Solar thermal collector panels gather the sun’s heat, which is then directed to heat water so that the ensuing steam energy can be captured.

For another project — involving photovoltaic technology — 300 companies have been short listed.

Solar-thermal collector-based power plants are seen as cheaper to set up, leading the Central Electricity Regulatory Commission to stipulate a lower price of Rs15.31 per unit compared with Rs17.91 promised for photovoltaic panel-based solar plants.

While Lanco Power and KVK Energy have offered a discount of Rs4.82 and Rs4.11 per unit, respectively, for 100 Mw capacities in Rajasthan for solar thermal modules, another company, Megha Energy’s discount works to Rs4 per unit for a capacity of 50 Mw, according to sources.

The Reliance Power-promoted Rajasthan Sun Technique has offered a discount of Rs3.34 for setting up a 100 Mw solar plant.  Under Jawaharlal Nehru Solar Mission Phase-I, the discounts are much higher than anticipated by NTPC Vidyut Vyapar Nigam Ltd.(NVVNL), nodal agency for the project.

It received applications for developing 1,740 Mw of photovoltaic projects, compared with a target of 150 mw in the first batch of Phase-I.

 DNA

James Abraham, CEO Sunborne Energy

Renjini Liza Varghese

India has a huge solar power potential. How do you see the market shaping up in this segment?
The government has come out with a plan to tap the solar energy potential in the country with the Jawaharlal Nehru National Solar Mission (JNNSM). The sector is still in a very nascent stage.  Majority of the players will adopt proven technology from other countries. Right now, the concentration we see is in the solar photovoltaic. But for solar thermal it is a wait and watch attitude, for now at least.
�
Do think the plan of achieving the 20 Gw by 2022, the target set under the solar mission, is achievable?
The target of 1Gw by 2013 as the first phase of solar mission is doable; 5 Gw in the second phase appears to be an achievable target too with some subsidies. However, in the last phase of the solar mission, we may not achieve the set target.
�
Solar pv as you said is being adopted widely now in the country. But there are lot of complaints about the quality of the product being distributed in the country. Your comment?
 As I said earlier, it is in the premature stage. Like any other industry, we see a lot of fly by night players here as well. These are the initial hitches of a growing segment.  Solar pv the high prices may be also playing a role in making the consumers opting for cheaper models available in the market. The prices will reduce as competition is increasing. The products are 20 per cent cheaper than a few years back. It will be 20 per cent more cheaper by 2014.
�
Cost of production and tariff is a major concern for players in the field. Especially for those who are looking at solar thermal. Going forward, where do you figure in solar thermal?
Rajasthan, Gujarat, Madhya Pradesh and parts of Maharashtra are the best states to set up solar projects. Our target is 50 Mw grid connected solar thermal. In this, there are only few players present because of the high cost involved. We need large investments to set up a solar thermal plant – the requirement is anywhere between Rs 700-800 crore. The solar power tariff levelisation wil be with that of diesel generated power. Given the present tariffs, we can say, it could be around Rs 9 per unit.
�
Does it mean that medium-sized captive power generators will move to solar?
Yes, the medium sized operator will be opting for solar more. Malls for instance, where your dependence on electricity after sunset is only for a few hours. Right now, these commercial establishments are dependent on diesel generated power.�
�
When do you see solar becoming economically viable?
I see it becoming economical by 2014. And by the end of that decade, 24 hour solar power should become a reality. Currently it is solar pv which is the leading technology, but in the second phase of the JNNSM, pv will be only 10 per cent and by the end of third phase, it will be 10- 15 per cent solar pv and the rest will be solar thermal. In pv, efficiencies are rising while material and process costs are coming down. In solar thermal, operating temperatures are increasing and components are becoming commoditised.�
�
Which places do you see India lacking in solar power?
There is very little R&D in solar in India and this needs to change quickly. The sector players should take advantage of the local supply chain to bring down the cost. Going forward, for those states which are looking at balancing their energy basket will surely will turn to solar thermal.

MBPPL has a 7.4 Mw operating solar farm asset in Germany and a 5 Mw solar power project under construction in Tamil Nadu. Besides, the company will invest in the country’s largest solar power plant, a 45 Mw one, in Gujarat, whose financial closure is expected within a month.

Commenting on the deal, Akhil Gupta, chairman and managing director of Blackstone Advisors India Private Limited, said: “We have been studying the Indian power sector for over a year. We elieve that  MBBL have a good  track record of completing large projects on schedule and on budget. In addition, their strategy of developing assets across multiple fuel sources is compelling.”

Elaborating on the partnership, Deepak Puri, founder, MBPPL said: “Needless to emphasize the criticality of India’s energy requirement which would require massive investments to sustain its high growth trajectory. Since the government’s resources are limited, the private sector has an important role to play.”

The PE fund has so far invested US $1.25 billion  in 12 Indian companies. It recently secured a 12.5 per cent stake in Monnet Power Company (MPCL) for US $60 million. It also has investments in Indian companies like newspaper firm Jagran Prakashan, garment maker Gokaldas Exports, Allcargo Global Logistics, Nagarjuna Construction and Emcure Pharmaceuticals. Blackstone has said that infrastructure development continued to remain one of its key investment themes in India.

The growing demand for power has made many a companies to diversify into power generation.  And some of them who have realised the potential of green energy segment are making big splash in the solar power business.  One of such company is south India based Sujana Energy.  A US $1.3 billion steel major ventured into power sector five years back with transmission towers, now is also active in solar power.

“India, in solar, till date was dependent on global technologies. This model has its own constrains. For a country like ours where every states has unique geographical features needs a technology which can be adapted in these regions.  A different business model and different energy strategy, needs to be evolved” said Hari Kiran Chereddi, managing director, Sujana Energy Limited

Pointing out solar power sector is in nascent stages and to address the concerns of high cost of power generation using solar we need to concentrate on R&D.  “The problem one faces when one takes on foreign firm as the technology partner then you are ruled by the whims and fancies of the tech partner. There are times when one is forced to scrap the tie- up and look for a more workable partnership. At this point, you end up loosing a lot of time.

But we have changed the business model all together. We have bought technologies, which failed to take off or were scrapped halfway through due to rising R&D costs in other countries and using our own R&D strength,  we modified them and made these technologies suitable to our conditions.

Majority of the projects coming in solar are on the solar pv side, solar thermal may still take further time before it gets implemented. “With solar pv the main drawback is the scalability. There is high potential of innovation. And through innovation the prices can be brought down,” he added.      

Solar parabolic though a tested technology but in Indian context,  we have to understand that,  intensity of sun is not an issue but availability of water is. 

And in the regions where water is available the sun intensity is not adequate.  Higher the height of mounting, the cost also goes up. Keeping in mind the cost factor and the risks involved, Sujana had taken the R&D to implementation level by replacing glass by aluminum plates. Normally it is large glass panels which are mounted 10 to 12 meters above the ground level.

 “Sujana with its own technology combined with some measures like that of a) instead of glass started using highly polished aluminum coated with mirror film b) reduced the height of mounting of panels to 2- 4 meters above the ground, were able to bring in cost effectiveness. After the sun set the panel tilts upside down which decreases the cleaning efforts,” Chereddi explained.  With the new panel the land required per Mw is reduced to four and a half acres against the five acre requirement and Sujana technology is is 30 per cent cheaper than the existing technology. “We are training the buyers on trouble shooting to address the concern of lack of post sale assistance,’ he added.  

Going forward, Cherredi feels that a combination of solar thermal and biomass technology or hybrid solar will be more workable than a single technology in green energy spectrum.

The US Trade and Development Agency (USTDA) extended a grant to help fund the feasibility study for Jordan’s first major private solar-power project on the sidelines of the MENA Power 2010 forum in Cairo. According to a statement from Kawar Energy, the estimated cost of the project is US $400 million, and the USTDA grant will be used to assist to implement the plan, evaluate technology and assess equipment.

While Algeria has proven natural gas reserves of 4.5 trillion cubic meters, the country also has a high potential of solar energy. Annual solar irradiation is about 1,700 kWh per square meter for the northern part of the country and 2,263 kWh per square meter in the south of the country.

In May 2010, Cevital, Algeria’s largest private company, began seeking foreign investors to help it build an US $8 billion solar power complex to export electricity to Europe.
Although the United Arab Emirates has been a member of OPEC since 1967 and has proven natural gas reserves of more than 6 billion cubic meters, proven crude reserves of 97.8 billion barrels, it is also implementing various solar power projects.

This month Abu Dhabi Future Energy Company unveiled the Shams 1 project, which is being developed in collaboration with Total SA of France and Abengoa Solar of Spain. The project will contribute 7 per cent of the energy needs of Abu Dhabi from renewable energy by 2020.

How does the National Solar Mission fare compared to other emerging economies? Are there similar initiatives among the BRIC/ BASIC countries?
India is one of the few countries in the world which have announced a long term policy to support development of solar energy by launching the Jawaharlal Nehru National Solar Mission. The objective of the National Solar Mission is to establish India as a global leader in solar energy, by creating the policy conditions for its diffusion across the country as quickly as possible, and make solar power competitive to conventional grid power. The mission aims at setting up of 20,000 Mw grid solar power and 2,000 Mw of off-grid solar power including 20 million solar lights by 2022. In addition, it aims at installation of 20 million square metres of solar thermal collector area by 2022. The mission will be implemented in three phases. In the first phase, up to 1,100 MW grid-connected solar plants, including 100 Mw capacity plants as rooftop and small solar plants will be set up. In addition, 200 Mw capacity equivalent off-grid solar applications and 7 million square metres of solar thermal collector area, including roof-mounted solar systems, are proposed in the first phase of the Mission, till 2012-13.

Given that the solar industry is in its infancy, how does the government plan to meet developmental challenges in terms of building capacity in the short time scale envisaged by the mission?
India has a vibrant solar industry for manufacture of solar cells and modules and also for solar thermal collectors for water heating applications. The Indian solar industry regularly exports products to various countries including the EU and the US markets. I am sure that as the domestic demand increases the local industry will find the domestic market as the market of first choice.

As power is a concurrent subject, what initiatives would you expect from the states in order to implement the mission?
In order to kick start the process, the NTPC Vidyut Vyapar Nigam (NWN), the trading subsidiary of NTPC, has been identified by the government to be the nodal agency for purchase of 1,000 Mw capacity of grid solar power (connected to 33 KV and above grid). NWN will buy solar power from the project developers at a tariff fixed by Central Electricity Regulatory Commission (CERC) for purchase of solar power. NWN will sign a PPA with each project developer at this rate for a period of 25 years as fixed by CERC. For each Mw capacity of solar power for which PPA is signed by NWN, an equivalent Mw capacity of thermal power shall be allocated to NWN by the ministry of power from the unallocated quota of NTPC stations. Thus, for every unit of solar power, about four units of thermal power will be sold by NWN to the utility. The utilities shall be allowed to adjust this purchase against their RPO obligations for renewable power. The States are excited and motivated at this unique arrangement.

The policy talks about promoting off-grid applications for meeting rural needs. What specific applications are likely to be promoted? Is there a timeline for these initiatives? How will the government promote these applications? Will it involve local entrepreneurs?
The mission will support off-grid solar applications for both rural and urban needs. In the first phase, the mission will consolidate the ongoing initiatives and also promote development of new initiatives and business models. A number of applications, such as solar water heating, solar lights, diesel replacement systems, power for remote villages, and power for rural telecom systems have the potential to expand very fast. However, this can happen only with the participation of a large number of stakeholders including local entrepreneurs, NGOs, private sector and government agencies.

The recent launch of Jawaharlal Nehru National Solar Mission under the brand name “Solar India” was a boost to those companies which are already present in the segment. Small roof-top solar panels are giving way to large solar farms with larger capacities starting with one Mw capacity.

Large solar farms with larger capacities of solar energy generation is what is in the offing now. Moser Baer photo-voltaic is setting up solar farm with capacities of 700 Mw over next three years. Out of the said capacity, 200 Mw will be set up in the current year. The first two farms of five Mw each will be coming up in Tamil Nadu and Rajasthan, respectively, in February and April. The first farm in Maharashtra of one Mw capacity will be commissioned in February in Chandrapur near Nagpur. This facility is being created for the Maharashtra State Power Generation Co. Ltd (Mahagenco). 

Moser Baer which entered the solar energy generation equipment division a couple of years back got a global presence with projects in 15 countries including Germany, Spain, Italy, US and UK. “It made sense for us to enter the solar energy business as we were already present in the semi-conductor based business with large volumes. We see large growth potential in this segment as the renewable energy sector is getting more and more attention domestically and internationally,” said Rajiv Arya, CEO, Moser Baer Photo Voltaic Ltd.

India is one of the countries where sunlight is in abundance and there are more than 300 sunny days which make it viable for solar developers. 

But concerns like higher price per unit and inadequate after sales services, according to the industry representatives, are holding the sector back. In the current scenario, it costs Rs 18 per unit to produce a single unit of electricity using solar PV cells, compared to Rs 3-4 for coal-generated power. 

Industry experts point out that prices are comparatively high largely because of the high cost of equipments and capital investments in technology. Arya counters by saying: “Even though the current cost of solar is high, it is declining rapidly as equipment costs continue to fall. In the interim, there is a need to support and promote solar as a viable energy alternative by way of subsidies and feed-in tariff. Solar energy constitutes only 0.001 per cent of the total grid power in India. Hence, high costs initially do not impact the consumer. And in the peak period, power is traded at a much higher regime; say around Rs 8 or 9. Hence the gap is not huge as is being projected and is attainable. Solar is socket head energy and therefore, does not have transmission and distribution costs.”

Technology is where the largest investment now happening from the company’s side. It is true that the solar sector has evolved considerably in last five years. The main three products, viz., crystalline silicon cells and modules, concentrator and thin film modules. Crystalline silicon continues to be the baseline product with over 80 per cent market share. However, other products like thin film are expanding due to their cost profiles or better energy generation capabilities in certain geographies.

“Moser Baer is straddling multiple technologies: Currently, crystalline silicon with 80 Mw and thin film with 40 Mw capacities and will expand to 500 Mw using both technologies. We have also invested concentrator technology which is in the validation stage. The business in short and medium term is all about crystalline silicon and thin film. However, we are very well positioned to capitalise on emerging technologies and mass manufacture them at an appropriate product evolution stage,” Arya said.

“India needs to install 15,000-20,000 Mw of power generation facilities every year to meet the GDP growth requirement. Solar energy forms a minor component of this capacity addition. Hence, affordability in the solar space is envisaged till 2030 is practical and doable,” added Arya.

Moser Baer has also put in place the country’s first off-grid solar project was put in place at Surat. The new municipal building in Surat is run completely on solar energy. Twenty-five installations from houses to malls and government buildings ranging from 10kV to 200kV solar energy have been installed.