A sunrise sector
India, which will rank among the four top generators of solar energy in a few years, is
also a major producer and exporter of solar panels. Huge investments are being made in
new manufacturing units across the country, notes Annamma Oommen.
he planet’s hunger for energy
is growing by the day, even
as tens of millions of citizens
in the developing world
acquire air-conditioners, refrigerators
and cars, using up more electricity
and non-renewable forms of energy.
Even as the world’s need for more
energy grows, the fact remains that alter-
native sources of energy contribute to
barely one per cent of overall consump-
tion. Solar energy, which is perhaps the
most reliable – and easily exploitable
– source of non-conventional energy,
contributes even lesser.
However, the scenario is ‘brightening’
rapidly. Currently, solar installations around
the world add up to about 3 GW (gigawatt)
of power, and are projected to double by
2010. Global sales of solar installations
are expected to touch $65 billion by 2013,
from just $16 billion in 2006.
Solar power can be generated through
different technologies like crystalline
silicon wafers and photo-voltaic (PV) cells.
The former is more popular as it is consid- solar energy in India is less than 100 MW;
HERE COMES THE SUN ered much more efﬁcient compared to energy currently produced here costs a
Solar energy is today one of the panels – with a total investment of Ventures ($800 million) have submitted thin ﬁlm PV cells and even CIGS (copper, whopping 22 cents a kilowatt, which is We are working on
‘hottest’ sectors for investors looking .5
about $7 billion. The group plans to set proposals to the government. Another indium, gallium, selenide) cells, as crystal- ‘peak power cost.’ “We are working on
for opportunities in India. Billions of up the poly-silicon, solar-grade wafers energy major, Lanco Infratech of line sillicon wafers produce an efﬁciency bringing this cost of generation down to
bringing the cost of
dollars in investments are expected to
materialise over the coming months,
and solar PV modules factory (at a cost
of about $2.9 billion) in Jamnagar in
Hyderabad, is also planning a foray into
the solar energy sector. According to
level of 24 per cent under test/laboratory
conditions (about 16 per cent in the ﬁeld).
10 cents, which is at par with the cost of
‘back-up power’ obtained from a generator
generation down to
as top Indian business groups unveil Gujarat, where it already has a reﬁnery. L. Madhusudan Rao, chairman, Lanco For thin ﬁlm, the efﬁciency is lower that runs on kerosene oil, he explains.
” 10 cents, which is
ambitious plans for a sector that is The other plant will be a semi- Infratech, the company plans to set up at 7 per cent in the ﬁeld, which is why “We expect to achieve this in the current
glowing red-hot. The Indian government, conductor fabrication unit with an end-to-end solar complex in Chennai, crystalline silicon accounts for 90 per cent ﬁnancial year.” at par with the cost
which unveiled its semiconductor policy assembly, test, mark and packaging and is keen to invest across the board in of the market. This also makes the cost of By 2011-12, advanced technology
last year, announced a special incentive (ATMP) facility and would be built at various solar technologies. generating electricity through solar power should help Signet lower the cost of of ‘back-up power’
package for potential investors in a cost of over $4.6 billion. Reliance The Indian government is offering more expensive due to the limited avail- production to about ﬁve cents a unit,
technologies that will help generate Industries has ambitious plans for the incentives, including ﬁnancial subsidies ability of crystalline silicon (energy from which is the current grid power cost. obtained from a
solar energy. sunrise sector. It is planning to set up and equity participation adding up to 20 wind and biomass is cheaper). However, Started as early as the 1970s, the
The government has received seven a 10 MW solar facility in West Bengal. per cent of capital expenditure in the a combination of scale and technological Indian government’s solar PV programme
generator that runs
proposals adding up to investments of State-owned Bharat Heavy Electricals ﬁrst 10 years – for projects in special innovations are bringing production costs is one of the largest in the world. Major on kerosene oil.
about $16 billion to set up manufacturing Ltd is also keen on a joint venture economic zones (SEZ) – and 25 per cent closer to those of conventional energy. players include public sector companies
units for poly-silicon, single and multi- with Reliance for setting up solar in non-SEZ areas. An entrepreneur investing in solar like Central Electronics Ltd, Bharat Heavy
crystalline ingots, wafers, solar cells, fabrication units. Indeed, there is an unprecedented technology, who can put things in Electricals Ltd (BHEL) and Rajasthan
photo-voltaic modules, etc. Half a dozen other companies, rush to tap solar energy as investors the right perspective, is Prabhu Goel, Electronics and Instruments Ltd (REIL).
Reliance Industries has submitted including Videcon Industries ($2 billion formulate projects to manufacture chairman of Signet Solar, California, who The Union Ministry of New and
a plan to set up two manufacturing investment envisaged), Moser Baer PV components that would help generate has invested $2 billion in India’s solar Renewable Energy (MNRE) is targeting
facilities – for semiconductors and poly- Technologies ($1.5 billion), Titan Energy much-needed power for an energy- energy industry. an additional 14,000 MW power through
silicon, both used for making solar System ($1.47 billion) and KSK Energy starved world. According to Goel, the market for renewable resources (including solar
ENORMOUS OPPORTUNITIES: The government has received proposals worth $16 billion in the solar energy sector
WHAT-A HEATER: About 2.15 million sq m of collector area has been installed in India for solar water heating applications
of nine solar energy plants in six states investments are in the ofﬁng. One of the
during 2007-08. Maharashtra tops the list biggest is the $2 billion investment by
Concessional or with three plants, with Jammu & Kashmir Signet Power, in a project in Chennai over
at two. Other states with one each the next ﬁve years.
nil import duty include Chhattisgarh, Haryana, Orissa and Signet Solar plans to target a produc-
West Bengal. tion of one GW models by 2016. “Being
on some of the The Ministry has also announced a located in the special economic zone (SEZ)
new programme designed to expand at Sriperumbudur near Chennai, the plant
raw materials, solar power generating projects up to a will roll out products for exports, primarily
components and maximum capacity of 50 MW and various ”
for Europe and America, says Goel.
sops and incentives have also been offered Later, the company would focus on the
products is also for the private sector. For example, entre- Asia-Paciﬁc region. Initially it will manufac-
preneurs who build, own and operate solar ture modules for 60 MW plants. Signet’s
being offered projects will be offered ﬁnancial incentives plans are primarily export-driven, unless it
of about 30 cents for each kilowatt of solar sees the domestic market evolving signiﬁ-
along with excise power generated per hour. cantly. The plant is expected to be commis-
Incentives for thermal power fed to sioned by the end of next year.
duty exemption. power grids would be slightly lesser. According to Vasudeva Rao, execu-
Research and development is also being tive director, XL Telecom and Energy Ltd,
encouraged to improve their performance a Hyderabad-based solar panel manufac-
and reduce the consumption of materials. turer, India is emerging as a major player
Interest subsidy is being provided on soft in solar energy. Over the next two to three
loans to users and manufacturers. Conces- years, many Indian companies will be
power) by the end of the Eleventh sional or nil import duty on some of the exporting solar energy panels to Europe,
Five-Year Plan (2012). About $150 raw materials, components and products lured by the size of the market and the
million has been allocated for research, is also being offered along with excise subsidies. Similarly, the Middle East also
design and development in the energy duty exemption and 80-100 per cent accel- beckons Indian exporters.
sector in the 11th Five Year Plan, as erated depreciation in the ﬁrst year. Funding from private equity (PE)
compared to less than $20 million in the India currently has 19 manufacturers players could enable a big jump in solar
previous plan. of solar PV modules, and substantial new installations. In light of the capital inten-
The Ministry has also given ﬁnancial
support to about 600 R&D projects in MORNING TEA: Companies operating in the solar energy sector offer complete and customised solutions to customers
this sector. Other initiatives include devel-
opment of ‘solar cities’ and demonstra- sive nature of solar projects, funding India, plans to expand manufacturing Systems, Surana Ventures, Neotech
tion programme on MW-size Grid Solar opportunities have been limited so far and capacity from 50 MW to 200 MW through Solutions and Nanotech Solutions.
Power Generation. The government plans private players have not been stepping a billion-dollar investment. Nanotech is considering a thin solar cell
to identify 60 ‘solar cities’ and extend into the sector. This could change if Many of these investments are fabrication project, which requires a
ﬁnancial assistance to reduce dependance money is committed by PE and venture being made keeping in mind the lucra- substantially greater investment. There
on conventional energy. capital funds. tive markets of Europe and the US. Says are several smaller companies that are
According to latest data, 33 grid inter- Moser Baer Photo Voltaic, a 100 per Narender Surana, managing director, operating in the 2-4 MW capacity, looking
active solar PV power plants have been cent subsidiary of Moser Baer India, Surana Telecom and Power Ltd, Hyder- to scale up in the near future.
installed in India with ﬁnancial support is also looking at solar power projects abad: “Our diversiﬁcation was based Overseas players like AES-Riverstone
from the government. These plants, in Karnataka, West Bengal and Jammu on the strong market potential for solar is also bullish on India. AES-Riverstone is
with a total capacity of 2.12 MW, are and Kashmir. Other existing domestic panels in markets in Germany and the US. a joint venture between US power major
projected to generate about 2.55 million private players looking to further expand The relative low-gestation project and high AES Corp and private equity ﬁrm River-
units of electricity annually. Other than their operations include Tata BP Solar, XL returns are one of the reasons for compa- stone Holdings. Both AES and Riverstone
this, 1.45 million off-the-grid solar PV Telecom, WebelSL Solar and Titan. nies to enter this business. ” plan to contribute $500 million to set up
systems, comprising 125-MW capacity, Tata BP Solar, one of the early movers Another Hyderabad-based company, AES Solar, and over the next ﬁve years will
have been installed, leading to a prospec- in the private sector, does not just produce Goldstone Infratech, has diversiﬁed into invest up to $1 billion in PV solar projects
tive 150 million units per year. Another solar modules, but offers complete and solar energy by planning to set up a around the world.
2.15 million square metre of collector customised solutions. In addition to selling 40MW/annum manufacturing facility. Of “We are watching developments in
area has been installed for solar water a solar street light module that costs the 18 companies setting up plants across India and have the ﬂexibility to move into
heating applications. $260, the company also bundles batteries, the nation, about half are coming up in and ”
the market if conditions warrant, says
Even state governments are taking automatic electronic switching systems, around Hyderabad, with some in the Fab Ralph Alexander, managing director of
keen interest in the development of alter- the pole and even installation and other City project, a state government-private New York-based Riverstone.
native energy sources with focus on solar services at a cost of $540. Solar Semicon- sector initiative. Some of the players with The future for the solar energy industry
power. The MNRE promoted deployment SOLAR CELL CHARGER: Huge amounts are being invested for research, design and development in the solar energy sector ductor, which has ofﬁces in the US and a presence at Fab City include Titan Energy in India indeed looks promising.