Solar Sector

Outlook
Page | 1

Index

Energy
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Energy is integral to our lives in the 21st century. Energy keeps us warm, cools us
down, and cooks our meals. It helps us connect with our children, and lights the garages and
labs of entrepreneurs and inventors building a better world. Energy harvests our food, fuels
our factories, builds our cities, and cleans our water. It keeps us mobile and connected with
others near and far. The 21st century already has witnessed major changes in how people use
energy for example, Internet-connected smartphones were introduced only around 2000;
today there are more than 2.5 billion of them worldwide. This century also has seen
tremendous advances in energy technology including the ones that unlocked North
Americas vast resources of unconventional oil and natural gas. Together, these technologies
have ushered in a new era of energy abundance and diversity. Today, our energy can come
from deep below the ocean floor, beds of shale rock, nuclear fission, biofuels, the wind and
the sun. And importantly, development and use of each of these energy sources continues to
evolve in ways that reduce impacts on the environment. While energy supplies are evolving,
fundamentals on the demand side have been undergoing their own dynamics. Many
economies continue to struggle, even more than five years after the global recession, while
others, including that of China, continue to expand significantly, albeit at a more modest
pace. Even so, global economic output has risen about 50 percent since 2000, with better
living standards for hundreds of millions of people.
Another positive trend is our ability to find ways to use energy far more efficiently, curbing
growth in energy usage and emissions. The world uses about 10 percent less energy per unit
of economic output than it did in 2000, with half of this gain occurring since 2010. Still, the
need for energy remains vast. Global demand for energy rose by about one-third from 2000 to
2015, with China accounting for about half of this growth. Meeting growing energy demand
is an ongoing challenge, recognizing the scale of supplies required to meet the needs of 7
billion people each day. The use of oil alone representing just one-third of the worlds
energy consumption is now approaching 95 million barrels a day, enough to power a car
100 billion miles, or 4 million times around the world. Several themes remain true today:
Modern energy is fundamental to our standards of living; practical options for meeting
peoples energy needs continue to expand, including those related to efficiency; and the
energy industry is huge, growing and connecting regions through trade.

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Energy industry
The energy industry is the totality of all of the industries involved in the production
and sale of energy, including fuel extraction, manufacturing, refining and distribution.
Modern society consumes large amounts of fuel, and the energy industry is a crucial part of
the infrastructure and maintenance of society in almost all countries.
In particular, the energy industry comprises:

the petroleum industry, including oil companies, petroleum refiners, fuel transport and
end-user sales at gas stations

the gas industry, including natural gas extraction, and coal gas manufacture, as well as
distribution and sales

the electrical

power

industry,

including electricity

generation, electric

power

distribution and sales

the coal industry

the nuclear power industry

the renewable

energy

industry,

comprising alternative

energy and sustainable

energy companies, including those involved in hydroelectric power, wind power,

and solar power generation, and the manufacture, distribution and sale of alternative fuels

traditional energy industry based on the collection and distribution of firewood, the
use of which, for cooking and heating, is particularly common in poorer countries

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Sources of energy
Sources of energy

Conventional sources of energy

Non conventional sources of energy

SOLID- coal, coke,

cokeanthracite etc.

Solar energy

LIQUIDS- petroleum and its

derivatives

Nuclear energy

GASES- natural gas,

blastfurnace gas etc

Tidal energy

Geothermal energy

Wind energy
Thermoelectric
energy

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Renewable energy
Renewable

energy is

generally

defined

as

energy

that

is

collected

from resources which are naturally replenished on a human timescale, such

as sunlight, wind, rain, tides, waves, and geothermal heat. Based on REN21's 2014
report,

renewables

contributed

19

percent

to

humans' global

energy

consumption and 22 percent to their generation of electricity in 2012 and 2013,

respectively. This energy consumption is divided as 9% coming from traditional
biomass, 4.2% as heat energy (non-biomass), 3.8% hydro electricity and 2% is
electricity from wind, solar, geothermal, and biomass. Worldwide investments in
renewable technologies amounted to more than US$214 billion in 2013, with
countries like China and theUnited States heavily investing in wind, hydro, solar and
biofuels.
Renewable energy resources exist over wide geographical areas, in contrast to other
energy sources, which are concentrated in a limited number of countries. Rapid
deployment

of

renewable

energy

and energy

efficiency is

resulting

in

significant energy security, climate change mitigation, and economic benefits. At the
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national level, at least 30 nations around the world already have renewable energy
contributing more than 20 percent of energy supply. National renewable energy
markets are projected to continue to grow strongly in the coming decade and
[Link] places and at least two countries, Iceland and Norway generate all
their electricity using renewable energy already, and many other countries have the
set a goal to reach 100% renewable energy in the future.

Top 10 countries with highest % of renewables

100
90
80
70
60
50

98
79

73.4

70

62.8

62.6

62.5

58.5
42.8

42.1

40
30
20
10
0

The graph represents the top 10 countries with highest % of renewables in their sources oof
energy,
Page | 7

% of renewables in developing countries

100
90
80
70
60
50
40
28.3

30
20

22.9
16.2

13.7

20.1
12.1

14.9

10
0

US

China

India

UK

Germany

Australia

Japan

The graph represents the share of renewable sources of energy in the major econmies of the
world.

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investment
investment
350
300
250
200
150

273.73

100
50
0

174.93
61.86

88.05

318.35

296.99

271.91

315.85 328.93

205.56207.26

128.31

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

140

120

100

80

Europe
US
China

60

India
Brazil

40

20

0
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

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Sources of energy India

Renewable energy composition

127.00
4,161.00
4,550.00

6,763.00
26,744.00

Wind Power

Solar Power (SPV)

Small Hydro Power

Waste to Power

Biomass

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Solar energy- global

Solar energy is the energy received in the form heat and radiations from sun. Mankind
has been harnessing solar energy since ancient times using ever-evolving technologies. The
Earth receives 174 petawatts (PW) of incoming solar radiation (isolation) at the upper
atmosphere. Approximately 30% is reflected back to space while the rest is absorbed by
clouds, oceans and land masses. The amount of solar energy reaching the surface of the
planet is so vast that in one year it is about twice as much as will ever be obtained from all of
the Earth's on renewable resources of coal, oil, natural gas, and mined uranium combined.
Solar energy can be harnessed in different levels around the world. Depending on a
geographical location the closer to the equator the more "potential" solar energy is available

Solar energy has experienced an impressive technological shift. While early solar
technologies consisted of small-scale photovoltaic (PV) cells, recent technologies are
represented by solar concentrated power (CSP) and also by large-scale (PV) systems that
Page | 11

feed into electricity grids. The costs of solar energy technologies have dropped
substantially over the last 30 years.
The rapid expansion of the solar energy market can be attributed to a number of supportive
policy instruments, the increased volatility of fossil fuel prices and the environmental
externalities of fossil fuels, particularly greenhouse gas (GHG) emissions.
It is visible that though energy usage from renewables is increasing but still the majority of
energy is supplied by fossil fuels and there is a long time before world becomes
independent from fossil-fuel usage. There is a need of continuous improvement and
implementation of renewable technologies.
The installed capacity of solar power is as follows:

installed capacity of solar power

45
40 38.25
35
30
25
20

28.33
23.4
18.66

18.31

15
10
5.6
5

5.3

4.1

3.15

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Solar Energy Sector - India

.

India is facing an acute energy scarcity which is hampering its industrial growth and

economic progress. Setting up of new power plants is inevitably dependent on import of

highly volatile fossil fuels. Thus, it is essential to tackle the energy crisis through judicious
utilization of abundant the renewable energy resources, such as Biomass Energy solar Energy,
Wind Energy and Geothermal Energy. Apart from augmenting the energy supply, renewable
resources will help India in mitigating climate change. India is heavily dependent on fossil
fuels for its energy needs. Most of the power generation is carried out by coal and mineral
oil-based power plants which contribute heavily to greenhouse gases emission.
Solar Power a clean renewable resource with zero emission, has got tremendous
potential of energy which can be harnessed using a variety of devices. With recent
developments, solar energy systems are easily available for industrial and domestic use with
the added advantage of minimum maintenance. Solar energy could be made financially viable
with government tax incentives and rebates. Most of the developed countries are switching
over to solar energy as one of the prime renewable energy source. The current architectural
designs make provision for photovoltaic cells and necessary circuitry while making building
plans. Because of its location between the Tropic of Cancer and the Equator, India has an
average annual temperature that ranges from 25C 27.5 C. This means that India has huge
solar potential. The sunniest parts are situated in the south/east coast, from Calcutta to
Madras.
The sun, says the Rig Veda, is the soul of all beings. Yoga, a globally acclaimed
symbol of Indias soft power, begins with the surya namaskar. Today, faced with our soaring
energy demand, potentially irreversible climate change and depleting fossil fuel reserves, we
are now turning to the sun for clean and renewable power, which will not only safeguard the
nations long-term energy security but also the future of the planet. India as a civilisation has
revered nature for its life-giving properties and has been powered by renewable sources since
ancient times. Modern India generates almost a third of its power using renewables sources water, wind and a small part from the sun (<1%) while the rest comes largely from fossil
Page | 13

fuels (coal, oil, gas). These fuels have been the mainstays of power generation for the past
few decades and would have continued to do so but for their escalating prices. Also, an
ongoing lack of consistent fuel supply to meet even the current demand, along with the
clamour against global warming, has put the energy industry under increased pressure and the
focus is now on renewable sources of power like the sun, water, geothermal, biomass and
wind.
Large hydro projects, comprising almost a third of the current power generation
sources, have hit numerous roadblocks due to people displacement, global warming, habitat
destruction and land submergence. Biomass initially started off well but due to unplanned
supply chain issues, has resulted in almost 75% of the 2 GW installed capacity coming to a
standstill. Tidal and geothermal are almost non-existent in India while wind has played a
significant role in increasing the acceptability of renewables, but hasn't really contributed to a
scalable solution. Biomass has been an abject failure due to fuel price rise, with 75% of the
installed 2 GW capacity currently without adequate biomass supply. Wind turbines generate
unscheduled power for just a few months, making them unsuitable for mainstream power
generation, especially in the Indian context, and were only successful due to huge corporate
tax benefits
Indias substantial and sustained economic growth is placing enormous demand on its
energy resources. The demand and supply imbalance in energy sources is Pervasive requiring
serious efforts by GoI to augment energy supplies. India imports about 80% of its oil. There
is a threat of these increasing further, creating serious problems for Indias future energy
security. There is also a significant risk of lesser thermal capacity being installed on account
of lack of indigenous coal in the coming years because of both production and logistic
constraints, and increased dependence on imported coal. Significant accretion of gas reserves
and production in recent years is likely to mitigate power needs only to a limited extent.
Difficulties of large hydro are increasing and nuclear power is also beset with problems. The
country thus faces possible severe energy supply constraints.
Economic growth, increasing prosperity and urbanization, rise in per capita
consumption, and spread of energy access are the factors likely to substantially increase the
total demand for electricity. Thus there is an emerging energy supply-demand imbalance.
Already, in the electricity sector, official peak deficits are of the order of 12.7%, which could
increase over the long term.

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Radiation Rate
The solar energy potential in India is immense due to its convenient location near the
Equator. India receives nearly 3000 hours of sunshine every year, which is equivalent to 5000
trillion kWh of energy. As shown in Exhibit 1, India can generate over 1,900 billion units of
solar power annually, which is enough to service the entire annual power demand even in
2030 (estimates). Rajasthan and Gujarat are the regions with maximum solar energy
potential. This, coupled with the availability of barren land, increases the feasibility of solar
energy systems in these regions. Considering Indias solar potential, the government has
rolled out various policies and subsidy schemes to encourage growth of the Solar Industry,
which is expected to experience exponential growth in the coming years

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With about 300 clear, sunny days in a year, India's theoretically calculated solar
energy incidence on its land area alone, is about 5,000 trillion kilowatt-hours (kWh)
per year (or 5 EWh/yr). The solar energy available in a year exceeds the possible
energy output of all fossil fuel energy reserves in India. The daily average solar
power plant generation capacity over India is 0.25 kWh per m 2 of used land area,
which is equivalent to about 1,5002,000 peak (rated) capacity operating hours in a
year with the available commercially-proven technologies.

7000
6267
6000

5000

4680

4000

3000

2632

capacity in Mv

2319
2000
1205
1000
461
161
0

year

The graph shows the increase in installed capacity of solar projects over a period time. It is
clearly evident from the graph that the solar sector is showing tremendous growth in the
country.
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State wise installed capacity

state wise installed capacity
0.02
0.26
0.75
0.79
4
5
5
5
5.04
5.1
6.71
7.21
12.02
12.8
16
66.92
73.18
104.22
140

200

300.32
378.7
392.39

400

562.94
566
678.58
600

800

1024.15
1000

1264.35
1200
1400

As seen in the graph the state of Rajasthan leads the solar sector with maximum capacity
utilization followed by Gujarat. The major states with maximum installed capacity are Tamil
Nadu, Madhya Pradesh, Andhra Pradesh, Telangana, and Maharashtra.

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SWOT analysis of the Indian solar sector

Strength
Good resource potential
Technological innovations
Emergence
of

Weakness
Absence of conducive policies in
indigenous

some states
Acceptability by end users
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manufacturers
Decentralised energy solutions
Independent Ministry:
Adequate Budgetary support
promoting
technologies:
Existence of

renewable
specialised

Inconvenience
Quality
and
for

energy
technical

institutions:
Technical skills of officials:
Wide mandate:
High potential
Favourable government policies
Demand-supply gap
Employment opportunities
Increasing energy requirements

of

renewable energy as compared to

non-renewable energy
Lack of man power
Staffing:
Inadequate database management,
documentation/ recording system:

Opportunities

consistency

Threats
High

subsidy

on

conventional

energy
Lack of low cost funding
Dependence on other Departments/
Agencies

Strengths
Good resource potential
As stated since the country lies above the equator in tropical region the
radiation is good enough to generate solar power.
Technological innovations
With developments in technology a lot of innovations are being made in
equipment to make them easily accessible.
Emergence of indigenous manufacturers
The growth of solar sector has given rise to a class of indigenous
manufacturers of solar equipment making it cost effective.
Decentralised energy solutions
The decentralisation of solar power i.e. the off grid projects are an impetus to
growth of this sector.
Independent Ministry
The Ministry is the nodal ministry of the GOI at the federal level for all
matters relating to new and renewable energy. It is the only such ministry in the world,
dedicated towards promotion of renewable energy sector. This enables focussed
attention as well as high degree of autonomy in formulation of sector specific plans and
policies.
Adequate Budgetary support for promoting renewable energy technologies

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The growing concern over use of fossil fuels and the potential and prospects
offered by renewable energy sources has been a driving force for allocation of adequate
budgetary support to the Ministry for implementation of its programmes. However, this
support needs to be substantially up-scaled in the coming years.
Existence of specialised technical institutions
The Ministry has three specialized technical institutions functioning under its
control SEC, C-WET and NIRE (being operationalised). These are a definite strength
of the Ministry for coordinating the research, design, development and demonstration
activities in their respective fields. However, they need strengthening, particularly SEC.
Technical skills of officials
The officers of the ministry and its technical institutions are mostly highly
qualified scientists/ engineers, which is a definite asset.
Wide mandate
The Ministrys mandate covers promotion of all forms of new and renewable
energy resources which are aligned to the emerging global energy scenario.

Weakness
Absence of policies in some states
Although the centre has formulated conducive policies, there is lack of
planning and formulating the policies on the behalf of the states. States such as
Rajasthan and Gujarat have been able to attract investments in this sector due to their
attractive policy.
Acceptability by end users
One of the major obstacles for solar sector is its acceptability in the market by
the end users. Solar power is costly in comparison with other sources.
Quality and consistency of renewable energy as compared to non-renewable energy
The quality and consistency of solar power cannot be standardised as its
generation depends on the radiation rate.
Lack of man power
There is an acute of human resource for the development of this sector. We
have human resources in quantity but without quality.
Staffing
It is noted that while the deployment and development activities of the
Ministry have been gradually increasing, the availability of scientific manpower has
been shrinking because of retirements and absence of fresh recruitments in past. This
problem has to be resolved.
Inadequate database management, documentation/ recording system:
These are problem areas and needs to be strengthened. A Resource Centre
needs to be developed and more expertise in finance, economics and evaluation studies
is also required.
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Opportunities
High potential
With the use of conventional energy at peak and high dependency and fossil
fuels, it is the need of the hour to shift to renewable energy.
Favourable government policies
The ministry of new renewable energy is playing an active role in formulating
policies conducive to the growth of solar industry in the country.
Employment opportunities
Development of solar sector will to increase in need of skilled labour thereby
increasing the employment opportunities
Increasing energy requirements
India is a country with high population and there is an increasing demand for
energy which can be met through solar energy.
Demand-supply gap
There is high deficit in the demand and supply of electricity in the country.
Hence it is an opportunity for development of solar sector.

Threats
High subsidy on conventional energy
A high amount of subsidy is provided for energy obtained from conventional
sources which makes them cost effective and results in high cost of renewables as
compared to non-renewables
Lack of low cost funding
The solar equipment require huge funding for purchasing of costly solar
equipment. To fulfil this need the funding is provided at high interest rate.
Dependence on other Departments/ Agencies
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The performance under various programmes is sometimes critically dependent

on other Departments/Organizations. Besides, state units need to be strengthened. State
power authorities do not bother much about renewable energy and generally this is yet
to get importance. This perception both in the centre and the state needs to change.

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Application of solar energy

Power
plants
Remote
applicatio
ns

Solar cars

Homes

Solar
ener
gy

Solar
lighting

Commerci
al use

Ventilatio
n system
Power
pumps

Solar energy can be used in various forms:

1. Power plants: In conventional power plants non-renewable energy sources are used
to boil water and form stream so that turbines can rotate and water to produce
electricity. But with application of solar energy heat of sun can boil that water to
create steam and rotate turbines. To convert sunlight into electricity solar panels,
photoelectric technologies and thermoelectric technologies etc are used.
2. Homes: Use of solar energy is increasing in homes as well. Residential appliances
can easily use electricity generated through solar power. Besides this solar energy is
running solar heater to supply hot water in homes. Through photovoltaic cell installed
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on the roof of the house energy is captured and stored on batteries to use throughout
the day at homes for different purposes. In this ways expenditure on energy is cutting
down by home users.
3. Commercial use: on roofs of different buildings we can find glass PV modules or any
other kind of solar panel. These panels are used there to supply electricity to different
offices or other parts of building in a reliable manner. These panels collect solar
energy from sun, convert it into electricity and allow offices to use their own electrical
power for different purposes.
4. Ventilation system: at many places solar energy is used for ventilation purposes. It
helps in running bath fans, floor fans, and ceiling fans in buildings. Fans run almost
every time in a building to control moisture, and smell and in homes to take heat out
of the kitchen. It can add heavy amount on the utility bills, to cut down these bills
solar energy is used for ventilation purposes.
5. Power pump: solar power not just help in improving ventilation system at your
homes but with that it can also help in circulating water in any building. You can
connect power pump with solar power supply unit but you must run it on DC current
so that water circulate throughout your home.
6. Solar Lighting: these lights are also known as day lighting, and work with help of
solar power. These lights store natural energy of sun in day time and then convert this
energy into electricity to light up in night time. Use of this system is reducing load
form local power plants.
7. Solar Cars: it is an electrical vehicle which is recharged form solar energy or
sunlight. Solar panels are used on this car that absorb light and then convert it into
electrical energy. This electrical energy is stored in batteries used with the car, so that
in night time as well we can drive these vehicles.
8. Remote applications: Remote buildings are taking benefit of solar energy at vast
scale. Remote schools, community halls, and clinics can take solar panel and batteries
with them anywhere to produce and use electric power.

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India
Renewable
Energy
Development
Agency
(IREDA)
Ministry of New
and Renewable
Energy (MNRE)

Solar Energy
Corporation of
india (SECI)

Governme
nt Bodies
For
Promotion
Of Solar
Energy

There are three government bodies established to promote solar energy in India. The
first is the Ministry of New and Renewable Energy (MNRE), which is the nodal unit for all
matters relating to RE. The second, India Renewable Energy Development Agency
(IREDA), is a public limited company established in 1987 to promote, develop and extend
financial assistance for RE and energy efficiency/conservation projects. Finally, Solar
Energy Centre (SEC) is a dedicated unit of the MNRE and the Government for the
development of solar energy technologies and promotion of its applications through
product development. Besides this, government has also rolled out various policies and
subsidies to promote this sector.

Ministry of New And Renewable Energy (MNRE)

Page | 25

Ministry
Renewable

of

New

and

Energy or MNRE is

a ministry of the Government of

India. The ministry is currently
headed by Piyush Goyal, a cabinet
minister.

The

ministry

was

established as the Ministry of

Non-Conventional

Energy

Sources in 1992. It adopted its

current name in October 2006.
The Ministry is mainly responsible for research and development, intellectual
property protection, and international cooperation, promotion, and coordination in renewable
energy sources such as wind power, small hydro, biogas, and solar power. The broad aim of
the ministry is to develop and deploy new and renewable energy for supplementing the
energy requirements of India.
The ministry is headquartered in Lodhi Road, New [Link] to the Ministry's
2012-2013 annual report, India has made significant advances in several renewable energy
sectors which include, solar energy, wind power, and hydroelectricity.
The mission of the Ministry is to bring in Energy Security; Increase the share of clean
power; increase Energy Availability and Access; improve Energy Affordability; and maximise
Energy Equity.

Major functional area or Allocation of Business of MNRE

Commission for Additional Sources of Energy (CASE);
Indian Renewable Energy Development Agency (IREDA);
Integrated Rural Energy Programme (IREP);
Research and development of Biogas and programmes relating to Biogas units;

Page | 26

Solar Energy including Solar Photovoltaic devices and their development, production
and applications;
Programme relating to improved chulhas and research and development thereof;
All matters relating to small/mini/micro hydel projects of and below 25 MW capacities;
Research and development of other non-conventional/renewable sources of energy and
programmes relating thereto;
Tidal energy
Geothermal Energy
Biofuel:

Initiatives
1. Jawaharlal Nehru National Solar Mission (JNNSM) - The objective of the 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.
2. National Biogas and Manure Management Programme (NBMMP)
3. Solar Lantern Programme LALA
4. Solar thermal energyDemonstration Programme
5. Remote Village Lighting Programme
6. National Biomass Cookstoves Initiative (NBCI)
7. National Offshore Wind Energy Authority

Page | 27

Indian Renewable Energy Development Agency Limited

(IREDA)
Indian

Renewable

Energy

Development Agency Limited (IREDA) is a

Mini Ratna (Category I) Government of
India Enterprise under the administrative
control of Ministry of New and Renewable
Energy (MNRE). IREDA is a Public Limited
Government Company established as a NonBanking

Financial

engaged

in

Institution

promoting,

in

1987

developing

and

extending financial assistance for setting up

projects relating to new and renewable
sources

of

energy

efficiency/conservation

and
with

the

energy
motto:

ENERGY FOR EVER

IREDA has been notified as a Public Financial Institution under section 4 A of the
Companies Act, 1956 and registered as Non-Banking Financial Company (NFBC) with
Reserve Bank of India (RBI).

Page | 28

IREDAs mission is Be a pioneering, participant friendly and competitive institution

for financing and promoting self-sustaining investment in energy generation from Renewable
Sources, Energy Efficiency and Environmental Technologies for sustainable development.
IREDAs Motto is Energy for Ever.
The main objectives of IREDA are :
To give financial support to specific projects and schemes for generating electricity
and / or energy through new and renewable sources and conserving energy through
energy efficiency.
To maintain its position as a leading organization to provide efficient and effective
financing in renewable energy and energy efficiency / conservation projects.
To increase IREDA`s share in the renewable energy sector by way of innovative
financing.
Improvement in the efficiency of services provided to customers through continual
improvement of systems, processes and resources.
To strive to be competitive institution through customer satisfaction.

QUALITY POLICY
IREDA is committed to maintain its position as a leading organization to provide innovative
financing in Renewable Energy & Energy Efficiency/Conservation and Environmental
Technologies through efficient systems & processes for providing total satisfaction and
transparency to its customers.
IREDA shall strive for continual improvement in the quality of services to its customers
through effective quality management system.

QUALITY OBJECTIVES
Drive towards total customer satisfaction.
Page | 29

Continual up gradation of capability and improvement in the professional skills of

employees.
Improvement in efficiency of services provided to customers.
Continual improvement of systems, process and services.

Solar Energy Corporation of India Ltd. (SECI)

Solar Energy Corporation of India

Ltd.

(SECI)

is

CPSU

under

the

administrative control of the Ministry of

New and Renewable Energy (MNRE), set up
on 20th Sept, 2011 to facilitate the
implementation of JNNSM and achievement
of targets set therein. It is the only CPSU
dedicated to the solar energy sector. It was
originally incorporated as a section-25 (not
for-profit) company under the Companies
Act, 1956.
However, through a Government of India decision, the company has recently been
converted into a Section-3 company under the Companies Act, 2013. The mandate of the
company has also been broadened to cover the entire renewable energy domain.
Page | 30

In the present outlook of the RE sector, especially solar energy, SECI has a major role
to play in the sectors development. The company is responsible for implementation of a
number of schemes of MNRE, major ones being the VGF schemes for large-scale gridconnected projects under JNNSM, solar park scheme and grid-connected solar rooftop
scheme, alongwith a host of other specialised schemes such as defence scheme, canal-top
scheme, Indo-Pak border scheme etc. In addition, SECI has ventured into solar project
development on turnkey basis for several PSUs. The company also has a power-trading
license and is active in this domain through trading of solar power from projects set up under
the schemes being implemented by it.

Vision
To build Green India through harnessing abundant solar radiation and to achieve energy
security for the country.

Mission
To become the leader in development of large scale solar installations, solar plants
and solar parks and to promote and commercialize the use of solar energy to reach
remotest corner of India.
To become leader in exploring new technologies and their deployment to harness
solar energy.

Page | 31

TARGETS AND GOALS FOR 2011-17

For next 5 years (2011-16), which is the focus of the present Strategic Plan, an
attempt has been made to quantify the aspirations in terms of SMART (Specific, Measurable,
Achievable, Realistic, Time-bound) targets for different renewable resources/ application
areas, as detailed in next section. Targets for an additional year 2016-17 have been included
so that the exercise becomes co-terminus with the 12 thfive-year plan period of 2012-17. This
reflects the short-term vision of the Ministry.
As would be evident from the status of current energy scenario in the country, Each of
the targets, and the totality, is fully commensurate with national and sectorial priorities.
Prime Minister Narendra Modi has not only articulated this mantra but has also redefined
Indias renewable energy ambitions and goals.
Thanks to his push for solar power, the power ministry has dramatically scaled up our
national solar power target of 100 GW by 2022. Indias current installed solar capacity is 3
GW, which means 10 GW of new capacity has to be added each year. This is in addition to
the rooftop solar target of 40 GW. The PM has described this shift in the mindset as Indias
quantum leap from Megawatt to Gigawatt.
The real challenge lies in the effective execution of the plan. However, we have done
quick capacity addition before: India has added more capacity in conventional energy over
140 GW in the last 10 years than it did in the 55 years between 1947 and 2003. Over a
Page | 32

third of this capacity was created by the private sector. The same can be done in the solar
power sector. There are global success stories to learn from and improve upon: China, for
instance, added nearly 13 GW solar capacity in 2013. Similarly, Germany, Italy and Japan
have added substantial solar capacity of 7 GW each per year.
The best international developers can install a 100 MW plant in about 90 days, which
means 1 MW per day. In India, more than 40 developers have shown a keen interest in being
a part of the PMs renewable energy dream. Even if 25 of these developers build
simultaneously on 25 sites in the top five states with solar potential Rajasthan, Jammu and
Kashmir, Maharashtra, Madhya Pradesh and Andhra Pradesh at 1 MW per day, we will
have more than our desired objective of 10,000 MW per year.

Central Government Policies and incentives to Solar Power Sector

Page | 33

Jawaharlal Nehru National Solar Mission (JNNSM)

The Jawaharlal Nehru National Solar Mission (also known as the National
Solar Mission) is a major initiative of the Government of India and State
Governments to promote ecologically sustainable growth while addressing
Indias energy security challenges. It will also constitute a major contribution by India to
the global effort to meet the challenges of climate change. Named after Jawaharlal Nehru, the
Mission is one of the several initiatives that are part of National Action Plan on Climate
Change. The program was inaugurated by Former Prime Minister of India, Dr. Manmohan
Singh on 11 January 2010 with a target of 20GW by 2022 which was later increased to 100
GW in 2015 Union budget of India. United States filed a case with WTO against India for
restricting the critical materials used to domestic content.

Goals
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. The immediate aim of the Mission is to focus on setting up an enabling environment
for solar technology penetration in the country both at a centralized and decentralized level.
The first phase (up to 2013) will focus on capturing of the low hanging options in solar
thermal; on promoting off-grid systems to serve populations without access to commercial
energy and modest capacity addition in grid-based systems. In the second phase, after taking
into account the experience of the initial years, capacity will be aggressively ramped up to
create conditions for up scaled and competitive solar energy penetration in the country.
Page | 34

Timeline
The Mission under the aegis of Ministry of New and Renewable Energy will adopt a 3phase approach, spanning the remaining period of the 11th Plan and first year of the 12th Plan
(up to 2012-13) as Phase 1, the remaining 4 years of the 12th Plan (201317) as Phase 2 and
the 13th Plan (201722) as Phase 3. At the end of each plan, and mid-term during the 12th and
13th Plans, there will be an evaluation of progress, review of capacity and targets for subsequent
phases, based on emerging cost and technology trends, both domestic and global. The aim
would be to protect Government from subsidy exposure in case expected cost reduction does not
materialize or is more rapid than expected.

Page | 35

Year wise target

To meet the scaled up target of 100,000 MW, MNRE has proposed to achieve it through
40,000 MW through Rooftop Solar Projects and 60,000 MW through Large and Medium Scale
solar projects.

Year-wise Targets (in MW)

Category

2015-

2016-

2017-

2018-

2019-

2020-

2021-

16

17

18

19

20

21

22

Total

Page | 36

Rooftop Solar

200

4,800

5,000

6,000

7,000

8,000

9,000

40,000

1,800

7,200

10,000

10,000

10,000

9,500

8,500

57,000

2,000

12,000

15,000

16,000

17,000

17,500

17,500

97,000

Project
Ground Mounted
Solar Project
Total

Policy Progress of JNNSM

After growing at a disappointing rate of less than 1 GW per year during the
last two years, Indias solar sector is staring at the possibility of growing
exponentially, or more specifically, reach 100 GW installed capacity in the next five
years (till 2019). The new government, led by Prime Minister Narendra Modi, is
drafting the plan to achieve the 100 GW capacity. As a first step, the Ministry for New
and Renewable Energy (MNRE) has already released the draft guidelines for
achieving a capacity of 20 GW through Solar Parks in various states across the
country.
Status of Phase 1 of the JNNSM
Page | 37

The Phase 1 of the Mission was implemented in 2 batches. In the first batch,
150 MW of PV (30 projects of 5 MW capacity each) and 470 MW (7 projects of
varying capacities) of Solar Thermal (CSP) projects were selected through a tariff
based reverse bidding process. The tariff range for the selected solar PV projects
was Rs. 10.95/kWh-Rs.12.76/kWh. For the CSP projects, the range was Rs.
10.49/kWh-Rs. 12.24/kWh. The average tariffs were Rs. 12.12/kWh for PV and Rs.
11.48/kWh for CSP projects.
Apart from this, 98.5 MW (78 projects) were allotted under the Rooftop PV and Small
Solar Power Generation Programme (RPSSGP) and another 84 MW (PV-54 MW
and CSP-30 MW) were selected under migration scheme.
In the second batch, 350 MW of solar PV projects were selected based on the
reverse bidding process, and the tariff range was Rs. 7.49/kWh-Rs.9.44/kWh, with
the average tariff being Rs. 8.77/kWh.
During the Phase 1 of the JNNSM, there was a Domestic Content Requirement
(DCR) for Crystalline Silicon Modules, which mandated the use of Indian made
modules for the Batch 1 SPV projects, and both cells and modules for the Batch 2
projects. All projects using Thin Film technology based PV modules were exempted
from the DCR.
According to the MNRE, a total capacity of 568 MW has been commissioned so far
under Phase-1, excluding the projects under RPSSGP.
Status of Phase 2 of the JNNSM
The Phase 2 of the JNNSM spans a period of 5 years (2013-17), and the
original target for this Phase was 9,000 MW. This phase is also being implemented
in batches, and the allocation of 750 MW of projects under Batch 1 of this Phase was
completed in March 2014. The projects will be supported through a Viability Gap
Funding (VGF) mechanism, with the funds coming from the National Clean Energy
Fund (NCEF). Under the VGF mechanism, power would be purchased from
developers at a fixed tariff of Rs.5.45/ unit (Rs.4.95/unit in case benefit of
Accelerated Depreciation is availed) and VGF will be paid to the developers as per
their bids, up to a maximum of Rs.2.5 crore/MW).
Page | 38

In this batch, 50% of the total available capacity of 750 MW was reserved for
projects using Indian made modules and the remaining 375 MW projects did not
have the DCR. Power Purchase Agreements (PPAs) with the successful bidders
were signed in March 2014, and the projects have 13 months from the date of
signing of the PPA to commission the projects.
Batch 2 of Phase 2
MNRE has proposed to add 15 GW of Solar PV Capacity during the Phase 2
of the Mission in 3 tranches till 2019. The planned allocation under the 3 tranches is
3 GW during 2014-2017, 5 GW during 2015-2018 and 7 GW during 2016-2019.
Many of these projects will be allocated in solar parks in various states highlighted at
the beginning of the article.
The way forward
As mentioned earlier, the government is proposing to drastically increase the
solar installation targets to 100 GW by 2019. This target is very ambitious
considering the fact that today, the total solar installed capacity in the country is just
2,765 MW (as of September, 30 2014). In order to achieve the ambitious goal, it is
hoped that the government will work together with the stakeholders in overcoming all
technical, manufacturing capacity, infrastructural, policy and financial challenges.

Some of the specific initiatives for involving certain key stakeholders of

the Ministry have been highlighted below.

Page | 39

Research &
Developme
nt (R&D)/

State Nodal
Agencies

Specific
Initiatives

Technical
institutions
and
technology
providers

State
Governmen
ts

Research & Development (R&D)/ technical institutions and

technology providers
The Ministry has been supporting R&D for technology and
manpower development in renewable energy. The current emphasis is
on reduction in cost and increase in efficiency. For sustained
development of this sector, efforts are being made so that renewable
energy is driven to a large extent by the market and the consumer.
With a view to achieving this goal, the Ministry has evolved a policy of
supporting R&D with close involvement of the industrial sector. This
will bring about increased interaction and close co-operation between
the research and teaching institutions of the country - which are
reservoirs of knowledge and experience, and the Indian industry
which has the requisite entrepreneurship and market-orientation. The
broad spectrum of new and renewable technologies provides a great
Page | 40

opportunity for innovation. Ministry is also developing Centres of

Excellence.
State Governments
There are several issues that require proactive action by
States. Many States have not announced clear-cut / conducive policies to
encourage private sector involvement in different renewable energy
projects. It is noted that due importance is not being given to renewable
energy in many States and adequate budget provisions are not
available. In many States the process for allotment of sites and statutory
clearances,

including

land

acquisition,

forest

clearance,

irrigation

clearance etc is extremely time consuming. There are also inadequate

power evacuation and transmission facility especially for Wind power
projects, matching with the development of the sector in the State. The
Ministry

will

ensure

regular

interaction

with

concerned

State

Departments, Regulatory Authorities and Agencies to periodically

address issues relating to State policy & regulatory issues including
appropriate enforcement of RPO regulations, statutory clearances, land
acquisition, power evacuation & transmission, for sector specific
renewable power projects. 49 The Ministry will also work closely with
State Governments for working out and introducing innovative business
models for promotion of renewable energy at the state level to move
towards increasingly a market oriented mechanism.
State Nodal Agencies
Since the actual

implementation

of

the

Ministrys

programmes is through the State Nodal Agencies it is of vital

importance that these agencies are adequately strengthened in terms
of manpower and skill set. There is need to encourage states to
strengthen the administrative set-up and get local self-government
institutions like Municipalities and Panchayats involved in planning
and implementation process. The need to gear up the SNAs for
playing a much more proactive role for promotion of renewable
energy in their respective States in tune with the Ministrys strategy
for growth of the sector cannot be undermined. Prima-facie it is felt
Page | 41

that SNAs require strengthening, especially in the area of capacity

building and availability of technical manpower for which the GOI
should step up its budgetary support.
Other Ministries of Government of India: Key to the successful
implementation of the Ministrys plans is effective co-ordination with
the other functional ministries. The main ones among these are:
1. Ministry of Power: With grid integration of renewable and their
mainstreaming, close operations of the MoP and MNRE on
renewable energy technologies is essential. This has been
successfully undertaken for the JNNSM guidelines, and will need to
be continued on an ongoing basis; Development of transmission
systems for renewable energy is also required. Utilities would need
to fulfill renewable energy purchase obligations.
2. Ministry of Petroleum and Natural Gas: Interaction is necessary for
biofuel blending as well as initiatives like Solar-Gas hybrids as also
future pricing strategies of fossil fuels including lesser subsidies for
diesel, kerosene and cooking gas.
3. Ministry of Finance: Ministry has been interacting frequently with
the Ministry of Finance on matters related to subsidies, fiscal
incentives and the like. With the National Clean Energy Fund in
place, and being 50 intended for deployment of clean and
renewable energy technologies, it will be important for the Ministry
to interact closely and act in concert with the Ministry of Finance to
get more resources as well as help in creation of financial
instruments which will reduce costs of RE projects, particularly
solar. Capabilities of IREDA also need to be strengthened.
4. Ministry of Environment & Forests for facilitating dedicated energy
plantations, use of pine needles, etc so that an important new area
for biomass power can be opened up. o Ministry of Urban
Development:

to

promote

regulations

which,

would

make

mandatory installation of solar water heaters and construction of

energy efficient buildings
5. Ministry of Education, Department of Women & Child Development
and Ministry of Tribal Affairs can utilize efficient cook stoves
Page | 42

6. Other

Ministries

which

can

facilitate

large-scale

off-grid

applications such as solar water heating, solar cooking, solar street

lighting, solar airconditioning, kitchen waste processing, green
buildings and campuses in their establishments (Defence, Home
,Railways, HRD- big institutions, schools, health- medical colleges,
hospitals, nursing homes, tourismhotels, resorts), etc.

State Wise Policies and Incentives to Solar Power Sector

Page | 43

Maharashtra
Eligible producer
Land allotment
1. Land acquired for solar projects will be granted
deemed status of Non-agricultural land.

Page | 44

2. Solar projects having capacity up to 2 MW can be

given land 4 hectors as per availability and 50 %
discount shall be given on rental/ lease charges. All
such

transactions

will

be

governed

as

per

requires

for

Maharashtra land acquisition act.

Operative period
Sale of power and tariffs
Wheeling
Banking
Power evacuation and
grid interference
Incentives
1. Government

land

if

available

manufacturing of solar modules/panels/etc. shall

also be given 50 % discount on lease/rental
charges.
2. Concessions shall be granted for these projects to
get NOC from pollution control board.
3. Solar

project

generated

from

developers
solar

can

projects

sell
to

electricity
distribution

companies /captive use/third-party sale/ REC.

4. Open Access shall be granted for interstate as well
as intrastate projects as per MERC regulations
5. Exemption from Supervision charges for evacuation.
6. Projects can register themselves as industrial units.
7. Exemption from E-duty for captive power plants for
10 years from the date of commissioning.
Page | 45

8. Developers will be given the necessary support for

development solar projects, but there will separate
provisions for interstate power transfer.

..

Page | 46

Tamil Nadu
Eligible producer
Land allotment
Operative period
Sale of power and tariffs
Wheeling
Banking

The wheeling and banking charges for captive use/third party

sale within the State will be as per the orders of the Tamil
Nadu Electricity Regulatory Commission.

Power evacuation and

grid interference
Incentives

Appropriate tax incentives as per the Tamil Nadu

Industrial Policy.
A solar manufacturing ecosystem will be created that
include solar research centres, test facilities, resource
assessment facilities, educational institutions, training
centres, etc.
Exemption from payment of electricity tax to the extent
of 100% on electricity generated from Solar power
projects used for self-consumption/sale to utility will be
allowed for 5 years.
Exemption from demand cut to the extent of 100% of
the installed capacity assigned for captive use purpose
will be allowed.

Karnataka
Eligible producer

Grid

connect

utility

projects:Any

individual/

firm/society /institution /registered company including

public utilities
Grid connect rooftop projects: All individual residential /
Page | 47

commercial/ institutional/ government building owners,

industrial units
Off grid :Any individual
Land allotment
Operative period

The policy will come into effect from 2014 and shall remain in
force until 2021 or till time any changes are made by the state
government.

Sale of power and tariffs

Wheeling
Charges will be applicable as determined by KERC from time
Banking
to time
Power evacuation and
grid interference
Incentives

1. Tax concessions such as entry tax stamp duty registration

charges shall be as per Karnataka industrial policy
2. Various concessions allowed by MNRE viz central excise
duty and custom duty to be allowed.

Rajasthan
Eligible producer
Land allotment

The government land would be allotted to a solar park

developer or project developer as per the provisions of
Rajasthan land revenue rules 2007. The setting up f solar

Operative period

projects on private land will also be promoted.

The policy has come in effect from 8t October 2014 and shall
be applicable until new policy is formed.

Sale of power and tariffs

Wheeling
Banking
Banking will be allowed as per RERC regulations and orders
Power evacuation and The transmission and distribution companies will have to ensure
grid interference

availability of power evacuation network.

Page | 48

The solar power producer will have to pay the grid connectivity
Incentives

charges as finalized by RERC.

1. Incentives as per Rajasthan industrial policy
2. Availability of water for power generation
3. Clearance from Rajasthan state pollution control board
4. Projects of capacities more than 500 MV will be directly
placed before the state level empowered committee for
consideration.
5. Such projects will be eligible for benefits/concessions
available under rajasthan investment promotion scheme.

Andhra Pradesh
Eligible producer

All registered companies, Government entities, partnership

companies/

Land allotment

firms,

individuals

and

all

consumers

of

APDiscom(s)
Project developer to acquire the land required for the project.
However, in case of land owned by Revenue Department, the
land allotment shall be done as per the prevailing government

Operative period

policy.
Applicable for a period of five (5) years and/ or shall remain in
force till such time a new policy is issued.
Solar Power Projects (SPP) that are commissioned during the
operative period shall be eligible for the incentives declared
under this policy, for a period of ten(10) years from the date of
commissioning - unless otherwise the period is specifically

mentioned for any incentive.

Sale of power and tariffs
Wheeling
Transmission and Distribution charges shall be exempted for
Page | 49

wheeling of power generated from Solar Power Projects for

Banking

only captive use/third party sale within the State.

Banking of 100% of energy shall be permitted for all Captive
and Open Access/ Scheduled Consumers during all 12 months
of the year. Banking charges shall be adjusted in kind @ 2% of
the energy delivered at the point of drawal. The banking year
shall be from April to March.

Power evacuation and The power generated from a Solar Power Project shall be
grid interference

injected at an appropriate voltage at the sub-station and/or

interconnection point of the APTransco / Discom(s). The
Eligible Developer shall bear the entire cost of construction of
power evacuation facilities from the project upto the
interconnection point and/or upto APTransco / Discom(s)
substation.
Power Projects will be exempted from paying the Supervision
charges

to

APTransco/Discom(s)

towards

the

internal

evacuation infrastructure within the project site and upto

Incentives

interconnection point.
1. Electricity duty shall be exempted for captive consumption,
sale to Discom(s) and third party sale provided the source of
power is from Solar Power Projects setup within the State.
2. Cross subsidy surcharge shall be exempted for third party
sale provided the source of power is from Solar Power
Projects setup within the State for a period of five (5) years
from the date of commissioning of the SPP
3. Distribution losses shall be exempted only for Solar Power
Projects injecting at 33 kV or below irrespective of voltagelevel of the delivery point within the Discom
4. Generation of electricity from Solar Power Projects shall be
treated as eligible industry under the schemes administered
by the Industries Department and incentives available to
industrial units under such schemes shall be available to the
solar power producers.
5. Deemed PPP status shall be provided for projects coming up
Page | 50

under category (A) as per para (3) of this policy.

6. Deemed Non-Agricultural (NA) status for the land where
Solar Power Projects will be accorded, on payment of
applicable statutory fees.
7. Solar PV power projects will be exempted from
obtaining

any NOC/Consent for establishment under

pollution control laws from AP Pollution Control Board.

Gujarat
Eligible producer

Any company or body corporate or association or body of

individuals, whether incorporated or not, or artificial juridical

Land allotment

person shall be eligible for setting up of SPGs

The Solar Project Developer shall be responsible for
obtaining the land for setting up and operating solar
power project.

Operative period
Sale of power and tariffs
Wheeling
For residential and government under net metering projects
and for industrial and commercial under net metering wheeling
charges are not applicable.
For other it is charged as applicable under OA regulation.
Banking
Power evacuation and Grid Connectivity
grid interference

The respective evacuation facility shall be initially

approved by CTU/ STU/ DisCom depending on injection
level after carrying out system studies.
For startup, standby and auxiliary power requirement,
the same shall be governed by GERC regulations and
orders.
No parallel operation charges shall be applicable to the
Page | 51

SPG.
Connectivity charges to be paid to DisCom shall be INR
5,000/ per project for capacities less than 100 kW. For
capacities of 100 kW and above, normal connectivity
charges shall be applicable.
Evacuation Facilities
Within Solar Park
Developer of Solar Project/ Solar Park shall establish dedicated
line for evacuation of power up to STU/ CTU sub station and
install RTUs etc. at their own cost. SPG shall be integrated to
the grid by installing RTUs to enable real time monitoring of the
injection of power by SLDC.
Outside Solar Park
To optimize costs, Common dedicated transmission line shall be
encouraged for cluster of adjoining Developers with appropriate
metering at their respective end of project as well as a common
meter for such SPGs at the receiving end at CTU Interface/
STU substation/ 11 kV system of DisCom. Energy injection by
each SPG at the receiving end shall be worked out on the basis
of meter reading of common meter appropriately apportioned as
per the respective meter reading at the sending end meter of that
Incentives

SPG by SLDC.
1. The Government of Gujarat has launched the Gujarat
Industrial Policy 2015 and envisions to boost the
renewable sector through its provisions. This policy
promotes the Make in India campaign and provides for
subsidy

benefits,

simplification

of

procedures,

strengthening single window system, etc.

2. The Government of Gujarat has also launched the
Electronics Policy for the State of Gujarat (201419)
which supports facilitation for setting up semiconductor
wafer facilities. It also extends benefits for solar cell
manufacturing, solar modules and panel manufacturing,
solar lanterns/ lamps manufacturing and all the systems
and devices that come under the purview of solar
Page | 52

technology.
3. The Government of India has launched the Modified
Special Incentive Package Scheme (MSIPS) to provide
incentives and attract investments in electronic systems
design and manufacturing industries. These industries
include manufacturing of polysilicon, ingots and wafers,
crystalline/ polycrystalline cells and modules, thinfilm
modules, transformers and allied electronics.

Madhya Pradesh
Eligible producer

All Solar energy based power project Developers (Solar

PV/Solar thermal) and manufacturing units of equipments,
ancillaries related to Solar Power projects shall be eligible for
benefits under the Policy.
Only new plant and machinery shall be eligible for installation
under the Policy.

Land allotment

For setting up Solar Power Plant in Madhya Pradesh,maximum

land use permission for government land, if available, to the
Solar Power Producer shall be 3.0 Hectares per MW.
In case of land owned by RevenueDepartment or any other
State Government Department, the New & Renewable Energy
Department shall take possession of the land and subsequently

Operative period

give permission for use of land to the concerned Developer

This Policy shall become operative from the date of its

notification in the Madhya Pradesh State Gazette.

Sale of power and tariffs Category I Projects: For the projects allotted under tariff based
competitivebidding route for sale to MP Discoms/ MP Power
Management Co Ltd., the Power Purchase Agreement will be
executed between MP Discoms / MP Power Management Co.
Ltd and successful bidders as per the provisions of
bid/qualification document on the tariff arrived by the process
of tariff-based bidding. However the rates shall not be more
than the rates specified by theMPERC.
Page | 53

Category II Projects:In case of third party sale/captive use/sale

to other states,the Power Purchase Agreement will be executed
between the Power Producer and the Procurer on mutually
agreed rates.
Category III Projects: In case of solar power projects
established under RECmechanism, the Power Purchase
Agreement as required, will be executed between solar power
producers and the Procurer as per the Regulations/Orders of
CERC and/or MPERC issued from time to time in this regard.
Category IV Projects:For projects under JNNSM, the Power
PurchaseAgreement will be executed between the solar power
producer and the Procurer (NVVN and/or MP Discoms/ MP
Wheeling

Power Management Co Ltd.) as per Guidelines under JNNSM.

Facility of wheeling will be available to all solar powerprojects
through MPPTCL/ MP Discoms, as case may be, as per
wheeling charges specified by MPERC. For above wheeling
charges, GoMP will provide a grant of four percent (4%) in
terms of energy injected and the balance, if any, shall be borne
by the project developer.

Banking

Banking of 100% of energy in every financial year shall be

permitted subject to the following conditions
The figures of banked energy during the Financial Year shall be
subject to verification by the officials of the concerned State
Distribution Company/ State Power Trading Company. The
Developer will be required to pay two percent (2%) of the
banked energy towards banking charges to the concerned State
Distribution Company/ State Power Trading Company.
The return of banked energy shall be based on Regulations
issued by MPERC from time to time.
The balance energy, if any, at the end of a Financial Year after
return of banked energy shall be purchased by the concerned
Page | 54

State Distribution Company/ State Power Trading Company in

accordance with the rules/ directions of MPERC.
Power evacuation and The developer shall be responsible for laying of power
grid interference

evacuation line from generating station to the nearest substation

or interconnection point. Any dispensation in this regard that
may be made by the MPERC shall be final.
The Developer shall be responsible for payment of all wheeling
and

transmission

charges

to

the

MPPTCL/respective

Distribution Company in case of sale of power to Third Party

Consumers/ Distribution Licensee/ Power Management Co. Ltd
utilizing their network the payment shall be subject to the
regulations of MPERC.
Incentives

1. In case the Developerpurchases private land for the

project, then they will be eligible for an exemption of
50% on stamp duty.
2. All Solar power projects (includingcaptive units) will be
eligible for exemption from payment of electricity duty
and cess for a period of 10 years from the date of
commissioning of the project.
3. The Solar projects implemented under this Solar Policy
willhave the status of industry and will be eligible for all
benefits

under

Industrial

Promotion

Policy

(or

subsequent amendments from time to time). In case of

any inconsistency between the Madhya Pradesh
Industrial Promotion Policy and Solar policy, the
provisions under the new Solar Policy shall prevail.
4. The equipments purchased for installation ofSolar power
plants under the policy shall be exempted from VAT and
entry tax.
5. CDM benefits

to

the

solar

power

project

Developers/Investorsshall be as per the provisions

specified by MPERC.

Page | 55

RENEWABLE ENERGY CIRTIFICATES:

The energy which is produced from the sources that are naturally
replenished like sun, wind, bio gas and biomass among other sources, is called
Renewable energy. The Renewable Energy Certificate is a trading market
instrument which validates that the holder of the certificate has generated
certain amount of electricity from the renewable source. One Renewable
certificate is equivalent to 1 MWhr of electricity produced from the renewable
energy. The generator receives the REC once s/he has fed the electricity into the
grid.
Actually, the cost of electricity produced from the renewable energy
source is divided into two components:

The component of electricity which is equivalent to the cost of electricity

produced from the conventional source

The environmental attribute (The REC is associated with the second

component that is the environmental attribute)

Page | 56

Cost of
electricity
from the
conventional
source

Cost of
electricity
produced
from the
renewable
energy

The
environment
al attribute

The main motive of REC is to promote the use of renewable energy and support
the Renewable Purchase Obligations (RPO)

What is RPO?
The Renewable Repurchase Obligation (RPO) is the minimum percentage
of the total electricity that the power distribution companies either purchase
from renewable energy sources or purchase equivalent RECs. The RPO
percentage for the states is determined by State Electricity Regulatory
Commission in consensus with Central Electricity Regulatory Commission.
Why REC Mechanism is needed?
India, because of its large geographical area and diverse climate, the
renewable energy potential is not uniformly distributed. Some of its states have
high potential for the renewable energy while others have less. This nonuniformity results in uneven unit cost of production of electricity from
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renewable source. The states which are rich in renewable source like the state
Rajasthan is having abundance of solar energy, have lower cost of production
while lesser renewable energy rich state will be having higher cost of production.
Also, the unit cost of production of electricity is higher than from the
conventional sources. Therefore, in order to address this mismatch and to
motivate the RE generators, the REC mechanism is introduced which one hand
promotes & facilitates the generation of electricity in the states having higher
potential for renewable energy and on the other hand encourages the
distribution companies to fulfill their obligations by purchasing RECs from the RE
generators.
The revenue for the RE generator under REC scheme is as follows:

Income of RE generator from the sale of the electricity component

through feeding into the grid

Income from the sale of the environmental component, REC, through

power exchanges like IEXand PXIL

Salient Features of the REC Framework

There will be a central level agency to be designated by the Central

Commission for registration of RE generators participating in the scheme.

The RE generators will have two options - either to sell the renewable energy
at preferential tariff fixed by the concerned Electricity Regulatory Commission
or to sell the electricity generation and environmental attributes associated
with RE generation separately.

On choosing the second option, the environmental attributes can be

exchanged in the form of REC. Price of electricity component would be
equivalent to weighted average power purchase cost of the distribution

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company including short-term power purchase but excluding renewable power

purchase cost.

The Central Agency will issue the REC to RE generators.

The value of REC will be equivalent to 1 MWh of electricity injected into the
grid from renewable energy sources.

The REC will be exchanged only in the Power Exchanges approved by CERC
within the band of a floor price and a forbearance (ceiling) price to be
determined by CERC from time to time.

The distribution companies, Open Access consumer, Captive Power Plants

(CPPs) will have option of purchasing the REC to meet their Renewable
Purchase Obligations (RPO). Pertinently, RPO is the obligation mandated by
the State Electricity Regulatory Commission (SERC) under the Act, to
purchase minimum level of renewable energy out of the total consumption in
the area of a distribution licensee.

There will also be compliance auditors to ensure compliance of the

requirement of the REC by the participants of the scheme.

Eligibility
The RE generators using only grid connected RE technology (so that the
electricity can be fed into the grid), which is approved under MNRE, are eligible
under this mechanism. The REC once issued remains valid for Seven Hundred
and Thirty Days from the date of issuance.
In order to participate in the REC mechanism, the eligible RE generators have to
get the accreditation with the state agency and must be registered with the
central agency. The RE generators already having PPA on the preferential tarif
are not eligible to participate in the mechanism.

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Types of RECs:

Solar REC: The solar RECs are issued to the generators who produce
electricity from the solar energy

Non-Solar REC: It is issued to those generators who produce electricity

from renewable energy other than solar energy

The Trading and Pricing of RECs

The RECs can be traded as a commodity in the open market through two power
exchanges like IEX and PXIL. The RECs are traded within Minimum price (Floor
Price) and the Maximum price (Forbearance Price) which is determined and set
by the Central Electricity Regulatory Commission (CERC).
The Floor Price and the Forbearance Price determined by CERC which is valid up
to FY 2016-17 are as follows:

Particulars
Floor Price
Forbearance
Price

Non-solar

Solar

REC(Rs./MWhr)

(Rs./MWhr)

1500

9300

3300

13400

REC

Conclusion
The Renewable energy certificates are traded to promote the use of renewable
sources and to accelerate & fulfil the process of RPO obligations of power
distribution companies. The REC mechanism motivates the setting up of RE
power generation facilities in areas having higher potential of renewable sources
and creating equivalent RECs which can be traded in the open market and can
be bought by the distribution companies to fulfil their Renewable Purchase
obligations.
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The wide participation in REC market is the key to cost reduction in Renewable
Energy projects and growth of renewable energy market in India.

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Generation Based Incentives (GBI)

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Top 10 solar companies in india 2016

Tata BP Solar India Ltd
Tata BP Solar India Ltd is a well known solar energy and products manufacturing company
that was started in 1989. company has head office in Bangalore and has talented pool of
professionals that has in-depth knowledge of product development, Company is ISO 9001
and ISO 14001 certified company that has 9 regional offices and 4 manufacturing units. All
the manufacturing units are equipped with world class facilities and use innovative
technology in product development.
Corporate office Bangalore, Karnataka
Establishment 1989
Business Solar Energy and Solar Products
Website [Link]

Bharat Heavy Electricals Ltd

Bharat Heavy Electricals Ltd- Electronics Division is a prominent solar product
manufacturing company that started in 1964 and has head office in Bangalore. Company has
research and development unit that works on innovative technology and new cost effective
products methodology.
Corporate office Bangalore, Karnataka
Establishment 1964
Business Electrical & Electronics
Website [Link]

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Bharat Electronics Ltd

Bharat Electronics Ltd is a Bangalore based solar and electronic products manufacturing
company that was started in 1954. Company is owned and managed by Government of India
and awarded with Navratna status from Government of India.
Corporate office Bangalore, Karnataka
Establishment 1954
Business Electronics and Solar Energy
Website [Link]

Microsol Power P Ltd

Microsol Power P Ltd has head office in Hyderabad and established in 2000. it
manufactures solar module and cells producer.
Corporate office Hyderabad, Andhra Pradesh
Establishment 2000
Business Solar Energy
Website [Link]

Central Electronics Ltd

Central Electronics Ltd is another prominent Solar Energy and solar panels manufacturing
company that was started in 1974. It manufactures high quality Solar-Photovoltaic (SPV)
Cells, Modules and sells products in Indian and global market.
Corporate office New Delhi
Establishment 1974
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Business Solar Energy and solar panels

Website [Link]

NEPC India Ltd

NEPC India Ltd is a Chennai based company that was started in 1984. Company is ISO
9002 certified company and manufactures solar systems for flat roof, ground mount.
Corporate office Chennai, Tamil Nadu
Establishment 1984
Website [Link]

Kotak Urja
Kotak Urja is a Bangalore based company that was started in 1997. Company is counted
among top 10 solar panel manufacturers in India and has excellent team of professional that
works for the success of the company.
Corporate office Bangalore, Karnataka
Establishment 1997
Website [Link]

Ammini
Ammini is a solar products manufacturing company that has head office in Kerala. It was
started in 1993 and is a leading producer of solar products. Company has huge product range
that includes Solar PV Module Outdoor Lighting- Solar, Indoor Lighting- Solar, Indoor
Lighting- Mains, Outdoor Lighting- Mains, BOS for Solar PV Systems, Solar Power
Products. The solar product manufacturing unit of company started in 2002 and within 10
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years has achieved good market share of solar products. To start career in solar product
manufacturing company Ammini is one the best company to work with.
Corporate office Trivandrum, Kerala
Establishment 1993
Website [Link]

XL Energy Limited
XL Energy Limited was started in the year 1985 and has become a leading solar panel
manufacturing company of India. It has head office in Hyderabad and believes in using
innovative technology, cost effective business solutions to produce high quality products.
Corporate office Hyderabad, Andhra Pradesh
Establishment 1985
Website [Link]

Moser Baer Photovoltaic Ltd

Moser Baer Photovoltaic Ltd is a prominent Optical storage and Solar products
manufacturing company that was started in 1983. company has head office in New Delhi and
has more than 7000 employees. Company manufactures solar PV modules and Solar EPC
Services manufactures
Corporate office New Delhi
Establishment 1983
Website [Link]

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1. Future Outlook
Solar Energy possesses tremendous potential in bridging Indias energy demandsupply gap in the future. There are various challenges for this industry, including
lowering cost of production, increasing R&D, consumer awareness and financing
infrastructure. It is important to overcome these challenges for fast growth and mass
adoption of the technology. Some of the immediate actions to enable growth are
efficient implementation of renewable energy certificates, usage of carbon trading as a
source of revenue, immediate implementation of grid powered energy in regions of
Rajasthan and Gujarat, development of off-grid usage in various applications such as
cellular towers and encouraging localized mini grids in areas that lack connectivity
today. If these initiative work as planned, it is only a matter before India becomes one
of the world leaders in Solar Energy.

Mention/Cover following points The PLFs / Plant load factor / Bankability of solar projects
/ funding to the sector /

Fortum has won a bid in reverse auction process conducted by NTPC on April 12, 2016, for
the selection of 500 MW grid connected solar PV projects under Batch II Tranche I of
JNNSM (Jawaharlal Nehru National Solar Mission) Phase II, the company said in a press
release Get entire background story of how the bidding took place and process etc.

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