1. Solar: The Parity Paradigm Solar Market in India- May 2013 Rupesh Agarwal Rupesh.agarwal@in.ey.com

2. PresentationPage 2 Solar Market Opportunity abound 2013-142016-172019-20 Total demand (MU) 1,084,610 1,354,874 1,660,783 NAPCC RPO trajectory proposed 0.75%1.50%2.25% Solar MU required 8134.57520323.1137367.6175 Solar CUF assumed 19% Solar MW required 48871221022451 Solar power capacity at the end of 2012-131686 MW Solar power capacity additions required during 2013-14 to 2019-20 ~22,451 MW @ ~3000 MW p.a. on average Plan target for 2012-13 to 2016-179,000 MW @ ~1,800 MW p.a. on average Note: Total MU demand as per 18 th EPS numbers as reflected in National Electricity Plan Jan 2012, CEA. Solar CUF based on CERC Tariff Order for generic RE tariffs. Plan Target: 3600 & 5400 MW Source: CEA, 18 th EPS, NAPCC, MNRE, CERC, EY analysis State programs key to achieving the NAPCC goals by 2020.

3. PresentationPage 3 Solar Tariffs Sharply bridging the parity gap L1 bid comparison (levellized) – Thermal & Solar in INR/kWh < Rs 1 Rising cost of coal Average 10% hike seen in domestic coal prices yearly Imported coal ~ 3X higher Fuel shortage Around 60 GW conventional capacity estimated to be in trouble due to lack of domestic fuel Favorable market scenario India ranked the 4 th most attractive market for Renewable Energy as per EY Cleantech Country attractiveness indices (CAI) Falling capital costs Module prices fell by over 60% in last 5 years, projected to fall further ~30% by 2020. Sources: CEA, CIL, Market Reports

4. PresentationPage 4 Solar Policies Multiple approaches and moving flag posts Selection Criteria : L1 Actual: All required to match L1 offer Selection Criteria :MoU 2 Phase Tariffs Gujarat Rajasthan Selection Criteria : L1 at district level Actual: All required to meet L1 Andhra Pradesh Selection Criteria : L1 to Ln Karnataka Selection Criteria : L1 to Ln Annual escalation provided Actual: All required to match L1 offer Tamil Nadu Selection Criteria : Phase I – L1 to Ln. Phase II : VGF, Base tariff – Rs 5.45 / kWh JNNSM Sources: Policy Documents MP: L1 to Ln

5. PresentationPage 5 Japan Solar Country Attractiveness Attractive but a difficult market Solar attractiveness rank as per EY CAI Ease of doing business rank United States Germany Australia France S. Korea Saudi Arabia Spain UAE Portugal Austria China Israel Italy Tunisia Mexico Greece Morocco Romania Turkey Canada South Africa United Kingdom Poland Taiwan Belgium Ukraine Brazil India Sweden Denmark Netherlands Bulgaria Egypt Chile Size of bubble represents the size of the solar PV market (5 year till 2016), as per EPIA projections (Global Market Outlook for PV until 2016, Policy-driven scenario). Where market size was not available in EPIA projections, it has been approximated based on market insights. For countries where CSP is expected to dominate, the same has been considered. Solar attractiveness ranks as per Ernst & Youngs Country Attractiveness Indices (Nov 2012); top 35 ranks considered. Ease of doing business ranks based on 2012 Doing Business Report - The World Bank.

6. PresentationPage 6 Solar Parity Key Takeaways Long term vision Plan Targets in sync with desired renewable mix Clear visibility of Annuity of Target / Capacity Consistent policy Standard procurement documents Uniformity in procurement: Central & State/s Policy objective Solar tariff Domestic content Payment security ~100% of the capacity by private entities Timely payment Domestic debt Non-recourse loans Loan tenure ~ to PPA tenure Need competitive & consistent procurement not competition among procurers.

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