0.42/W (~₹28-29/W) for DCR projects. Chinese Tier 1 cells are available for
$0.28-0.33/W (~₹19-22/W) depending on order volume.
• Manufacturers are not expecting prices to drop significantly for the rest of 2016.
• Net margins were 0-10%.
• Capacity utilization was reported at 80-100%.
• Local manufacturers allege that Chinese modules are being dumped at ~$0.47/W (~₹32/W), below the
$0.50/W (~₹34/W) price sold in China.
©2016 Mercom Capital Group, llc. ALL RIGHTS RESERVED. I www.mercomcapital.com I solar@mercomcapital.com I Page 21
Mercom Capital Group
India Solar Market Update
Investors
• Lenders are in a wait-and-see mode due to aggressive bids.
• With some of the recent troubles in the market, banks want to do a better job when it comes to
promoter/developer due diligence.
• Some lenders think it will be difficult for developers to raise money at the current low tariff levels unless they
increase the equity ratio.
• Banks are concerned that developers are not disclosing actual margins to lenders, which is making it tough
when it comes to decision making.
• There is a difference of ₹0.5 -1 crore (~$0.07-0.15 million) between project cost estimates from banks and
those of developers.
• Some banks may require a greater portion of equity upfront in the future.
• Some banks are comfortable lending at ₹4.5-5 (~$0.0662-0.0735) tariff levels as long as they are confident
in developers’ experience, capacity to execute and ability to repay debt.
• The IRR expectations of foreign developers are much lower than those of domestic developers.
• Generally, banks feel that developer assumptions are too optimistic. They want to see successful financial
closings for these low bid projects before venturing in.
• There is a lot of talk about refinancing projects to bring down the cost of financing.
• Buyer’s credit is helping developers a lot. RBI has allowed foreign investors to extend three years’ credit to
developers with the help of an Indian bank which could be extended two years.
• According to some financial institutions, there is no margin for error when executing projects.
• Standard domestic interest rates are hovering around 11-12%. Companies with a good balance sheet can
borrow at 10.75-11%, and large conglomerates can borrow at less than 10%.
• Capacity factor has not been an issue; projects are achieving an average of 18-19% without trackers and
21-23% with trackers.
• Banks are still waiting to see the impact of UDAY. They recognize that it may solve short term liquidity
issues but are unsure if DISCOMs will start accumulating debt again.
• According to most banks, rooftop projects are too small to finance. Rooftop PPA bankability, roof structures
and the strength of contracts are still an issue.
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Mercom Capital Group
India Solar Market Update
State Programs
Uttar Pradesh: There are about 90 MW of solar projects in operation under Uttar Pradesh State Solar Policy and
about 320 MW of projects under construction. Of this, 105 MW are expected to be commissioned in 2016 and 215
MW in 2017.
Andhra Pradesh: Andhra Pradesh DISCOMs have signed PPAs to develop 619 MW of solar projects with first year
tariffs ranging from ₹5.25-5.99 (~$0.0772-0.0881)/kWh and 3% annual escalation for 10 years. Of these, 506 MW
have been commissioned to date and the remaining 113 MW are expected to be commissioned by the second half of
2016.
Punjab:
1. Phase I - Punjab signed PPAs for 250 MW of solar PV projects in December of 2013 with average tariffs
ranging between ₹8.20-8.40 (~$0.1206-0.1235)/kWh. Of these, about 223 MW have been commissioned.
2. Phase II - There were 277 MW of solar projects with signed PPAs in 2015 under three categories; 1-4 MW
(29 MW), 5-24 MW (100 MW) and 25-50 MW (95 MW). Another 53 MW of rooftop projects are also
estimated to be developed under this phase. Of this, 189 MW including 12 MW of rooftop projects, have
been commissioned. The remaining 88 MW are expected to be commissioned by the end of 2016.
3. Phase III - Punjab also issued RfPs for 500 MW of projects in June; five developers have won the bids with
tariffs ranging from ₹5.09-5.98 (~$0.0749-0.0879)/kWh. PPAs were signed in December of 2015 and the
projects are expected to be commissioned early in 2017.
Madhya Pradesh: Rewa Ultra Mega Solar Limited (RUMSL), a joint venture of SECI and Madhya Pradesh Urja
Vikas Nigam (MPUVNL), invited online bids to select developers for the 750 MW (3 X 250 MW) Rewa Ultra Mega
Solar Project under the Open Category in Gurh Tehsil, District Rewa in Madhya Pradesh. Madhya Pradesh Power
Management Company Limited (MPPMCL) & Delhi Metro Railway Corporation (DMRC) are the proposed power
purchasers while International Finance Corporation (IFC) is the Lead Transaction Adviser.
Kerala: A Kerala State Electricity Board (KSEB) tender for 200 MW of solar projects through tariff-based competitive
bidding for Renewable Purchase Obligation (RPO) of KSEB has been cancelled. A new tender is expected in the
near future.
Haryana: Haryana Power Purchase Centre on behalf of Uttar Haryana Bijli Vitran Nigam (UHBVN) and Dakshin
Haryana Bijli Vitran Nigam (DHBVN) invited tenders for 152 MW of solar projects. The list of bidders is finalized and
PPAs are expected to be signed shortly.
©2016 Mercom Capital Group, llc. ALL RIGHTS RESERVED. I www.mercomcapital.com I solar@mercomcapital.com I Page 23
Mercom Capital Group
India Solar Market Update
Karnataka:
1. Under Batch 3, PPAs were signed for projects totaling 50 MW. A 23 MW project has been commissioned
and the remaining projects are expected to be commissioned by the end of 2016.
2. Under Batch 4, Karnataka Renewable Energy Development Ltd. (KREDL) signed PPAs for 500 MW in early
2015; these projects are expected to be commissioned by the end of 2016.
3. Under Batch 5, tenders were issued for 1,200 MW. This tender was unique as it sought bids for up to 20 MW
on a taluk-by-taluk (county-by-county) basis across 60 taluks in an effort to distribute solar capacity evenly
across the state. One hundred MW of capacity was reserved for solar cell and module manufacturers
located in Karnataka. Letters of Award (LoA) have been signed for 910 MW by bidders with tariffs up to
₹5.50 (~$0.0809)/kWh under the general category and up to ₹6.10 (~$0.0897)/kWh from local solar cell and
module manufacturers. The winning bidders have 60 days to sign PPAs. Projects of 260 MW in 14 taluks
which had been retendered have now been awarded LoAs.
4.5
4.7
4.9
5.1
5.3
5.5
5.7
5.9
6.1
6.3
6.5
0
50
100
150
200
250
Ad
ani
(13
Pro
ject
s)
He
ro F
utu
re E
ne
rgie
s (9
Pro
ject
s)
Re
Ne
w P
ow
er
(9 P
roje
cts)
Ess
el (
4 P
roje
cts)
OP
G P
ow
er
(4 P
roje
cts)
Ad
ity
a B
irla
(3
Pro
ject
s)
Firs
t So
lar
(3 P
roje
cts)
My
tra
h (
3 P
roje
cts)
Asi
an F
ab T
ec
(2 P
roje
cts)
Ath
a G
rou
p (
1 P
roje
ct)
GR
T (
1 P
roje
ct)
Sun
Ed
iso
n (
1 P
roje
ct)
Ris
ha
bh
Bu
ild
wel
l (1
Pro
ject
)
Ra
ys P
ow
er
Exp
ert
s (1
Pro
ject
)
Ka
rvy
Co
nsu
lta
nts
(1
Pro
ject
)
Asi
an F
ab T
ech
(1
Pro
ject
)
Kri
shi
Tech
nlo
gie
s
Jin
da
l Alu
min
ium
(1
Pro
ject
)
Suk
hb
ir S
ola
r E
ne
rgy
(1
Pro
ject
)
GS
Co
nsu
ltan
ts (
1 P
roje
ct)
Tat
a P
ow
er
(3 P
roje
cts)
Em
mve
e (
3 P
roje
cts)
Swe
lect
En
erg
y (
1 P
roje
ct)
Mic
rosu
n S
ola
r (1
Pro
ject
)
General Category Module Manufacturer
Category
Total Bid Capacity (MW) High Bid/Range (₹/kWh) Low Bid (₹/kWh)
Karnataka: List of LoAs Issued to the Successful Bidders for 1,170 MW Solar Projects in 60 TaluksIn the general category bids ranged from ₹4.69 - ₹5.50
Source: Mercom Capital Group (May 2016)
₹/kWhMW
Telangana: The Southern Power Distribution Company of Telangana (TSSPDCL) invited 2,000 MW of solar bids on
a build-own-operate basis in April 2015. PPAs were signed for 1,988 MW in February and March of 2016. These
projects are expected to be commissioned in the second half of 2017.
Tamil Nadu: According to our sources, Tamil Nadu Generation and Distribution Corporation (Tangedco), the state
utility, has signed PPAs at a tariff of ₹7.01 (~$0.1031)/kWh with the projects expected to be commissioned by March
©2016 Mercom Capital Group, llc. ALL RIGHTS RESERVED. I www.mercomcapital.com I solar@mercomcapital.com I Page 24
Mercom Capital Group
India Solar Market Update
of 2016. We have confirmed that 982 MW have been commissioned. Projects commissioned after April 2016 are
expected to receive a tariff of ₹5.10 (~$0.0750)/kWh.
Uttarakhand:
1. The Government of Uttarakhand signed PPAs in March 2015 to develop 30 MW of solar projects through a
tariff-based competitive bidding process. All of these projects were commissioned by March 2016.
2. Uttarakhand Renewable Energy Development Agency (UREDA) signed PPAs to develop 181.4 MW of
projects in March 2016. These projects have a strict deadline of October 2016 for commissioning.
Jharkhand: Jharkhand Renewable Energy Development Agency (JREDA) had issued a tender to develop 1,200 MW
of solar projects in December of 2015. The Letter of Intent (LoI) have been recently awarded for 1,101 MW.
4.7
4.8
4.9
5.0
5.1
5.2
5.3
5.4
5.5
5.6
5.7
0
50
100
150
200
250
300
350
400
450
500
Suzlon
(2 Projects)
OPG Power
(1 Project)
Renew
Power
(2 Projects)
Madhav
Infraprojects
(2 Projects)
Karvy Solar
Power
(1 Project)
ReNew
Power
(12 Projects)
SunEdison
(3 Projects)
Suzlon
(3 Projects)
OPG Power
(2 Projects)
ACME
(1 Project)
Adani
(1 Project)
Category I (1-25 MW) Category II (26-500 MW)
MW Total Bid Capacity (MW) High Bid/Range (₹/kWh) Low Bid (₹/kWh)
Jharkhand: List of LoAs issued to successful bidders for 1,101 MW across 30 ProjectsReNew Power was by far the most s uccessful bidder bagging almost 50% of the total projects approved
Source: Mercom Capital Group (May 2016)
₹/kWh
Odisha: Green Energy Development Corporation of Odisha (GEDCOL) invited a tender for the development of 20
MW of grid-connected solar PV projects in Odisha. The last date for bid submission is June 4, 2016.
©2016 Mercom Capital Group, llc. ALL RIGHTS RESERVED. I www.mercomcapital.com I solar@mercomcapital.com I Page 25
Mercom Capital Group
India Solar Market Update
0 100 200 300 400 500 600 700 800 900 1,000 1,100 1,200 1,300 1,400
Arunachal Pradesh
Jammu & Kashmir
Tripura
Chandigarh
West Bengal
Goa & UT
Kerala
Jharkhand
New Delhi
Haryana
Uttarakhand
Odisha
Chhattisgarh
Uttar Pradesh
Karnataka
Maharashtra
Punjab
Telangana
Madhya Pradesh
Andhra Pradesh
Gujarat
Tamil Nadu
Rajasthan
Source: Mercom Capital Group
India Solar Installations (MW) By Location (May 2016)
Total Solar Installations
7,533 MW
Note: Dollar-Rupee conversions were calculated at $1 = ₹68
©2016 Mercom Capital Group, llc. ALL RIGHTS RESERVED. I www.mercomcapital.com I solar@mercomcapital.com I Page 26
Mercom Capital Group
India Solar Market Update
Acronyms and Abbreviations
AD Accelerated Depreciation
ASP Average Selling Price
BDL Bharat Dynamics Limited
BEL Bharat Electronics Limited
BHEL Bharat Heavy Electricals Limited
CEA Central Electricity Authority
CERC Central Electricity Regulatory Commission
CPSU Central Public Sector Undertaking
CSP Concentrated Solar Power
CY Calendar Year
DCR Domestic Content Requirement
DHBVN Dakshin Haryana Bijli Vitran Nigam
DISCOM Power Distribution Company
DMRC Delhi Metro Railway Corporation
FY Financial Year
GAIL Gas Authority of India Limited
GEDCOL Green Energy Development Corporation of Odisha Limited
GW Gigawatt
HAL Hindustan Aeronautics Limited
IFC International Finance Corporation
IRR Internal Rate of Return
JNNSM Jawaharlal Nehru National Solar Mission
JREDA Jharkhand Renewable Energy Development Agency
KREDL Karnataka Renewable Energy Development Limited
KSEB Kerala State Electricity Board
kWh Kilowatt-hour
LoA Letter of Award
LoI Letter of Intent
MNRE Ministry of New and Renewable Energy
MPPMCL Madhya Pradesh Power Management Company Limited
©2016 Mercom Capital Group, llc. ALL RIGHTS RESERVED. I www.mercomcapital.com I solar@mercomcapital.com I Page 27
Mercom Capital Group
India Solar Market Update
MPUVNL Madhya Pradesh Urja Vikas Nigam Limited
MW Megawatt
NCEF National Clean Energy Fund
NDA National Democratic Alliance
NPA Non-performing Assets
NTPC National Thermal Power Corporation
PPA Power Purchase Agreement
PSU Public Sector Undertaking
PV Photovoltaic
RBI Reserve Bank of India
REC Renewable Energy Certificate
RfP Request for Proposal
RPO Renewable Purchase Obligation
RPSSGP Rooftop PV & Small Solar Power Generation Program
RUMSL Rewa Ultra Mega Solar Limited
SECI Solar Energy Corporation of India
SPPD Solar Power Park Developer
TANGEDCO Tamil Nadu Generation and Distribution Corporation
TSSPDCL Southern Power Distribution Company of Telangana
UDAY Ujwal DISCOM Assurance Yojana
UHBVN Uttar Haryana Bijli Vitran Nigam
UREDA Uttarakhand Renewable Energy Development Agency
VGF Viability Gap Funding
©2016 Mercom Capital Group, llc. ALL RIGHTS RESERVED. I www.mercomcapital.com I solar@mercomcapital.com I Page 28
Mercom Capital Group
India Solar Market Update
About Mercom Capital Group
Mercom Capital Group, llc., is a global communications and consulting firm focused on Cleantech, Healthcare IT and
financial communications. Mercom’s consulting division advises companies on new market entry, overall strategic
decision-making, and provides custom market research. Mercom delivers highly respected industry market
intelligence reports covering Solar Energy, Smart Grid and Healthcare IT. Our reports provide timely industry
happenings and ahead-of-the-curve analysis specifically for C-level decision making. Mercom’s communications
division helps companies and financial institutions build powerful relationships with media, analysts, local
communities and strategic partners. To receive Mercom’s popular market intelligence reports,
visit: http://www.mercomcapital.com.
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Mercom Capital Group
India Solar Market Update
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