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Therefore, there is huge potential for solar energy in India. To harness this potential India has
also conceived the idea of International Solar alliance which aims to focus on solar power
utilization and reduce the cost of finance and the cost of technology for the solar sector. Solar
Sector in India consists of 4 segments: Policy based Utilities, Open Access Solar, Rooftops &
Off-grid solar.
400
631 1,907
200
100
OPEX CAPEX
FY14 FY15 FY16 FY17 FY18 FY19*
Rooftop solar additions of 7-8 GW is expected over FY19-23. The rooftop segment has failed to
gain significant traction with an estimated installed capacity of 1.5 GW in FY18 as opposed to
MNRE target of ~ 5 GW for FY18. The overall target for rooftop is set as 40 GW by FY22. The
commercial and industrial consumer segment has seen the most activity with rooftop
developers targeting large C&I customers due to high industrial/ commercial DISCOM tariffs. Of
the total tenders announced in FY17-18 for 527 MW capacity, 56% were under CAPEX and 44%
under the OPEX model.
UTILITY SOLAR
Capacity Addition, MW 7,400 NTPC offtake SECI offtake Public Sector
State Govt. Others
5,000
3.3 3.4
4,000
3,000 Total
Installed 3.0
Capacity of
600 900 21.3 GW 1.2
10.2
FY14 FY15 FY16 FY17 FY18 FY19*
Around 60% of the total National Solar Mission target of 100 GW by 2022 is allocated to utility
scale solar projects. A utility-scale facility generates solar power and feeds it into the grid,
supplying the power to a utility. A utility is an electric company (often a public utility) that
engages in electricity generation and distribution in a regulated market. Virtually every utility-
scale solar facility has a Power Purchase Agreement (PPA) with a utility, guaranteeing a market
for its energy for a fixed term. Solar capacity addition in FY18 was higher than that of all other
energy sources, non-renewable included. In comparison, coal and wind added only 4.6 GW and
1.7 GW respectively. Capacity addition is expected to slow down in FY19 due to low tender
activity in FY17.
1. Slowdown in tendering as well as bid response affected the commissioning schedule for
FY’19.
2. Significant allocations and tendering over FY19 YTD is expected to lead to significant
capacity additions over FY20 and FY21.
3. FY22 may see rapid expansion in capacity additions due to terminal year of the target.
4. The sharp fall in tariffs over 2016-17 and 2017-18 (to INR 2.44 per kWh) was a result of
sharp fall in module prices, falling interest rates/ low cost funds availability, rising debt tenor
and scaling benefits.
FY13 FY14 FY15 FY16 FY17 FY18 FY13 FY14 FY15 FY16 FY17 FY18
1. The Rooftop Solar EPC prices fell at 18% CAGR between FY13-17. Prices increased marginally
in FY18 due to increase in module costs but are expected to fall again going forward.
2. OPEX capacity addition grew by 164% in FY2017-18 to 44% of the total installed rooftop
capacity.
3. In the CAPEX model, the customer pays for the installation cost while in the OPEX model,
the customer enters into an agreement with the 3 rd party to consume all the power.
Sector Report - Solar Energy 6
PORTER’S FIVE FORCES
Bigger players like Tata Power, Adani Power, Welspun Energy etc. are into larger utility scale
power plants.
ENERK International
Seychelles RKM Powergen 32.50
Holdings