PROBLEM STATEMENT

To study the prospects of renewable energy with respect to solar energy in India for State Bank of India.

OBJECTIVES OF THE STUDY

1. To study the economic and legal policy supporting solar energy. 2. To study the prospective states for solar energy. 3. To study the upcoming technology for solar energy. 4. To suggest measures to promote solar energy in India.

HYPOTHESIS OF THE STUDY

1. H0:- The economic and legal policy is not supportive to solar energy. H1:- The economic and legal policy is supportive to solar energy.

2. H0:- The adoption of solar energy in states of India is limited. H1:- The adoption of solar energy in states of India in not limited.

3. H0:- The technology is not a major factor in financing solar energy projects. H1:- The technology is a major factor in financing solar energy projects.

LIMITATIONS OF THE STUDY

The report has been conducted within a limited timeframe My recommendation may not act as a compulsion to be accepted by the respective authorities. Gathering primary data for the project was a difficulty.

INTRODUCTION
Our vision is to make Indias economic development energy efficient. Over a period of time, we must pioneer a graduated shift from economic activity based on fossil fuels to base on non-fossil fuels and from reliance on non renewable and depleting sources of energy to renewable source of energy. In this strategy, the sun occupies center stage, as it should, being literally original source of all energy. We will pool our scientific, technical and managerial talents, with sufficient financial resources, to develop solar energy as source of abundant energy to power our economy and to transform the lives of people. Our Success in this endeavor will change the face of India. It would also enable India to help change the destinies of people around the world.

Dr. Manmohan Singh, Prime Minister of India Launching Indias National Action Plan on Climate Change on June 30, 2008

1.1. RENEWABLE RESOURCES

A renewable resource is a natural resource which can replenish with the passage of time, either through biological reproduction or other naturally recurring processes. Renewable resources are a part of Earth's natural environment and the largest components of its ecosphere. A positive life cycle assessment is a key indicator of a resource's sustainability. In 1962, Paul Alfred Weiss defined Renewable Resources as: "The total range of living organisms providing man with food, fibers, drugs, etc...".[1] Renewable resources may be the source of power for renewable energy. However, if the rate at which the renewable resource is consumed exceeds its renewal rate, renewal and sustainability will not be ensured. The term renewable resource also describes systems like sustainable agriculture and water resources.[2] Sustainable harvesting of renewable resources (i.e., maintaining a positive renewal rate) can reduce air pollution, soil contamination, habitat destruction and land degradation.[3] Gasoline, coal, natural gas, diesel and other commodities derived from fossil fuels, as well as minerals like copper and others, are non-renewable resources without a sustainable yield. Renewable resources are an important aspect of sustainability. According to the U.S. Energy Information Administration, the most frequently used renewable resources are biomass, water, geothermal, wind and solar (see References 1). Unlike fossil fuels, we can regenerate or replenish these resources. Although biomass in the form of wood once supplied 90 percent of U.S. energy needs, all renewable energy sources combined supplied only about 8

percent of in 2009 (see References 1). With the rising cost and decreasing availability of nonrenewable fossil fuels, renewable resources are receiving increasing attention

1.2. TYPES OF RENEWABLE RESOURCES 1. Hydropower

Hydropower is the capture of the energy of moving water (falling of water from one level to another) for some useful purpose. This falling of water can be natural falling source or from a dam. The falling water is used to turn waterwheels or modern turbine blades which is used to powering a generator to produce electricity. Hydropower system is a clean source of energy systems that can neither be polluted nor consumed during its operation. It eliminates the cost of fuel, making it immune to price increases for fossil fuels. As long there is a water source (lake, river etc.) it is renewable.

2. Solar Energy

Solar energy is the energy from the sun (in the form of heat and light) that is directly capture and converted into thermal or electrical energy and harnessed as solar power. Solar power is the technology of obtaining (harnessing) usable energy from the light of the sun. Some applications of solar energy are hot water heating and space heating in the home. It is also used in the application of solar panels where individual homes (in region where it is warm and sunny) convert solar energy into thermal energy to generate electricity.

The use of solar energy displaces conventional energy where it results in a proportional decrease in greenhouse gas emissions. The energy from the sun is free with just the initial cost to set up the technology. The sun provides unlimited (renewable) supply of solar energy. The only drawback is that its requires a large area to collect the suns radiation and requires some means of storage.

3. Wind Power

Wind power is the conversion of wind energy into electricity using wind turbines (usually mounted on a tower). Wind power is used in large scale wind farms for national electrical grids. On a small scale it is also used to provide electricity to rural residences. Wind energy is ample, free, widely available, clean, and renewable, produces no waste or greenhouse gases, need no fuel, good method of supplying energy to remote areas and can be a site for tourist attraction. Wind is just moving air created as the sun heats the Earth's surface. As long as the sun is shining, the wind remains an infinite, renewable resource. Wind power is clean energy because wind turbines do not produce any emissions.

4.Biomass

Biomass Fuel (Biofuels) is any organic material produced by living organisms (plants, animals, or microorganisms) that can be burned directly as a heat source or converted into a liquid or gas. Some examples of biomass fuels are wood, crop residues, peat, manure, leaves, animal materials and other plant material.

There are two major sources of biomass: i. Trees, gains, sugar crops and oil-bearing plants. ii. Waste organic materials from industrial, commercial, domestic, or agricultural wastes. Examples, crop residues, animal wastes, garbage, and human sewage.

Biomass fuels are sustainable. It is cheap and is less demanding on the environment or Earth's resources. A major advantage of biomass fuel is its low greenhouse gas emission characteristic where it adds less carbon to the environment when compared with burning fossil fuels. This is due to the fact that the carbon atoms released by burning biofuel already exists as part of the carbon cycle. Biomass absorbs an equal amount of carbon in growing as it releases when consumed as a fuel.

Fuel diversity is another advantage of biomass, it can be transformed into fuel in many ways such as in gasification, anaerobic digestion - fermentation of wet wastes (e.g. sugarcane or corn to produce alcohol (ethanol) and esters, and animal dung to produce biogas) and direct combustion - burning of dry organic wastes (e.g. wood and peat) just to name a few.

The use of biomass fuels can reduce dependence on foreign sources of oil whereby providing energy security for the country using it as a fuel. This will therefore promote an economic boost for both agriculture and the industry of that country. However, for it to be economical as a fuel for electricity, the source of biomass must be located near to where it is used for power generation.

5. Geothermal Energy

Geothermal Energy is power generated by the harnessing of heat from the interior of the earth when it comes to (or close to) the earths surface. The regions with highest underground temperatures are in areas with active or geologically young volcanoes. Chief energy resources are hot dry rock, magma (molten rock), hydrothermal (water/steam from geysers and fissures) and geo-pressure (methane-saturated water under tremendous pressure at great depths).

There are several methods of deriving energy from the earths heat where the heat energy

that is generated by converting hot water or steam from deep beneath the Earths surface is converted into electricity. This hot water or steam comes from a mile or more beneath the earth surface. Geothermal applications include: i. Geothermal Electricity Production - generating electricity from the earth's heat. The steam rotates a turbine that activates a generator, which produces electricity.

ii. Geothermal Direct Use - Producing heat directly from hot water within the earth. iii. Geothermal Heat Pumps - Using the shallow ground to heat and cool buildings.

1.3. SOLAR POWER

WHY SOLAR POWER ITS EMERGENCE
The radiation that comes from solar energy along with the resultant solar energized resources such as wave power, wind, biomass and hydroelectricity all give an explanation for most of the accessible renewable energy that is present on earth. However, only an infinitesimal portion of the existing solar energy is used. So the question of why solar energy is important, that persists in the minds of many, is because solar energy can prove to have an immense amount of constructive and helpful impact on you and on the environment as a whole. Contrasting to the fossil fuels that we consume and use on a daily basis, solar energy does not fabricate the excessively injurious pollutants that are liable for the greenhouse effect which is known to lead to global warming. Solar power use reduces the quantity of contamination and toxic waste, not to forget pollution that the engendering plants have to produce. Global warming is an issue of great interest. In the recent times, with more awareness about the harmful effects of global warming, the issue is taken with great interest. There is in point of fact a massive belief that the use of fossil fuel is a contributing factor to the cause of global warming, which will ultimately result in the demise of the planet altogether. Probably the best part about why solar energy is that it is a renewable source of energy, which basically means that it will stay there forever, it will be consumed for all practical human usages. Oil, coal etc, is all bound to finish one day and eradicate from the face of the planet. So why not put them in the storage and use something more useful, is a basic question that many people have today. Another key aspect of using solar energy is that it has massive financial benefits. They can generally be seen in the reduction of your utility bills. As you would be consuming solar power for the electricity that you use, the heating, the cooling and the lighting of your environment. Statistically, in the United States, Americans are known to be consuming 25% of the worlds oil production on a daily basis. On the whole, the planet is being drained of its

oil resources and the energy prices are only bound to go up. To only mend your own personal cost of energy needs is probably one of the smartest things to do and not to forget a very valuable future investment, when measured up to the unavoidable rise in the cost of energy in recent times as well as the not so far future. Solar energy systems are very much affordable, and with the help from the local, state and the federal programs that are now available to help in the installation costs, they seem to make much more sense than using other sources of generating energy apart from the solar energy. Conversely, if you take benefit of the law that was passed in 2005, which is mainly referred to as the law of the net metering, you can actually end up saving on the price of the batteries and use extra power back into the utility network, which if you ever have the need to use it, can do so easily. This in short means that the utility corporation actually turns into being your own personal storage facility, with absolutely no extra fund cost to your wallet. On the global front, creating the use of solar energy seems to be one of the best options available. The change in the climate world over is a serious threat to our planet which is causing much of the problems. The emission levels of carbon dioxide that we generate by the constant use of fossil fuel are literally killing our planet. The usage of solar energy will only provide us with a clean environment, a life where we will not have to constantly worry about the ever so reducing resources to provide us with the basic comforts of our life. With net metering, the ever so reasonably priced solar technology and the ultimate willingness to change this situation around, you can augment the energy competence of your home, and in due course accomplish net zero fossil fuel expenditure and utilization. You will also save the planet from dying out by using solar energy!

2. SOLAR POWER
2.1. MEANING
Solar power is a renewable energy source --- a clean form of energy --- that converts the sun's radiation into usable energy. The use of solar power helps reduce greenhouse gases, offering an alternative to fossil fuels. Solar technology seeks to take advantage of the strength of the energy provided by the sun. Earth receives more energy from the sun in a single hour than the world's population uses in a full year. The sun has produced energy in the form of heat and light since the Earth formed. Solar energy systems do not produce emissions and are often not harmful to the environment. Thermal solar energy can heat water or buildings. Photovoltaic devices, or solar cells, directly convert solar energy into electricity. Individual solar cells grouped into panels range from small applications that charge calculator and watch batteries, to large systems that power residential dwellings. PV power plants and concentrating solar power plants are the largest solar applications, covering acres.

2.2. TYPES OF SOLAR POWER

Photovoltaic

Photovoltaic or PV, technology uses solar cells arrayed on panels to capture sunlight and convert it into electricity or heat. PV technology is used for a wide range of power needs, from small items such as calculators and watches to larger applications for satellites, homes and businesses. Traditional solar cells are made of silicon, but other materials are coming into use as the technology develops.

Concentrated Solar Power

In large-scale uses, concentrating solar power technologies captures sunlight using arrangements of mirrors to direct sunlight toward receivers, concentrating the sunlight and transforming it into heat. This heat is focused on a fluid, which as it gets hot fuels a turbine or generator that produces electricity. Concentrating solar power is capable of generating high levels of power and is valuable for large-scale needs like providing electricity to large populations served by municipal utilities.

Passive Solar Power

Passive solar power is a way of taking advantage of the sun's resources through the intelligent design of buildings. Passive solar power involves designing buildings so they receive sunlight in a way that reduces the need to consume other energy resources for heat and lighting. Strategic placement of windows so they are exposed to significant sunlight is one common passive solar power design tactic, providing both heat and light during the

day. Another common design feature is the use of materials in the floors and walls that capture, store and then release heat from the sun.

2.3. POWER STATIONS

INDIAS LARGEST PHOTOVOLTAIC [PV] POWER PLANTS NAME OF PLANT
Mithapur Solar Power Plant (Tata Power) - Mithapur, Gujarat Waa Solar Power Plant (Madhav Power) - Surendranagar, Gujarat DhirubhaiAmbani Solar Park, Pokhran, Rajasthan Bitta Solar Power Plant (Adani Power) - Bitta, Kutch District, Gujarat Azure Power - Sabarkantha, Khadoda village, Gujarat Moser Baer - Patan, Gujarat 30 Orissa - Patapur, Orissa 9 Green Infra Solar Energy Limited Rajkot, Gujarat 10 Commissioned November 2011 Commissioned August 2012 10 Commissioned October 2011 40 Commissioned June 2011 40 Commissioned January 2012 10 Commissioned in April 2012 25 Commissioned December 2011

DC PEAK POWER [MW]

NOTES
Commissioned 25 January 2012

2.4. SOLAR COMPANIES Sr No

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22

Company
Tata BP Solar India Ltd Sun Techniques Energy Systems Pvt Ltd Bharat Heavy Electricals Ltd HHV Solar Technologies Pvt Ltd Emmvee Toughened Glass Photovoltaics Pvt Ltd IComm Tele Ltd Thrive Energy technologies (I) Ltd Photon Energy Systems Ltd Andromeda Energy Technologies (P) Ltd Noble Energy Solar Technologies Ltd XL Telecom & Energy Ltd Sungrace Energy Solutions Pvt Ltd Shurjo Energy Synergy Renewable Energy Sova Power Limited Vikram Solar Pvt. Lt Webel Solar Ajit Solar Pvt. Limited Alpex International PV Power Tech Green Brillinace Energy Pvt Limited PLG Power Limited

PV Cell
No No Yes Yes & No No No No No No No No No No No No Yes No No No No No

PV Module
Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes

23 24 25 26 27 28 29 30

Access Solar Ltd. Solar Semiconductors Pvt Limited Titan Energy Systems Limited Moser Baer Synergic India Pvt. Limited Jain Irrigation Systems Premier Solar Systems Pvt Ltd Maharishi Solar Technology Pvt Ltd

No No No Yes No No No No

Yes Yes Yes Yes Yes Yes Yes Yes

2.5. SPONSOR COMPANIES

NAME PRODUCTION (MW)
MWp/2012 MWp/2011 Sunlux Energy Ltd Aditi Solar Polycrystalline Monocrystalline, Polycrystalline Ajit Solar 3 280 75 280 10 240

PANEL TECHNOLOGY

POWER RANGE (Wp)

Monocrystalline, Polycrystalline

BHEL

Monocrystalline Polycrystalline, Monocrystalline

Borg Energy

Central Electronics

3 3 8 0 1

Monocrystalline

10 180 3 250 3 240 3 310 3 150 10

Borg Energy

Polycrystalline Monocrystalline, Polycrystalline Polycrystalline

Central Electronics

Borg Energy

Central Electronics Borg Energy

Monocrystalline Monocrystalline,

Polycrystalline Central Electronics

300 200 315 75 225 5 285 10 250

15 15 8 10

Monocrystalline, Polycrystalline Polycrystalline Monocrystalline, Polycrystalline Monocrystalline, Polycrystalline

Borg Energy

Central Electronics

Borg Energy

2.6. LOCATIONS /SITE ASSESSMENT

The site selection process aims at identifying sites suitable for the power plant. Following issues have to be addressed during this phase inorder to achieve the expected result: Definition of exclusion criteria and areas (environmental restrictions, military facilities, etc) Assessment of site conditions (Meteorology, land characteristics, land use, etc) Infrastructure Electricity price, production, and demand

Exclusion criteria and areas Before evaluation potential areas seeking for optimum sites it is necessary to rule out ineligible areas applying the exclusion criteria such as: o Environmental restrictions (natural park, protected habitat, etc) o Military facilities o Areas affected by armed conflicts o Existing human settlements o Archeological restrictions o Livestock Assessment of site conditions

The next foremost important task to be performed is the visits to the sites. Visits to the areas identified allow determining the optimum sites suitable for installation of power plant within the area by analyzing the following key associated factors: o Meteorology o Land characteristics o Infrastructure Meteorology The solar energy i.e. irradiation, is the first criteria for the selection of a site since it is the resource which will determine how much electricity can be produced. The amount of solar radiation depends on following factors: o Latitude o Altitude o Local climate and atmosphere o Wind speed o Extreme weathers o Pollution o Humidity Land characteristics The assessment of land characteristics depends on following factors: o Size, shape and orientation o Distance of shading objects Land use Ideally the foreseen site should not be covered by prior agricultural use. Keeping in mind the existing restrictions regarding plant operation the condition of the site has to be

documented during site visit. Care needs to be taken by recognizing protected trees, agricultural use, livestock pathways, or alike, which might represent future constraints for the project. Infrastructure Infrastructure includes following factors: o Grid availability o Access to the site o Proximity to roads, railways, ports, cities, or airports o Water availability o Electrical situation in the region

2.7. TECHNOLOGY
Solar energy is the energy derived from the sun through the form of radiation. A number of solar thermal applications have been developed, which include water/air heating, cooking, drying of agricultural and food products, water purification, detoxification of wastes, cooling and refrigeration, heat for industrial processes, and electric power generation. This technology route also includes solar architecture, which finds utility in designing and construction of energy efficient buildings. Photovoltaic (PV) cells have a low efficiency factor, yet power generation systems using photovoltaic materials have the advantage of having no moving parts. PV cells find applications in individual home rooftop systems, community streetlights, community water pumping, and areas where the terrain makes it difficult to access the power grid. Photovoltaic (PV) cells are placed on the rooftop of houses or commercial buildings, and collectors such as mirrors or parabolic dishes that can move and track the sun throughout the day. The efficiency of solar photovoltaic cells with single crystal silicon is about 13 % - 17%. High efficiency cells with concentrators are being manufactured which can operate with low sunlight intensities.

Types of solar cells available:

The PV cells are manufactured by hundreds of manufacturers worldwide and there are several different technologies available. There are three main types of commercially available PV cells: Mono crystalline silicon PV Polycrystalline silicon PV

 Thin film amorphous silicon PV At present the first two categories dominate world markets constituting 93% of it the last one account for 4.2% of the market. There are other types of solar cells but is less in use which includes concentrated photovoltaic, hybrid solar cells, multi junction solar cells etc. The silicon based technologies, crystalline Silicon, multi-crystalline Silicon, amorphous silicon are the dominant technologies at 24%, 19% and 12% efficiencies respectively at cell levels. The efficiencies at module levels are 5-6 % lower due to variety of reasons. Most of the Indian companies are producing at 15-17% efficiencies at cell levels and at about 12-13% at module levels. There is scope of improvement in different technologies. A Thin-Film Solar Cell (TFSC), also called a Thin-Film Photovoltaic Cell (TFPV), is a solar cell that is made by depositing one or more thin layers (thin film) of photovoltaic material on a substrate. The thickness range of such a layer is wide and varies from a few nanometers to tens of micrometers. Many different photovoltaic materials are deposited with various deposition methods on a variety of substrates. Thin Film Solar Cells are usually categorized according to the photovoltaic material used. The following categories exist: Cadmium Telluride (CdTe) Copper indium gallium selenide (CIS or CIGS) Dye-sensitized solar cell (DSC) Organic solar cell Amorphous silicon (a-Si) On an average the efficiency of thin film cells are 6-12% furthermore the thin-film PV market is showing a spectacular annual growth rate of 126% in 2007. These thin film solar cells will be suitable for window and facades in Building Integrated PV (BIPV) technologies.

High efficiency solar cells with concentrators:

Highest efficiency solar cells have micro morph triple junction Ge/GaAs/GaInAsP materials. Technology is quite intricate and cost of triple junction solar is quite high. Hence, these cells are primarily used for satellite applications. For terrestrial applications, these cells are used in high concentration mode to reduce usage of costlier cells. Using optical reflectors, light is concentrated from 200-500 times on 1 cm2 active area. The Sun is tracked daylong in two

dimensions to keep the sunspot on device area. Only few companies have mastered the cell and tracker technologies. There is need to know better and perfect the cell and tracker technologies.

2.8. INPUT COST

Total project cost per MW is in the range of Rs.6.5 Crores-Rs.8 Crores depending on the kind of technology being used, whether or not tracking systems are used, the kind of EPC Contractor is chosen for power plant system etc. CERC recently announced the benchmark tariff for setup of Solar PV and Thermal Plants in India. Heres the link to the document containing more details: http://www.cercind.gov.in/2013/orders/SO242.pdf The table below indicates CERC determined benchmark cost for Financial Year 2013-14.

Central Electricity Regulatory Commission (CERC) benchmark costs for O&M is Rs.11.63 lakhs/year/MW for 2013-14 with a 5.72% increase every year. This varies from project to project based on the number of people employed for maintenance, frequency of cleaning of panels, onsite-engineer availability etc. Per unit production cost is dependent on how much cost you are setting up the power plant for. Accordingly, the per unit sale cost can be set based on the expected returns.

2.9. POLICY FRAMEWORK MINISTRY OF NEW AND RENEWABLE ENERGY

Ministry of New and Renewable Energy (MNRE) is a nodal Ministry of the Government of India at the National level for all matters relating to new and renewable energy such as solar, wind, biomass, small hydro, hydrogen, geothermal, etc. The endeavor of the Ministry is to promote renewable enable technologies and increase the contribution of renewable energy

in the total mix in the years to come. The Ministry has created testing centers to ensure quality and standard products in the market. Besides, MNRE has created Centre for Wind Energy technology (C-WET), Solar Energy Centre (SEC) and National Institute of Renewable Energy (NIRE). In addition, the Ministry is supporting some Centre of Excellence in Renewable Energy. The Ministry has a wide range of programmes on research and development, demonstration, and promotion of renewable energy for rural, urban, commercial, and industrial applications as well as for grid interactive power generation. A three fold strategy is being followed: a) Providing support for research, development, and demonstration of technologies; b) Facilitating institutional finance through various financial institutions; c) Promoting private investment through fiscal investments, tax holidays, depreciation allowance and remunerative returns for power fed into the grid.

JAWAHARLAL NEHRU NATIONAL SOLAR MISSION TOWARDS BUILDING SOLAR INDIA

INTRODUCTION 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 challenge. It will also constitute a major contribution by India to the global effort to meet the challenges of climate change.

This mission is one of the eight key National Missions which compromise Indias National Action Plan on Climate Change. It has a twin objective to contribute to Indias long term energy security as well as its ecological security.

The objective of the Jawaharlal Nehru National Solar Mission (JNNSM) under the brand 'Solar India' 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 Mission has set a target of 20,000MW and stipulates implementation and achievement of the target in 3 phases (first phase upto 2012-13, second phase from 2013 to 2017 and the third phase from 2017 to 2022) for various components, including grid connected solar power.

The successful implementation of the JNNSM requires the identification of resources to overcome the financial, investment, technology, institutional and other related barriers which confront solar power development in India. The penetration of solar power, therefore, requires substantial support. The policy framework of the Mission will facilitate the process of achieving grid parity by 2022. In order to facilitate grid connected solar power generation in the first phase, a mechanism of bundling relatively expensive solar power with power from the unallocated quota of the Government of India (Ministry of Power) generated at NTPC coal based stations, which is relatively cheaper, has been proposed by the Mission. This bundled power would be sold to the Distribution Utilities at the Central Electricity Regulatory Commission (CERC) determined prices. The Mission also provides for NTPC's Vidyut Vyapar Nigam Ltd or NVVN to be the designated Nodal Agency for procuring the solar power by entering into a Power Purchase Agreement or PPA with Solar Power Generation Project Developers who will be setting up Solar Projects during the next three years, i.e., before March 2013 and are connected to the grid at a voltage level of 33 kV and above. For each MW of installed capacity of solar power for which a PPA is signed by NVVN, the Ministry of Power (MoP) shall allocate to NVVN an equivalent

amount of MW capacity from the unallocated quota of NTPC coal based stations and NVVN will supply this bundled power to the Distribution Utilities. This Scheme is referred to as the 'Bundling Scheme' in these guidelines. Considering the fact that some of the grid connected solar power projects were already at an advanced stage of development, the guidelines for migration of Projects from their respective existing arrangements to the ones envisaged under JNNSM have already been issued by Ministry of New and Renewable Energy. The goal to ensure large scale deployment of solar generated power for grid connected as well as distributed and decentralized off grid provision of commercial energy services.

ROADMAP Sr. No. 1 Solar collectors Application Segment Target for Phase Target for Phase Target for Phase 1 (2010 13) 7 million 2 (2013 17) sq 15 million 3 (2017 2022) sq 20 meters 2000 MW million

meters 2 3 Off grid solar applications 200 MW Utility grid

meters 1000 MW

power, 1000 2000 MW 4000 10000 20000 MW MW

including roof top

The objective of the Mission is to create a policy and regulatory environment which provides an incentive structure that enables a rapid and large scale capital investment in solar energy applications and encourages technical innovation and lowering of costs.

Although in long run, the mission would seek to establish a sector specific legal and regulatory framework for the development of solar power, in the shorter time frame, it would be necessary to embed the activities of the Mission within the existing framework of the Electricity Act 2003.

The National Tariff Policy 2006 mandates the State Electricity Regulatory Commissions (SERC) to fix a minimum percentage of energy purchase from renewable sources of energy.

National Tariff Policy, 2006 would be modified to mandate that the State electricity regulators fix a percentage to purchase solar power. The solar power purchase obligation for States may start with 0.25% in the Phase 1 and to go upto 3% by 2022.

This could be complemented with solar specific Renewable Energy Certificate (REC) mechanism to allow utilities and solar power generation companies to buy and sell certificates to meet their solar power purchase obligations.

The Central Electricity Regulatory Commission (CERC) has issued guidelines for fixing feed-intariff for purchase of solar power which will be revised on an annual basis. The CERC has also stipulated that Power Purchase Agreement that utilities will conclude with solar power promoters, should be for a period of 25 years. NTPC has a wholly owned subsidiary company engaged in the business of trading of Power NTPC Vidyut Vyapar Nigam Ltd. (NVVN).

NVVN will be designated as a nodal agency for entering into Power Purchase Agreement (PPA) with Solar Power Developers to purchase solar power fed to 33 KV and above grid, in accordance with the tariff and PPA duration as fixed by the Central Electricity Regulatory Commission.

The Ministry of Power shall allocate to NVVN, equivalent megawatt capacity, from the Central unallocated quota, from NTPC power station, at the rate notified by the CERC for bundling together with solar power.

NVVN will undertake the sale of the bundled power to State utilities at the rates determined as per CERC regulations.

Those State utilities will be entitled to use the solar part of the bundled power for meeting their Renewable Purchase Obligations (RPO) under the Electricity Act, 2003. The above arrangement will be limited to utility scale solar power generated from a maximum anticipated capacity of 1000 MW in the first phase.

The requirement of the phase indigenization would be specified while seeking development of solar power projects under this scheme. The tariff and tax regime for key components and segments would be suitably fine tuned so as to promote the process of indigenization.

The Mission will encourage rooftop PV and other small solar power plants, connected to LT/11 KV grid, to replace conventional power and diesel based generators. The distribution utility will pay the tariff determined by the State Electricity Regulatory Commission for the metered electricity generated from such applications. Under the Solar Mission, a normative Generation Based Incentive will be payable to the utility and would be derived as the difference between the solar tariff determined by the CERC for the concerned solar generation technology lees an assumed base price of Rs 5.50/kWh with 3% annual escalation.

The distribution utilities would be entitled to account such electricity generated and consumed within the license areas of fulfillment of RPOs. State Governments would also be encouraged t promote and establish solar generation parks.

2.10. GOVERNMENT INCENTIVES

THREE INCENTIVE MECHANISM REBATES
With investment subsidies, the financial burden falls upon the taxpayer, while with feed-in tariffs the extra cost is distributed across the utilities' customer bases. While the investment subsidy may be simpler to administer, the main argument in favor of feed-in tariffs is the encouragement of quality. Investment subsidies are paid out as a function of the nameplate capacity of the installed system and are independent of its actual power yield over time, thus rewarding the overstatement of power and tolerating poor durability and maintenance.

 FEED-IN-TARIFFS
With feed-in tariffs, the financial burden falls upon the consumer. They reward the number of kilowatt-hours produced over a long period of time, but because the rate is set by the authorities, it may result in perceived overpayment. The price paid per kilowatt-hour under a feed-in tariff exceeds the price of grid electricity.

SOLAR RENEWABLE ENERGY CERTIFICATES

Alternatively, SRECs allow for a market mechanism to set the price of the solar generated electricity subsity. In this mechanism, a renewable energy production or consumption target is set, and the utility (more technically the Load Serving Entity) is obliged to purchase renewable energy or face a fine (Alternative Compliance Payment or ACP). The producer is credited for an SREC for every 1,000 kWh of electricity produced. If the utility buys this SREC and retires it, they avoid paying the ACP. In principle this system delivers the cheapest renewable energy, since the all solar facilities are eligible and can be installed in the most economic locations. Uncertainties about the future value of SRECs have led to long-term SREC contract markets to give clarity to their prices and allow solar developers to pre-sell/hedge their SRECs. The price per kilowatt hour or per peak kilowatt of the FIT or investment subsidies is only one of three factors that stimulate the installation of PV. The other two factors are insolation (the more sunshine, the less capital is needed for a given power output) and administrative ease of obtaining permits and contracts.

2.11. GRID PARITY AND NET METERING

GRID PARITY
Grid parity for photovoltaic (PV) technology is defined as the point where the cost of PVgenerated electricity equals the cost of electricity purchased from the grid. Achieving grid parity is a function of many variables, including the solar resource, local electricity prices, and various incentives. The break-even cost for photovoltaic (PV) technology is defined as the point where the cost of PV-generated electricity equals the cost of electricity purchased from the grid. This target has also been referred to as grid parity and may be expressed in $/W1 of an installed system.

NET METERING

Net metering, unlike a feed-in tariff, requires only one meter, but it must be bi-directional. Net metering is particularly important because it can be done with no changes to standard electricity meters, which accurately measure power in both directions and automatically report the difference, and because it allows homeowners and businesses to generate electricity at a different time from consumption, effectively using the grid as a giant storage battery. As more Photovoltaics are used, ultimately additional transmission and storage will need to be provided, normally in the form of pumped hydro-storage. With net metering, deficits are billed each month while surpluses are rolled over to the following month. Best practices call for perpetual rollover of kWh credits.[85] Excess credits upon termination of service are either lost, or paid for at a rate ranging from wholesale to retail rate or above, as can be excess annual credits. In New Jersey, annual excess credits are paid at the wholesale rate, as are left over credits when a customer terminates service.

2.12. State wise status and opportunities in solar power generation

On the basis of solar power utilization and generation, states are categorized into four groups: top performers, potential risers, slow movers and non-movers. Top performers: There are four states namely Gujarat, Rajasthan, Karnataka and

Maharashtra which are actively participating in solar power movement. These regions receive a significant amount of solar radiations throughout the year which provide great opportunity for harnessing solar power. These states have well planned solar policy (except Maharashtra) and commissioned new solar power projects. Potential Risers: Tamil Nadu, Andhra Pradesh, Orissa, Haryana, Uttar Pradesh, Punjab and Uttrakhand have great potential for solar power generation and they are going to commission solar power projects under National Solar Mission and other solar schemes. Some of these states have drafted their own solar policy. Slow movers: West Bengal, Manipur, Chhattisgarh, Jharkhand, Pondicherry, Delhi, Jammu and Kashmir, Tripura, Kerala and Mizoram are at the growing stage of solar power generation. Some solar plants are commissioned in Delhi, Jharkhand, and Chhattisgarh only. Other states also have good solar power potential but there is no development so far due to lack of proper policy framework. Non-Movers: There is no development in the direction of solar power generation in Himachal Pradesh, Assam, Arunachal Pradesh, Nagaland, Sikkim, Meghalaya and Goa. They even do not have any solar policy.

STATE POLICY
FEATURES

STATES

CAPACITY ELECTRICITY REACTIVE BANKING PER YEAR DUTY POWER CHARGES CHARGES Minimum 5 MW Exempted As per 50 from payment GERC lakhs/MW for sale order at the time 50% of PPA exemption for signing demand cut with Distribution Licensee Exempted for As per 50

CDM BENEFITS

GUJARAT

50% of CDM benefit

Minimum

Benefit as

RAJASTHAN

5 MW & own use Maximum 10 MW 40 MW Exemption for KARNATAKA captive consumption and third party sale within state MADHYA Minimum 10 year PRADESH 1 MW & exemption Maximum (from COD) 100 MW ANDHRA PRADESH Minimum 5 MW

RERC order

per DISCOMs order As per 2% banking Benefits as KERC charges per order bidding proceeds

lakhs/MW

As per 2% banking MPERC charges of order 100% energy in every F.Y Exemption for As per 2% banking captive APREC charges of consumption regulation 100% and third energy in party sale every F.Y within state

Benefits as per MPERC

Benefits as per APREC

2.13. ADVANTAGES AND DISADVANTAGES

Solar Energy Advantages
The power source of the sun is absolutely free. The production of solar energy produces no pollution. The technological advancements in solar energy systems have made them extremely cost effective. Most systems do not require any maintenance during their lifespan, which means you never have to put money into them. Most systems have a life span of 30 to 40 years.

Most systems carry a full warranty for 20 to 30 years or more. Unlike traditional monstrous panel systems, many modern systems are sleeker such as Uni-Solar rolls that lay directly on the roof like regular roofing materials. In 35 states, solar energy can be fed back to the utilities to eliminate the need for a storage system as well as eliminating or dramatically reducing your electric bills. Solar energy systems are now designed for particular needs. For instance, you can convert your outdoor lighting to solar. The solar cells are directly on the lights and cant be seen by anyone. At the same time, you eliminate all costs associated with running your outdoor lighting.

Solar Energy Disadvantages

Initial Cost: The initial cost of purchasing and installing solar panels always become the first disadvantage when the subject of comes up. Although subsidy programs, tax initiatives and rebate incentives are given by government to promote the use of solar panels we are still way behind in making full and efficient use of solar energy. As new technologies emerge, the cost of solar panels is likely to decrease and then we can see an increase in the use of solar cells to generate electricity.

Location: The location of solar panels is of major importance in the generation of electricity. Areas which remains mostly cloudy and foggy will produce electricity but at a reduced rate and may require more panels to generate enough electricity for your home. Houses which are covered by trees, landscapes or other buildings may not be suitable enough to produce solar power.

Pollution: Most of the photovoltaic panels are made up of silicon and other toxic metals like mercury, lead and cadmium. Pollution in the environment can also degrade the quality and efficiency of photovoltaic cells. New innovative technologies can overcome the worst of these effects.

Inefficiency: Since not all the light from the sun is absorbed by the solar panels therefore most solar panels have a 40% efficiency rate which means 60% of the sunlight gets wasted and is not harnessed. New emerging technologies however have increased the rate of efficiency of solar panels from 40 to 80% and on the downside have increased the cost of solar panels as well.

Reliability: Unlike other renewable source which can also be operated during night, solar panels prove to be useless during night which means you have to depend on the local utility grid to draw power in the night. Else you can buy solar batteries to store excess power which you can later utilize in the night.

Installation area: For home users, a solar energy installation may not require huge space but for big companies, a large area is required for the system to be efficient in providing a source of electricity.

2.14. APPLICATION / OFF-TAKE

The potential customers of solar power installation fall into these categories: Residential colonies: There is a strong sense of community among the residential colonies of urban and suburban India where residents are quite likely to pool their resources together to create a small local grid for the colony. Business office complexes: Companies such as IBM, EMC, Intel, Pfizer, etc. have built immense office complexes in the last 5-8 years that house thousands of employees and huge

arrays of power intensive computer equipment. These businesses cannot afford lengthy power outages common in India and therefore have very heavy-duty generator equipment also at hand. Rural townships and villages: This is an immense market and would typically be government-funded or non-profit funded installations. A target for electrifying such villages was fixed by the government and even achieved at some places. Such steps will help to meet the target of Power to all set by Government. Individual Residences: There are quite a significant number of private citizens who are in a position to afford solar power installations and would do so even though today it costs more than traditional grid power because of various personal reasons, e.g. being "green." Large government power production facilities: With the government putting emphasis on 1 to 5 MW power plant facilities as well as its larger goals for upgrading India's overall power production, this is truly a significant opportunity for PV companies exploring the Indian market. Water pumping: The unpredictable and inconsistent cost of Monsoon-based farming is a detriment to farmers in these areas. Providing irrigation and drinking water to rural farming villages could be accelerated by PV technology.

2.15. USAGE
Rural electrification
Lack of electricity infrastructure is one of the main hurdles in the development of rural India. India's grid system is considerably under-developed, with major sections of its populace still surviving off-grid. Developments in cheap solar technology are considered as a potential alternative that allows an electricity infrastructure consisting of a network of local-grid clusters with distributed electricity generation.

 Solar lamps and lighting

By 2012 46,00,000 solar lanterns and 861,654 solar powered home lights have been installed. These typically replace kerosene lamps and can be purchased for the cost of a few months worth of kerosene through a small loan. The Ministry of New and Renewable Energy is offering a 30% to 40% subsidy for the cost of lanterns, home lights and small systems up to 210 WP. 20 million solar lamps are expected by 2022.

Agricultural support
Solar PV water pumping systems are used for irrigation and drinking water. The majority of the pumps are fitted with a 2003,000 watt motor that are powered with 1,800 Wp PV array which can deliver about 140,000 liters of water per day from a total head of 10 meters. By 30 September 2006, a total of 7,068 solar PV water pumping systems had been installed, and by March 2012, 7,771 had been installed. Solar driers are used to dry harvests before storage.

Solar water heaters

Bangalore has the largest deployment of rooftop solar water heaters in India. These heaters generate an energy equivalent of 200 MW. Bangalore is also the first city in the country to put in place an incentive mechanism by providing a rebate of 50 on

monthly electricity bills for residents using roof-top thermal systems. Pune, another city in the western part of India, has also recently made installation of solar water heaters in new buildings mandatory.

Indias solar power industry began significant growth only in 2010, when the Jawaharlal Nehru National Solar Mission (JNNSM) was announced. After the announcement of JNNSM, grid-connected solar PV capacity increased by 165% in 2011 alone to reach 427MW. However, a failure to address the remaining financing challenges will make the targets set under JNNSM Phase 2 (4,000-10,000MW by 2017) and Phase 3 (20,000MW by 2022).

FINANCIAL ASPECTS
SOURCES OF FINANCE
A variety of investors finance renewable energy projects in India, including institutions, banks, and registered companies (Table 2-1). Institutional investors are either state-owned or bilateral and multilateral institutions. Among banks, both private sector and public sector banks are involved. In addition to registered companies, venture capital and private equity investors contribute equity investment. Return expectations of the investors vary according to the sources of their funds and the risk attached to specific projects.

During 2006-09, Indias annual total renewable energy investment remained between USD 4 billion and USD 5 billion. Investment has risen rapidly since then, from USD 4.2 billion in 2009 to USD 12.3 billion in 2011 (Figure 2-3).

While wind continues to receive the majority of investment, solar has seen the highest growth, and the gap between the two is falling rapidly, as shown in Figure 2-4.

Table 2-1: Renewable energy investors (number of institutions)

TYPE OF CATEGORY INVESTOR Commercial banks

TOTAL REGISTERED IN INDIA Public sector 26 banks Private sector banks Foreign banks Private equity 30 37 51

ACTIVE IN RENEWABLE SECTOR 9 6 16

Equity investors

Venture 180 capital Institutional Insurance 24 investors funds Development Development 3 Banks financial institutions*

21 11 3

DEBT - EQUITY INVESTORS

Conditions for renewable finance can be very different depending on the technology employed, the developer, geography, or the requirements of the investors themselves. The most important distinction is between investors in the debt markets (lenders) and those in the equity markets (owners). Generally speaking, debt investors are more conservative, accepting lower returns in exchange for lower risk. As such, their primary concern is that downsides are limited; that is, that the project does not fail. Equity investors are willing to take more risk in exchange for

higher returns, and therefore focus equally on risk and the prospects of a project performing even better than expected. Under most circumstances, a project will be least expensive when it is funded by a mix of debt and equity, either at the project level, or through debt and equity secured at the corporate level. Renewable energy financing can become costly when either debt or equity investors demand too high a return or when either is simply unavailable. Thus, for both debt and equity there are two sets of questions: Cost and terms: Are the returns investors are demanding and the conditions they are placing on their investment so onerous as to make the project economically unattractive? Or; Availability: Is debt or equity just not available? That is, are there enough investors willing to invest or lend to renewable projects in India? Significantly, while policy can influence the returns required by equity and debt investors and the availability of either, different policies are likely to be important to different classes of investors. In India, the differences between debt and equity are particularly striking. In general, we find that equity appears to be readily available at a reasonable cost, while renewable energy debt is both limited and expensive. To compound the problem, access to potentially lower cost international debt is limited due to regulatory barriers, the cost and risks associated with long-term currency swaps, and perceived country risks. As a result, the cost of debt to a renewable energy project in India will typically be in the 10-14% range, as compared to the 57% range typical in the United States. Despite the higher cost, debt in India also suffers from inferior terms, including shorter tenors and variable rather than fixed interest rates. There are many factors that influence the total finance cost. Here are five common factors: The cost of debt The tenor of debt that is, the length of time over which the debt is repaid Whether the debt is variable or fixed Extra risk that will be taken on by equity in the event that debt rates are variable The cost of equity, or the required return on equity (ROE)

LENDERS
The advent of IPPs in the wind power sector has helped to establish project financing as the new normal. Today an increasing number of domestic banks are considering renewable energy projects on a non-recourse basis. This shift in the attitude of financiers is reflected in extended maturities and tenor of loans and lower borrowing costs. Venture capital and private equity firms are also viewing renewables as an emerging opportunity. Deals worth $437.3 million (~ INR 2348.30 crores) were struck during the third quarter this year and included project finance, debt financing and venture capital funds.

Changing market perception is also endorsed by the participation of renewable energy generation companies in the equity market through the IPO route. For example most recently the Indian firm Infrastructure Leasing and Financial Services announced its plans to list its wind power business through an approximately $325-$406 million business trust IPO in Singapore by early 2013. Multilateral funding institutions are offering new avenues for investors in key developing country markets as part of their climate finance obligations and broader energy strategies. According to BNEF, development bank financing of renewable energy projects rose from $4.5 billion in 2007 to $13.5 billion in 2010, led by multilateral development banks (MDBs) such as the European Investment Bank, Asian Development Bank and the World Bank Group as well as national development banks (NDBs) such as KfW Bankengruppe (Germany), China Development Bank and BNDES (Brazil). Bilateral funding agencies are also extending support to wind power development across Asia. To name a few, the United States Agency for International Development (USAID) has been actively promoting development of renewable energy through its Market Development for Renewable Energy programme, the Chinese Development Bank and the KfW (German development bank) have been financing clean energy investments in various developing countries including India. Development banks have a key role to play in mobilizing capital when and where it is needed most. Commercial lenders, faced with global economic uncertainty and investments in unfamiliar markets often look to development banks to share various risks, whether perceived or real. An on-going positive dialogue between project developers, manufacturers, political and regulatory stakeholders and public funding institutes is the way forward to secure sustainable growth both from a financial and environmental point of view.

LENDING CRITERIA OF BANK

A considerable amount of work is carried out before the loan is agreed, to check that the project is well planned and that it can actually make the necessary repayments by the required date. This process is called due diligence, and it is carried out on behalf of the bank. The investors will make careful consideration of technical, financial and political risks, as well as considering how investment in a project fits in with the banks own investment strategy. The due diligence of the project will include the following criteria: Site assessment

 Resources available Assessment of technology Estimation of annual yield Plant layout Project technical details and layout Permits and clearances Financial analysis Risk assessment and mitigation of the project Generally, a bank will not lend 100 per cent of the project value and will expect to see a cash contribution from the borrower this is usually referred to as equity. It is typical to see 25 30 per cent equity and 7075 per cent loan (money provided by the bank as their investment). Occasionally, a loan of 80 per cent is possible. The size of the loan depends on the expected project revenue, although it is typical for investors to take a cautious approach and to assume that the long-term income will be lower than assumed for normal operation. This ensures that the loan does not immediately run into problems in a year with poor wind conditions or other technical problems, and also takes into account the uncertainty associated with income prediction. The bank after considering the project viability it decides upon the revenue generation per unit and adjusts it with the prevalent tariff rates. Another criteria of bank is if the project is unable to generate requisite amount energy then the bank will collect the remaining amount from the sponsorer of the project.

PROSPECTS OF SOLAR
SOLAR POWER IN INDIA
India is committed towards increasing the share of renewable power in the electricity mix to 15 per cent by the year 2020. Indian energy sector is expected to be at par with the global stipulations on carbon emissions and sustainability through various changes in the current set-up. The launch of Jawaharlal Nehru National Solar Mission, a joint initiative of the Ministry of New and Renewable Energy and Ministry of Power, is one of the most important environment friendly energy solutions available in India.

The National Solar Mission targeting 20,000 MW grid solar Power, 2,000 MW of off-grid capacity including 20 million solar lighting systems and 20 million square meters solar thermal collector area by 2022 is under implementation. Last year witnessed a significant growth in number of new initiatives in the renewable energy sector. The wind energy sector picked up momentum by adding over 2,800 MW capacities resulting in grid-connected renewable power capacity crossing the 22,000 MW milestones during 2011, grid-connected solar power plants crossed the 100 MW milestones as well. Further, over 1000 remote villages were electrified through renewable energy systems during this year. Wind power is the fastest growing renewable energy sectors in India. A total capacity of 15,880 MW of wind power has been installed in the country. A capacity of around 2827 MW has been installed during 2011. Following the Central Governments decision to enforce the Energy Conservation Building Code in new buildings to minimize the use of energy and recommendations to the state governments to follow the same with suitable amendments warranted by local circumstances and requirements, the state of Haryana has enforced the provisions of the code. The code is applicable to all buildings and complexes having a connected load of 500 KW and more, or having a contract demand of 600 KVA and more. The development and deployment of renewable energy, products, and services in India is driven by the need to decrease dependence on energy imports sustain accelerated deployment of renewable energy system and devices expand cost-effective energy supply augment energy supply to remote and deficient areas to provide normative consumption levels to all section of the population across the country And finally, switch fuels through new and renewable energy system/device deployment. India has one of the worlds largest programs for deployment of renewable energy products and systems, with wind energy being one of the highest with 11087MW installed. States with strong potential: (potential MW /installed MW

FUTURE MARKET POTENTIAL

It is believed that Indian Photovoltaic market have huge potential. The future generation of gadgets will mostly comprise those powered by the solar energy. Depleting non-renewable energy resources, rising electricity bill and increasing awareness about green energy sources, have prompted people to adopt technologies to harness the abundantly available solar energy.

It is clean, reliable and safe and if used skillfully, can reduce our dependency on conventional form of energy and save money as well as environment. Today, there is a wide range of solar devices available in the market including solar mobile phones, solar chargers, solar shaver, solar candles, solar lamps, solar headphones, solar exhaust fans, solar heating devices, solar energy saver etc. India today is the worlds fourth largest economy. Its economy has grown steadily over the last 30 years, averaging 7% annually since 2000. Electricity demand is growing at 8% annually, similar to the growth of the economy. According to some articles, there is 92 GW electricity demand over the next 10 years. India has a power generation capacity of about 170k MW of which only about 8 10% is generated through renewable sources. The country has an estimated renewable energy potential of around 85 GW from commercially exploitable sources: wind: 45 GW, small hydro: 15 GW and biomass/bio-energy: 25 GW. India has the potential to generate 35 MW/km2 using solar photovoltaic and solar thermal energy. The Government of India and its state governments have created a major initiative called The National Solar Mission. One of the main features of the Mission is to make India a global leader in solar energy and the mission envisages an installed solar generation capacity of 20 GW by 2022. This could in fact be much larger due to private initiatives that will no longer need state aid.

FUTURE DEMAND

There is an immense potential for solar gadgets in India, but certain hurdles prevent the rise in their demand. Environmental awareness is a prime factor fueling the demand of solar gadgets; however, in India this awareness is not as high as it should be. About 70 per cent of India lives in villages with very poor or no electricity supply. The demand for solar gadgets has increased in the past two to three years and the solar market has gained momentum.

During the last quarter we have noticed a 25 to 30 percent rise in sales. However, this demand has mostly come from small scale industries and villages. Although the market potential for solar products is huge, availability of coal generated electricity at Rs. 2.80/Kwh is the biggest hindrance for selling solar generated electricity that costs Rs 15/Kwh. It implies that when it comes to spending money, people prefer to save rather than care for the environment. Based on likely predictions of growth for the next decade, the solar module demand worldwide until is forecast as follows: 2010 13.6 2011 20.2 2012 23.8 2014 33 2017 85 2020 200

The JNNSM guidelines stipulate that the entire grid connected Solar PV plants in India coming under the scheme will have to use Solar PV modules that are made in India.

COMPANYS PROFITABILITY
Investment opportunities: There is a large scope for investments in solar energy sector and Government of India is taking all the necessary measures to promote the solar energy generation in the country. The policy measures and incentives taken by the government of India to promote investment in solar energy sector are as follows:

 Joint Ventures: A number of companies have entered into joint ventures with leading global PV manufacturers. There are no specific conditions laid down by MNES for the formation of joint ventures. General conditions lay down by the Ministry of Industry, Secretariat for Industrial Approvals and the Reserve Bank of India are applicable for this sector. Export-oriented Units (EOQ): It is possible to set up a manufacturing plant as a 100 per cent EOU. Generally, these are permitted duty-free import of raw materials and components. They are also eligible to sell up to 20% of their production in domestic markets. Technology Transfer Indian PV industry is interested in seeking technology for the manufacture of PV modules especially based on thin film materials, and is able to offer technology for the manufacture of silicon solar cells, PV modules and PV systems. Technology Development: R&D projects are supported by the government at Central/state government research organizations, autonomous societies, universities, recognized colleges, IITs, industries (with suitable infrastructure for R&D) and NGOs.

CURRENT NEWS -2013

The central Electricity Regulatory Commission (cerc) has extended the validity of renewable energy certificates (recs) from 365 days to 730 days from the date of issuance.

 Appellate Tribunal for Electricity (APTEL), cogeneration power plants are not required to meet RPOs, even if they generate electricity using fossil fuels. The Union Budget 2013-14 has proposed to reintroduce the generation based incentive scheme for wind energy projects and allocate Rs 8 bln to the Ministry of Renewable Energy (MNRE) for the purpose. As per the Railway Budget 2013-14 Indian Railways will set up 75 MW of windmills and energize 1000 level crossing with solar power during the year. The Tamil Nadu Generation and Distribution Corporation (TANGEDCO) has selected 29 firms for setting up solar power plants, aggregating 226 MW of capacity as part of its 1 GW solar tender. The Andhra Pradesh Government has received 294 bids aggregating 1350 MW from 184 bidders in response to its tender for setting up 1000 MW of solar power plants. Rajasthan Renewable Energy Corporation Limited (RRECL) has received bids aggregating 185 MW from 23 qualified bidders. Indore based M and B Switch Gears Ltd became first solar power developer in India to be issued Solar Renewable Energy Certificate by the National Load Dispatch centre (NDLC) on May24,2012. For renewable energy there is increase in budget 15.34 bln (13-14) as compared to 11.63 bln (12-13) The Kerala government has formally launched its 10000 Solar Rooftop Power Plants Programme 2012-13. Refex Energy commissioned two large-scale grid-connected solar PV plants with a total installed capacity of 20 MW in Bikaner district of Rajasthan, on February 25, 2013. Azure Power has commissioned 35 MW of solar power capacity in Kathauti village on Nagpur, Rajasthan, under Batch II of the JNNSM Phase I, ahead of the commissioning deadline. The Madhya Pradesh Government has earmarked 1000 acres of land in Neemuch district to set up Indias biggest solar power plant of 130 MW.

 Kiran Energy has commissioned three solar PV projects, aggregating 55MW, at Rawra village in Jodhpur district of Rajasthan under Batch II of the JNNSM. L&T and Mahindra EPC were the engineering, procurement and construction contractors for the project, which is expected to produce about 90000MWh of electricity per year, thereby reducing carbon emissions of about 80000 tonnes annually. Apart from this, the company is also building clusters of solar projects in several states including Maharashtra, Gujarat, Karnataka, Rajasthan and Tamil Nadu, with capacities ranging from 50 MW to 100MW. Domestic and International lenders are looking to invest in the sector, which is expected to witness a capacity addition of 30 GW during the 12th plan period (201217). As per conservatives estimates, about $600 mln of foreign direct investments are estimated to have come into the Indian Renewable Energy sector 2012-13 ($467.07 mln has already come in during the nine-month period ended December 2012). The Punjab Energy Development Agency has invited requests for proposal for setting up 300 MW of solar photovoltaic projects under the first phase of the states New and Renewable Sources of Energy Policy,2012 Uttar Pradesh has issued a tender for 200 MW of solar PV capacity, following the finalization of its solar policy, which aims at installing 500 MW of capacity in the state by March 2017. The Maharashtra State Power Generation Company has proposed a performancelinked revenue sharing model for setting up solar projects, under which developers would build, operate and maintain a solar power plant on a quasi-ownership basis. The Solar Energy Corporation of India has selected three solar power companies SunEdison, Thermax and Azure Power to set up rooftop solar power projects in Bengaluru, Chennai, Delhi and Gurgaon. NTPC has commissioned two solar power projects in the Andaman and Nicobar Island and Dadri (Uttar Pradesh), with a capacity of 5MW each.

 State-owned common salt manufacturing firm Hindustan Salts Ltd is looking to partner with Bharat Heavy Electricals Ltd for installing a 2500 MW solar generation integrated plant in Rajasthan. The Ministry of New and Renewable Energy has directed telecom operators to use solar power to energize at least 50000 towers on an immediate basis. The ADB has agreed to provide $2 mln of equity to Simpa Networks for helping the latter scale up the sales of its off-grid-pay-as-you-go solar energy solutions in India. Mytrah Energy Ltd has agreed to conditional terms for acquiring 59.75 MW of existing and operational wind power assets in Maharashtra and Tamil Nadu. MEL has secured funds aggregating Rs 11 bln from the State Bank of India, PTC India Financial Services Ltd and a consortium of senior debt providers.

CAPACITY ADDITION PLANS OF KEY PLAYERS UPTO 2018 Developer Mytrah Energy India Ltd NTPC Indian Energy Ltd Welspun Energy Ltd Greenko Energies Private Ltd RS India Wind Energy Ltd Inox Renewables Ltd Tata Power Company Ltd Beta Wind Farm Private Ltd Suryachakra Green Power Pvt Ltd Gujarat State Petroleum Corporation Ltd Reliance Wind Energy Ltd CLP India Pvt Ltd Planned Capacity Addition(MW) 5,000.0 1,025.0 1000.0 850.0 665.0 500.0 400.0 388.0 300.0 300.0 200.0 200.0 163.2

Gamesa Wind Turbines Pvt Ltd Indowind Energy Ltd Green Infra Ltd GAIL (India) Ltd Oil and Natural Gas Corporation NHDC Limited TEECL (Simran Wind Project Pvt Ltd) Others Total

160.0 128.0 125.0 115.0 102.0 100.0 100.0 1,065.6 12,886.8

Source: Centre for Monitoring India Economy; Renewable Watch Research Azure Power has expanded the capacity of its existing 5 MW plant in Nagpur, Rajasthan by 35 MW, becoming the largest solar power capacities to be commissioned at a single location under the JNNSM.

The Economy Energy Connect

Even after the global economic meltdown, India registered a GDP growth of 6.5% in 2011-12. Though modest, compared to its blockbuster performance of 8.4% in the previous two years, it is still respectable, given the dire economic breakdown in developed countries. Growth forecast for GDP for 2012-13 has been put at 6.7%, by the Economic Advisory Council to Prime

Minister, in their report of August 2012. Planning Commission has estimated that during XII Five Year plan period (2012-13 to 2016-17), for a GDP growth of 9% per year, energy supply has to grow at 6.5% per year. The ability to meet the energy requirement will depend upon Indias ability to expand domestic production in the critical subsectors such as petroleum, natural gas and coal, and meeting the balance requirement through imports.

Drivers for Energy Demand

Indias per capita energy consumption has grown at CAGR of 3.44% during 1970-71 to 201011.At the current level of 4816 KWH (2010-11), this is lowest amongst all major developing economies in the world. Though this can be partly attributed to the service oriented nature of Indian economy, the per capita energy consumption is low even when compared to countries such as Brazil, Argentina and Mexico that have a GDP composition similar to that of India. The fact that India is dominated by a rural population at 69%, which largely depends on non commercial sources to meet its energy needs also contributes to the low recorded per capita energy consumption. As per 2011 Census data, percentage of rural households using firewood, crop residue and cow dung as primary cooking fuel are 62.5%, 12.3% and 10.9%, respectively. Percentage of households owning 2 wheelers and 4 wheelers is 21% and 4.7%, respectively. Only 47.2% households use televisions. As this segment of India, otherwise known as bottom of the pyramid moves towards urbanization with higher disposable income for better standard of living, the energy demand is set to go up significantly. Energy Development Index (EDI), devised by International Energy Agency (IEA), value for India has declined from 0.295 in 2007 to 0.294 in 2011. In the last decade, while Indias GDP and primary energy consumption have grown at a CAGR of 7.6% and 6.6%, respectively, its energy intensity has decreased by -0.23% over 1970-71 to 2010-11 and is currently at 0.1167 KWH per rupee, very low as compared to its peer countries. The ability of India to grow at such attractive levels of energy intensity is laudable; albeit it is consistently driven by energy deprivation. If India is to service the ambition of providing employment to growing employable demographic constituents and maintain social harmony, an increase in energy intensity is perhaps unavoidable.

METHODOLOGY
The method of collection of data was through the Detailed Project Report given by mentor, various periodicals of Renewable Watch of 2012 2013. Research reports of various researchers etc.

CONCLUSION
The future of renewable energy in India is limitless. Indias leadership in the clean energy program is scaling new heights which is supported and facilitated by economic & legal policy. Although, the renewable energy scenario in India is in nascent stage; the trend keeps growing. The existing laws and policies have made it easier for this sector to flourish. A

developed India fuelled on solar power will be a model state for the world community. Howsoever, a dedicated uniform policy like that of Gujarat for the solar power generation can really help in harnessing solar energy at massive scale. Majority states in India receive a considerable amount of solar radiation; therefore there is a scope for tapping solar energy at the commercial level. Thus, there is a need to have a uniform national policy for the setting up of solar power plants in India. The energy sector in India can face challenges and gain prospects by fostering technological innovations in collaboration with global partners. Conditions required are: a) regulatory environment in energy sectors, including coordination and synergy amongst ministries of the federal government and b) investment climate including capital market regulation. The third requirement is people aspect of innovation. Innovation fosters best in a diverse work environment where people with different background and viewpoints mix, but Indian energy industries have been slow to recognize this need for diversity. A survey by the Global Energy management Institute indicated that bringing leadership from outside the energy sector will provide fresh perspectives and can help resolve the issues facing the industry. Thus the present global economic & energy challenges can be addressed in the context of three key drivers: Cooperation between Companies and Industry & other sections of the society; Innovation to exploit new frontiers & non-conventional sources of energy and Investment needed to meet the growing demand for energy across the society. The environment is certainly very tough and there is no option but to continue improving performance which presents considerable challenges and difficult choices & calls for innovation. But in a world of expanding energy needs, accelerating technological possibilities and increasing customer appetite for new choices, the energy sector is an exciting place to be in.

RECOMMENDATION

There should be coordination and cooperation within and between various ministries, agencies, institutes and other stakeholders in order to avoid delays and restriction in the progress in RE development.

Investments in Research and Development should be done more so that advance technologies could be developed and manufactured in country itself rather than importing it from foreign countries.

The state should give tax or import exemption or concession for equipments imported from foreign countries. A number of states (such as Maharashtra, Gujarat, Madhya Pradesh and Karnataka) do not allow the procurement of RE power from outside the state. This puts an artificial barrier in the way of RE power generation and investment across the country. Instead, regulators can identify ways and means of selling this power to neighbouring states short on RE resources or RPO at a mutually agreed upon rate.

Government of India should ask banks to allow an interest rebate on home loans if the owner of the house is installing a RE application such as solar water heater, solar lights or PV panel. This would incentivize people to integrate RE applications into their home, thereby encouraging the use of RE.

Need for technology specific policy design is necessary because renewables are at different stages of development and face different cost structures in the market.

BIBLIOGRAPHY

The Energy & Resources Institute (TERI) http://www.teriin.org/ http://mnre.gov.in/file-manager/userfiles/guidlines_sbd_tariff http://www.teriin.org/index.php

http;//www.selco-india.com/ http://timesofindia.indiatimes.com/topic/solar-energy http://www.solarpowernotes.com/why-solar-energy.html http://www.safan.com http://www.mnre.gov.in http://www.pewclimate.org/international/country-policies/india-climate-plansummary/06-2008 http://mnre.gov.in/pdf/mission-document-JNNSM.pdf. Detailed Project Report of SBI Renewable Watch magazine April 2012 Renewable Watch magazine June 2013 http://www.renewableenergyworld.com/rea?account/user http://www.taxes-incentives-renewableenergy2012.com http://powerbase.in/wind-power-project-at-dhar-in-mp-by-suzlon-energyltd