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Solar power
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.

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                                                                                                                                                                    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

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                                                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.

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