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2 Agenda I. Introduction to the Global Solar Market II. Solar in India III. Proposed Solutions IV. Policy and Costs V. Appendix.

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Presentation on theme: "2 Agenda I. Introduction to the Global Solar Market II. Solar in India III. Proposed Solutions IV. Policy and Costs V. Appendix."— Presentation transcript:

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2 2 Agenda I. Introduction to the Global Solar Market II. Solar in India III. Proposed Solutions IV. Policy and Costs V. Appendix

3 3 Introduction to the Solar Market

4 4 Global Electricity Demand $9 Trillion in investments expected globally in the power sector from , led by Asia at $4T, US/South America at $1.5T, Africa at $0.5T

5 5 Solar market growing at 42% CAGR Source: DB Alternative Energy Solar Photovoltaic Industry

6 6 What is the addressable market? In 2010, $100 billion (approximately 5%) of global retail electricity demand could be competitively addressed with solar power… ~600 GWs ($2 Trillion of Solar) Area of solar competitiveness Electricity Price Rising

7 7 Solar Pricing Trends System prices have fallen 40% in 2009 vs. 2008, more to come in 2010, then stabilizing to long-term trend of 5% p.a. System Efficiency increases will be most interesting

8 8 Demand lags Supply by over 12 months Pipeline 6 – 24 months Constructible Backlog 3 – 6 months Construction 3 – 12 months Land & title Host credit Interconnection Rebate application Large Buildings Unusable Land Open Fields Lighting/Off-grid Power purchase agreement Renewable credit Tax profile Margin analysis re-run Secured bank commitment Construction sign off CFO sign off on budget Aligned panels / site prep Margin analysis Site prep Mechanical Electrical work Panels installed over time Interconnection Independent Engineering Sold / funded Tollgate $$$

9 9 Solar in India

10 10 Global Solar Resource Source: Global Green USA  India has the best solar resource in Asia  All technologies work in India even technologies that generates electricity only from direct normal insolation (DNI)  Areas where utility scale solar farms will be deployed  Thin-Film and Multijunction solar cells can easily be mfg in India and have ½ performance degradation due to temperature  Latitude Zones Best Suited for HCPV

11 CPV is a technology well suited for India Industry Leading LCOE Low CostReliability Small Footprint Built-in Tracking Most cost-effective through highest performance PV technology available Design hardened through 15 years of real-world utility experience >40% higher energy generation than fixed flat plate PV systems 4- 6 acres/MW of installed capacity Low Environmental Impact Water is not required to operate HCPV, pedestal mount requires little excavation Solid Path to Bankability Nearly 13 MW installed worldwide in the utility scale installations Extended system life through field replaceable/upgradeab le solar cell Reduced Risk Visible Systems make highly visible statement of clean energy production Complete 53kW (AC) Solar Generator Easily Replicable and Scalable One to Hundreds of Megawatts

12 12 Solar in India

13 13 Solar is not Ready... Or is it India who is not Ready? Wireless Telecom as an Example: India leapfrogged landline phone through Wireless after 2000 Telecom industry was in trouble and India bought equipment cheap Wireless is not cheaper than landlines, but Communication was the #1 source of productivity growth in this decade – leading to GDP growth in India Today Solar industry is in the same position and can be exploited

14 14 Defining Utility 2.0 The main challenge is that Utilities do not know how to profit under the coming financial model “2.0” Energy Efficiency Self Generation Independent Power Producers

15 15 Utility 2.0 Control Generation Load Storage Energy Storage Thermal Storage (Ice Storage) Load Demand Reduction Solar Load Controllers Storage Based Load Load Shifting (Ice Energy) Control DG Operations Center 24 Hour irradiance Forecasting SCADA Monitor, Analyze, Report & Control Tariff Optimization Generation Point of Load DG Substation Level DG

16 16 India’s biggest challenge to growth is Energy Price is not as important as the EXISTENCE of electricity Global slowdown is reducing the cost of solar equipment India continues to be unable to institute land and water policies necessary to grow electricity simply through new Coal Nuclear is proving to be just as difficult and costly as Coal What is the trade off between price and GDP growth Is sustaining near-term GDP growth enough to justify a 1% rate increase in electricity costs? Village electrification – data shows that household electrification results in a 64% increase in family income Airports, shopping centers, deserts, and industrial sites can cover 20,000 MW of solar without using agricultural land

17 17 Solar is a Better Energy Product  Solar is too small » Solar is scalable and growing It is widely understood that solar is a zero-emission energy source. BUT -Solar is growing globally at 41% per annum -Solar combined with other smart grid technologies can meet 100% peak load growth -Nuclear, coal, natural gas power plant costs have increased significantly -Transmission infrastructure has increased in costs and takes significant negotiation -Distributed technologies can be built quickly, averting power crises more effectively  Solar is too expensive » Solar is competitive -Combined with demand response, solar is as predictable as a fossil fuel peaking plant -Solar is well correlated to air conditioning loads  Solar is not firm » Solar is predictable -Each year over 100 million square meters of new roofs are installed – supporting far more than 10 GW solar needed to meet 100% of load growth plan in India -Brownfields, airports, wastewater treatment facilities, public lands are excellent sites  Solar takes up too much space » Solar is space is available

18 18 Module and system price trends  Global financial crisis is accelerating the price reductions above -Liquidity is available from multilateral organizations -India has created solar projects over the last 18 months and is ready for deployment »Distributed Generation is fast but still takes 12 months »Central Station plants take 2 years from signing to construction  Prices are collapsing – question is brand, liquidity, warehousing

19 19 Proposed Solutions

20 20 India Solar Programs  India has been a leader in Solar Energy for over 20 years  Rural Electrification Program  Solar Home Systems  Water Pumping  Public Facility Solar Projects  Government should lead with its buildings and land  PV in Communications, Weather, Long-Distance Pipelines, Railways and Highways  Large-scale PV & Solar Thermal Power Stations  50 MW MNRE program with other State programs

21 21 Suggested Grid Connected Solar program  New Goal: 20,000 MW program by 2020, starting with 100 MW in 2010  Grow at 50% annually to meet ~2% of India’s needs by 2020  Allow for 80% depreciation on all systems  Encourage State Electricity Boards to provide the full tariff without incremental support from MNRE  Encourage construction of integrated solar manufacturing  Creates 1,000,000 direct job-years of employment  Target is that solar should reach ~2% of grid by 2020  India becomes the most important World Market by 2012

22 22 Policy and Costs

23 20,000 MW by 2020 – Get out in Front!  Generous 20 year Feed-in Tariff (FIT) – set Rs 15 per kWh at the start of the program to show seriousness and attract players  Reduce FIT based on MW targets – not calendar  Obligation for hassle free interconnection to the grid and purchase electricity through renewable sources in priority to conventional electricity.  Training program for contractors to learn how to install solar PV – grant funding 23

24 24 Suggested Policy Changes  Incentives  A 20,000 MW program across India, example: TierMW (% of grid)Total FIT Price – Utility plus Central (20-25 yr) % of GridJobs Years $ 0.30/kWh0.1% 18, $ 0.25/kWh0.2% 24, ,200 $ 0.23/kWh0.3% 36, ,500 $ 0.21/kWh0.5% 45, ,900 $ 0.19/kWh0.6% 57, ,300 $ 0.17/kWh0.8% 69, ,000 $ 0.15/kWh1.0% 90, ,000 $ 0.14/kWh1.3% 120, ,700 $ 0.13/kWh1.6% 141,000 Total 20,000MW$0.30/kWh1.6%~600,000

25 25

26 26 Suggested Policy Changes  Utility Rates and Revenue Policies  Charge customers real cost of electricity – peak and off-peak  Subsidize rates for the poor: tiered rate structure, lowest price for the first 150 kWh used per month, higher after that to encourage middle-class and wealthy people to conserve  Interconnection  Allow consumers to interconnect without interference, hassle  Streamline process for projects up to 10% of distribution feeder capacity  Accept all internationally recognized standards with which local manufacturers are already comfortable (UL, TUV, IEC)

27 27 Suggested Policy Changes  Incentives  A 20,000 MW program starting with 100 MW in 2010 growing at 50% per year would meet ~2% of India’s energy needs by 2020, with a revenue impact of less than ~0.9%  Support Smart Grid Infrastructure  Lowest cost way to transition from 20 th to 21 st century grid. Also needed for high penetration of Solar PV.

28 28 Utility 2.0 Control Generation Load Storage Energy Storage Thermal Storage (Ice Storage) Load Demand Reduction Solar Load Controllers Storage Based Load Load Shifting (Ice Energy) Control PV Operations Center 24 Hour irradiance Forecasting SCADA Monitor, Analyze, Report & Control Tariff Optimization Generation Point of Load PV Substation Level PV


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