Month: May 2015

The Modi government has set itself the target to achieve electricity for all by 2019. While this is not the first time such a target has been set in India – in fact, similar targets have been set by previous governments for 2007 and 2012 – many observers think that if it can be achieved than by this government. However, it will not be easy. Let us look at what challenges needs to be solved.

Cost of delivery of power to the hinterlands is highest and the ability of consumers in those areas to pay for power is the lowest

There is a strong co-relation between states with the highest share of un-electrified population and poor financial health of a state’s utilities

The government wants to involve the private sector with a focus on renewable micro-grids

The fundamental issue is that the cost of delivery of power to the hinterlands is highest and the ability of consumers in those areas to pay for power is perhaps the lowest. The challenge is the same for both grid extension and distributed generation. Depending on the option, the cost of delivery of power using a grid extension can be INR 6/kWh to INR 25/kWh, for a solar micro grid, it can be anywhere between INR 14/kWh to INR 18/kWh and for individual solar lighting kits and products, the cost of power is between INR 16/kWh to INR 40/kWh.

This economic perspective, however, is directly contradicted by the social one. It is unjust that affluent urban consumers pay significantly lower prices for electricity than their poorer rural counterparts. Therefore, any government scheme needs to have a social spending component to it. To avoid misuse of funds, all social spending needs to be administered and regulated. Due to this, the Indian bureaucracy often choose the option that is easiest to administer even if it is not the most effective and in some case it might even be right in doing so. There are several examples of this in the solar sector alone: i) the focus on utility scale projects that allows targets to be met with easy monitoring despite India’s leaky grid and the ability of solar to be produced in a distributed fashion; ii) writing off the generation based incentive (GBI) in favor of a capital subsidy scheme despite the fact that GBI would actually mean lower cost to the government in net-present value terms and it also being a performance linked incentive.

If we apply this principle to rural electrification using distributed renewables, micro-grids would be easiest to monitor and regulate. We already see that all the proposed changes in the Electricity Act 2003 point towards a micro-grids focused approach to rural electrification and in the past there have been talks about the central government working on a separate policy for the same. For any such policy, the central government alone can’t fund the entire effort and state governments and/or private sector will be required to provide a part of funds.

There is a strong co-relation between states with the highest share of un-electrified population and poor financial health of a state’s utilities. This co-relation forms a vicious circle that has stalled earlier electrification efforts. To break it, the government now wants to involve the private sector with a focus on renewable micro-grids. In the proposed amendments to the Electricity Act 2003, several changes have been made to cover aspects such as waiving the requirement for a power distribution license for rural solar micro-grids, a waiver of charges and clarity on what happens to these micro-grids when the conventional grid reaches in that area.

This is all good. However, there is still no proven business model that has evolved for micro-grids. Some private companies have tried different business models but none of them has proved to be scalable.

Coming back to the social spending aspects of micro-grids, an efficient incentive mechanism is required for a scalable business model to evolve. Until now, rural electrification has not even found a mention in the government’s ambitious 100 GW solar plan. Therefore, unless the government comes out with a robust policy for solar micro-grids with a substantial financial backing, the future for this option looks uncertain.

The end-customers are tired of waiting for the government and despite their financial constraints they have started to take things into their own hands. The market for solar products is evolving rapidly. Several companies have found scalable business models in this segment. By some estimates, this market has actually grown in volumes since the government’s subsidy scheme became dysfunctional. The government’s subsidy scheme was marred with lack of funds and late payments that ended up restricting the market more than promoting it. The most successful companies today (e.g. Greenlight Planet, D.light, etc.) are the ones that stayed out of the subsidy scheme even when it was operational.

Even though this non-incentivized market is expected to continue to grow at an impressive pace, it will not be able to reach the critical mass required to get electricity (or even lighting) for all by 2019.

If the government is serious about this target, it needs to up its game considerably and address the fundamental economics of rural electrification. People are demanding access to electricity now and the governments, especially at the state level, that are unable to deliver, may soon be out of power.

Jasmeet Khurana is Senior Manager Consulting at BRIDGE TO INDIA

During Prime Minister Narendra Modi’s visit to China last week, 3 MoUs were signed, potentially worth USD 260 million (refer) for solar cell and module manufacturing units. Trina Solar and JA Solar have signed MoUs with Welspun Energy and Essel Solar respectively to set up manufacturing facilities in Andhra Pradesh. Canadian Solar also signed an MoU with Gurgaon based Sun Group to develop solar projects and explore manufacturing in India.

Interest to invest in the renewable sector is gaining ground among both Indian and international investors

The central government has been making intense policy and execution efforts to grow renewable investment in India

BRIDGE TO INDIA expects aggregate utility scale capacity to reach 27 GW and rooftop capacity to 4 GW by 2019

This is consistent with one of our recent weekly updates (refer), where we had discussed active international interest in cell and module manufacturing in India. As with many MoUs, it is possible that some of these discussions will not turn into concrete investments. But the announcements show that both Indian and international investors are exploring business opportunities in the sector and there is other evidence of activity picking up on the ground.

The central government has been making intense policy and execution efforts to grow renewable investment in India.  After the proposed amendments to the Electricity Act 2003 and National Tariff Policy 2005, the government has accelerated initiatives for project development. Central government agencies are expected to meet targets of 15 GW for utility scale solar and 10 GW of rooftop solar by 2019. The government has announced ambitious investment program to strengthen the transmission infrastructure where new projects worth USD 16 billion can be awarded within six months. State governments are also being urged to implement net-metering policies for rooftop solar.

BRIDGE TO INDIA has revised its market projections following these developments. We now expect aggregate utility scale capacity to reach 27 GW by 2019 and total rooftop capacity to reach 4 GW by 2019. More details of the projections and a lot of other updated market analysis will be available in our flagship publication, ‘India Solar Handbook 2015’ to be released at InterSolar Munich in June 2015. It will be available for free download on our website.

Solar is great. It is an abundant, free and omnipresent source of energy. We just need to convert it into a form of energy we can use: heat/cool or electricity. The only problem is that in order to convert it, we need to manufacture specific equipment (collectors, panels, inverters, etc.) – and that is costly. This is where our global energy transition is stuck. What we try to do is reduce the cost of this conversion equipment and find clever ways of financing it. But what about changing the industry entirely: into a circular economy, where we just lease the materials we need to convert sunlight into electricity?

Solar is a technology, not a fuel: the equipment can be reused

The challenge of financing could be entirely avoided in a circular economy approach

A community of interest of manufacturers, EPCs and developers/land owners could scale solar up much more rapidly

A couple of years ago, I had the opportunity to visit one of the world’s most advanced space observatories, high up in Chile’s Atacama desert. It is an incredible feat of engineering and innovation. One relatively minor aspect of it, however, struck me in particular: The telescope required a very large amount of Platinum. (I don’t remember what for.) The amount was so much that it would have been far too expensive to purchase. So instead, it was just borrowed. Or, more accurately: leased, at a fee. It was molded into the shape needed for this particular purpose and after 30 years or so, when we might have an even better use for it, it can be returned to the owners (there were many) and again leased out for some other use.

This made me think of the solar industry. Take PV panels, for instance. We use them to convert sunlight into electricity. Both are forms of energy. A panel consists mainly of processed silicon sand (the cells) and aluminum (the frame). To make a panel, we need electric energy. Today the industry is set up in a traditional value chain: ingots, wafers, cells, modules. At each stage, there is a manufacturing margin. At the end, the module is sold on the market to a buyer, who uses it to make electricity and through that, earn or save money.

Now, that solar power has become competitive with socket and grid power prices, the market is no longer limited by the amount the government wants to provide in terms of subsidy. The bottleneck is simply the liquidity of the buyers (and the banks). A module lasts for around 30 years, after which time it is disposed of – ideally recycled. The buyer also has to be interested in owning a product that has a long life, longer than your average car, watch or even house.

What, if we looked at a solar module differently: as materials and energy that can be loaned? The user is only interested in the power generation, not in owning the equipment. A solar panel will generate the same amount of energy it used up in the manufacturing process within one year. The aluminum can be reused afterwards in many industries, such as the manufacturing of airplanes or vehicles. The silicon can be used in transistors, rectifiers, and other solid-state devices, which are used extensively in the electronics and space-age industries.

So, instead of selling a solar panel, manufacturers should lease it out and at the end of it, sell or reuse the materials. The price at which it is leased out should be lower than the levelised cost of solar energy, if there is any innovation in terms of reusing materials. A similar approach might work for inverters, cables, mounting structures and batteries, too. Thus, the entire question of financing of solar becomes irrelevant. The EPC company could join this circular economy by offering to set up and maintain a solar plant in return for a share of the power generation revenues. Everyone: the component manufacturer, the EPC and the developer would then come together in a joint business of generating solar power over the lifetime of the equipment.

Then, all that is needed, is good land in a location that receives a lot of sunlight. Land is the only factor determining the energy input and hence solar electricity output. A landowner will just need to assess whether “growing” electricity is the best use of the land – as opposed to other options, such as agriculture or construction.

Such a circular economy approach is not possible for fossil fuels as they consume energy sources (coal, gas, etc.). It is the simple fact, that solar (and some other renewables, such as wind) is a technology, not a fuel, that makes it possible. The world needs a much more rapid global transition to a less polluting and low emissions energy infrastructure. Re-engineering the solar value chain is perhaps our best bet to achieve that.

Tobias Engelmeier is the Founder and Director of BRIDGE TO INDIA

From generation to delivery, India incurs one of the highest electricity losses globally. it needs to plug these losses – and grid modernization has to be a very important component of this. In a bottom up approach, a larger integration of distributed generation can be an important part of the puzzle. It can help bypass the inefficient grid altogether. In the absence of cost effective storage, grid-modernization at the local level in form oThese losses can be as high as 30-40%. In comparison, other growing economies such as Brazil and China suffer only 17% and 5% losses respectively. For India to achieve its energy security and energy access goals f net-metering can be an important tool. Unfortunately, despite central government’s best efforts, net-metering has not been readily adopted by all states or their DISCOMs. Reasons for their reluctance vary for each company and state. Focusing mainly on the residential segment, this article discusses their rationale and provides course correction required to make net-metering a success. [Refer – part 1 – consumers side of the story]

Net-metering is in an experimental stage. Each state and DISCOM will have to customize its policy and commercial aspects for itself for net-metering to be successful

The narrative supporting net-metering needs to change and reflect instead that it reduces AT&C losses and need for land

Infrastructure upgrade is a default requirement for India, and net-metering is another reason for faster upgrades and integration of new and better technologies

The Arguments

Through interviews with DISCOM officials, regulators, net-metering customers, solar companies and various industry experts, arguments that are usually provided against adoption of net-metering were compiled and categorized. Some of these arguments are valid, while others are not.

1) Commercial:

a) Loss of profitable customer base: The keyword here is “profitable”. Customers in higher tariff slabs are the most profitable for DISCOMs, and are also the ones that will benefit the most from net-metering. Implementation of net-metering will reduce the grid based energy consumption of these customers and help them fall into the lower tariff slabs – which will cause loss of profitable customers for the DISCOMs. This is legitimate concern for the DISCOMs who are already reeling under heavy financial losses.

2) Infrastructural and technical:

a) Demand-supply gaps: Another argument offered is that since net-metering will require greater energy banking for night time use and during high cloud cover, it will result in increased demand-supply gaps during peak times. This is simply not true. During day-time, through net-metering, residential complexes provide distributed supply of energy into the grid. With proper grid management, this power can be transported over short distances to the local commercial and industrial campuses for use. It also replaces the need to transport power for commercial and industrial use over long distances, as is currently the case. Net-metering supplements the grid with additional power to cover the demand-supply gap, not create it. For more commercialized cities, it can even help distribution companies to avoid buying expensive peak power (typically between 3-5 PM, in case of Delhi).

b) Grid balancing: If there are too many solar installations compared to the local service transformer’s size, then managing the load demand and energy supply can become problematic. While grid balancing is indeed a cause of concern, net-metering and other similar mechanisms are not the cause of it, they are merely highlighting how technologically backward our grid is. India is in critical need of infrastructure overhaul and grid balancing technology is required with or without solar or any other renewable/intermittent resources.

3) Policy: Lack of clear installation guidelines and processes from central and state regulatory authorities is another thorn in the side of net-metering execution plans.  Without proper processes and training and education of the distribution company employee at the last mile, even well intended policies and regulations will not work. While 21 states in India have announced policies and guidelines around net-metering, it is only operational in a couple of states.

The Reality

Unfortunately, India has not, as yet, properly and comprehensively studied net-metering, its effects, infrastructure requirements and our shortfalls to effectively utilize it. Apart from reducing T&D/AT&C losses, as discussed above, distributed generation along with net-metering has three major advantages:

1) Contributes towards grid stability: Utilities deliver both active power and reactive power along their distribution lines. While active power does the actual work when you flip on a light switch, reactive power rectifies voltage fluctuations and helps maintain voltage to deliver active power. Sudden lack of reactive power can cause grid instability and even blackouts like the one in the US in 2003. However, in addition to active power, grid connected solar PV systems also provide reactive power to the grid – which helps provide stable voltage. Thus, a distributed web of localized, net-metered solar installations will help DISCOMs run and maintain a more balanced and reliable grid.

2) Smart upgrades: India’s current power transmission and distribution infrastructure is in a shockingly poor condition, and is in dire need of an upgrade. DISCOMs like the Tata Power Delhi Distribution Limited (TPDDL) spend up to Rs 300-400 Crore annually to maintain their networks. Generation and transmission companies spend much higher. Compared to new capacity additions through centralized power generation, net-metering requires lower infrastructure upgrades with some natural balancing required within area of substations. The technology integration required for net-metering is a part smart-grids that India already needs for its energy security.

3) Reduces need for large pieces of land for newer power infrastructure: A no-brainer, but an often overlooked advantage of net-metering for the governments is that it uses the rooftops instead of acres of land which is required for ground mounted solar projects. The average residential rooftop is around 150-200 sq.m, and the total realizable potential for rooftop solar in India is 57-76 GW by 2024. That’s equivalent to over 380,000 acres of land area! If net-metering is comprehensively adopted nationwide then the pressure of land acquisition for meeting solar generation obligation of the state governments is greatly reduced.

Narrative needs to evolve

The discussion supporting net-metering has been that of energy availability. Instead, the aforementioned benefits of net-metering should be the real motivation for acceptance by the DISCOMs and states. More important still is the irreplaceable position that net-metering holds in implementation of smart-grid in India. Case in point, Puducherry, where adoption of smart grid and net-metering has already proved that it reduces pilferage, stems AT&C losses, and helps DISCOM become profitable. Consequently, given the heavy commercial losses, DISCOMs should shift their focus from increasing their revenues to reducing their losses – which will better impact their profitability.

Conclusion

The solution to increasing net-metering adoption in India cannot be singular (RPO/RGO requirements); it has to include logical short and long term financial benefits for DISCOMs, change in regulatory requirements for inverters, comprehensive installation guidelines, an in-depth study of net-metering’s effect on the grid and, most importantly, a change in the narrative supporting net-metering. Net-metering (and smart grids) are too important for India’s energy security. It’s time all stakeholders – end consumers, manufacturers, policy makers, distribution companies and industries – take notice and act rather than just taking part in endless discussions.

Gayrajan Kohli is Senior Manager- Consulting at BRIDGE TO INDIA

Today, there was a meeting called by Ministry of New and Renewable Energy (MNRE) to discuss their revised plans for 10,000 MW of solar PV projects expected to be tendered in the next few months under National Solar Mission (NSM). These projects will be split between tariff based bidding (3,000 MW) and Viability Gap Funding (VGF) based bidding (7,000 MW).

MNRE claimed that tenders for further 2,500 MW of projects under the same scheme will be announced in the next two months

For the VGF based bidding projects, MNRE has so far received confirmation from states for 2,670 MW of projects

BRIDGE TO INDIA’s opinion is that these allocations might stretch beyond the timelines stated today due to multiple operational reasons

This meeting came close on the heels of a tender already issued by National Thermal Power Corporation (NTPC) for 500 MW in Andhra Pradesh (refer). These projects will be awarded on the basis of tariff based bidding and solar power will be sold by NTPC to power distribution companies on a bundled basis along with thermal power. MNRE officials claimed that tenders for further 2,500 MW of projects under the same scheme will be announced in the next two months.

In addition, central government approval has been obtained for the entire 7,000 MW of VGF projects. As per original plans, these projects were envisaged under NSM (refer) by 2021. MNRE expects to complete project allocations by the end of this financial year.

The entire 10,000 MW of these projects will be tendered on a state-by-state basis, which is a move away from previous rounds of NSM but consistent with previously announced plans. However, several issues around the implementation of the solar parks policy are yet to be resolved (refer).

For the VGF based bidding projects, MNRE has so far received confirmation from states for 2,670 MW of projects: Karnataka (500 MW), Uttar Pradesh (500 MW), Maharashtra (500 MW), Tamil Nadu (500 MW), Rajasthan (250 MW), Gujarat (250 MW), Kerala (100 MW), Uttarakhand (35 MW), Delhi (20 MW), Meghalaya (10 MW) and Lakshadweep (5 MW). This will suffice for first round of 2,000 MW.

To increase participation, MNRE is considering removal of net worth clause for bidding of projects. This is a debatable decision as non-serious developers may bid aggressively. However, there is a deterrent in form of developers having to furnish performance bank guarantee of INR 3 million (USD 50,000)/MW. Additionally, MNRE is considering relaxing the equity lock in period of one year before change in ownership.

If India is able to allocate the entire 10 GW in this financial year, it will be path-breaking from a global perspective. However, BRIDGE TO INDIA is of the opinion that these allocations might stretch beyond the timelines stated today due to multiple operational reasons, including land availability and off-taker willingness to procure power. Actually, it might not even be desirable to allocate so much capacity in such a short duration of time as lack of sufficient bidding interest may lower the competitiveness of the bids. Additionally, there might be issues around ramping up of execution capacity in such a short duration of time. A sudden surge in demand might also lead to higher input costs for developers and a higher VGF/tariff.

The global energy system is in a period of rapid transformation: electricity plays an ever more important role, as do renewables, distributed generation and electric vehicles. Energy efficiency is improving. Emissions are a large and growing concern. New technologies and business models are disrupting and challenging a traditionally risk-averse and slow-moving industry. The International Energy Agency (IEA) has just published its new “Energy Technology Perspectives” outlining the global trends until 2050 (refer). Here are some of the key findings and the implications they might have for India.

 Investing into a low-carbon energy system pays back purely in energy terms (leaving aside environmental and climate externalities)

On a global level, and discounted at an annual rate of 10%, savings add up to USD 5 trillion until 2050

For India the goal – a low-carbon energy system – should be clear. The challenge is how to design the market.

Source: IEA

The Global Context

Here is some really good news: transitioning to a low carbon energy system by 2050, which will allow us to limit global warming to 2 degrees and thus save our way of life along the way, is actually a good economic choice. Leaving aside the cost of externalities, such as pollution and emissions from burning fossil fuels, we can save USD 115 trillion in fuel. This more than matches the additional investments of USD 44 trillion, mainly into more efficient transport and into the power infrastructure. The difference is a whopping USD 71 trillion – equivalent to the global GDP.

However, fuel savings accrue over time, while additional investments are needed upfront. Thus, the savings have to be discounted to put them into an investment perspective. At a discount rate of 10% – which is generous in the energy context – there is still a positive net effect of USD 5 trillion, more than 2½ times the GDP of India. Add to that that a low carbon energy system will significantly reduce investment risks (many renewables have no fuel costs and a comparatively simple technology) and it becomes clear that: (a) a low carbon energy system is a good investment choice and that (b) economic growth and carbon emissions can be uncoupled.

Implications for India

The message could not be clearer. Building an efficient, flexible, resilient, energy-secure, clean, renewables-heavy energy scenario should be a no-brainer for India. In general, the returns are sufficiently attractive to attract private sector investors into the market. In addition, this would give India excellent leverage in international climate negotiations, which is critical given the fact that India is one of the countries most vulnerable to the effects of global warming.

The devil, however, is in the detail: how to ensure a market design (regulations, taxes, power prices, etc.) that unlocks this enormous opportunity? How to ensure supply security, stable consumer prices, a degree of competition, and reliability? This is the challenge all forward-looking countries are currently grappling with. While there are no easy answers to achieving a transition, the goal itself, however, should be clear.

Tobias Engelmeier is the Founder and Director of BRIDGE TO INDIA

It has been more than 100 days since the government of Haryana has made it mandatory for all buildings with an area of 500 sq. yards or more to install solar rooftop systems. Unfortunately, there has been very little progress in the implementation of the policy. A pervasive culture of delays and an expectation that policies are not enforced makes the market very slow to react. Will this well intentioned policy join the fate of so many others and simply be ignored?

The mandatory solar rooftop policy in Haryana is ineffective so far

A lack of information and support from the government hampers implementation

The government itself has not executed any pilot solar installation

Under Haryana’s state solar policy, the government plans to install solar rooftop plants of up to 500 kW on a cluster of public buildings in each district headquarter. Also, private buildings are encouraged to form a cluster and get solar power from IPPs. For individual houses, building owners are to be incentivized through a net-metering policy at feed-in tariff decided by HERC.

The promising policy came about to help Haryana deal with its chronic power shortages. Solar makes a lot of sense in the state. Power tariffs are high, there is a good network of solar installers in the state, Haryana is very power hungry, the Discoms are loss making and cannot invest enough themselves: all factors are in favour for rapid solar adoption.

Till date, however, Haryana has only around 22 MW of utility scale solar installed and no more than 4.8 MW of rooftop solar. 6 MW of utility scale and 1.2 MW of rooftop was installed in 2014. With that, the state has less than 1% of the total solar installed in the country, a low number, especially compared to its 4% share of national power consumption.

In principle, the solar policy is clear, straighforward and should be effective. However, in reality, it is lost in the woods. Currently, no relevant power consumer group, be it schools, hospitals, colleges, office spaces, malls or even private bungalows is seriously considering building a rooftop system because of the policy. Why? The reason is lethargic implementation. It is something we have heard many times before in India. But it does not have to be that way. The policy could be implemented better with simple measures.

Currently, there is no guidance from the government to educate people about the minimum technical specifications required and the economic feasibility of a solar system. It would be key to inform and help large power consumers meet their obligations. Also, the lack of financial support (MNRE’s 15% subsidy and the state’s additional 10%), makes it tough for consumers to go solar. The policy like many other policies has been built on the MNRE’s subsidy scheme. This scheme, however, has itself not been implemented: funds are not made available and projects get indefinitely delayed as customers wait for a better deal. As a result of such shortcomings, the impression is created that the government is shifting the responsibility of providing reliable power supply to the consumers itself.

 An effective order for mass adoption of solar rooftops in the state could be:

[1] First start with public buildings, this can be organised (perhaps clustered) by the government[2] Then move to large private entities (industries) and encourage IPPs[3] Finally the residential building owners should be pushed for installations at their own roof

The government currently puts all focus on mandating individual owners to go for solar since that involves less participation from the government’s side. It would be better, however, if Haryana could inverse its approach. It could learn from Gujarat, which effectively implemented India’s first solar rooftop programme.

Over the past months, several international PV module manufacturers have announced plans to ‘Make in India’. While Trina Solar and Canadian Solar have declared that they are setting up manufacturing capacities in India, First Solar and SunEdison have stated that they are studying the viability of manufacturing capacity in India.  As per BRIDGE TO INDIA’s sources; at least two other large international manufacturers are seriously considering setting up cell and manufacturing capacities in the country. As per our estimates, around 2,000 MW per year of manufacturing capacity is in the planning stages.

Firstly the anticipated demand of solar in India is on the rise

Secondly financial incentive of up to 25% of the capital cost of module manufacturing facilities is available under the M-SIPS

Some of the state governments are providing further incentives for setting up solar manufacturing facilities

Several factors are attracting international interest in setting up solar manufacturing capacity in India. The most important factor, of course, is the rising anticipated demand in the country combined with India’s persistence with domestic content requirement policy for a part of the total capacity requirements. The second important factor is the availability of a financial incentive of up to 25% of the capital cost of module manufacturing facilities under the Modified Special Incentive Package Scheme (M-SIPS) of Ministry of Communications and Information Technology for applications submitted by the end of this month (May 2015). Minimum investment requirement for crystalline cell and module line is INR 1 billion (USD 15.7 m) and for thin-film line, it is INR 3 billion (USD 47.1 m). These requirements translate into a 60 MW crystalline cell and module manufacturing facility. Most international manufacturers are expected to be planning much bigger facilities of more than 200 MW each.

In addition, some state governments are providing further incentives for setting up solar manufacturing facilities. For example, Andhra Pradesh, which has one of the better policies, provides additional financial assistance of up to INR 2.5 million (USD 40,000) along with subsidy in power tariffs, exemption of stamp duty, VAT/CST tax exemption for first five years of operation and several other smaller grants and subsidies on aspects such as skill up-gradation, patent filing, certification and participation in international exhibitions. It also provides exemption from inspection under several local laws to improve the ease of doing business.

Depending on the availability of funds under the M-SIPS scheme and growth of the solar sector in India, up to 2,000 MW of module manufacturing capacity may come on stream over the next couple of years. If this capacity is globally competitive, it could be used to meet domestic demand and also cater to some export markets. But one thing is for sure – the existing manufacturers will need to up their game to compete with the new players.