pManifold Indis_Solar PV_IIES_Workshop_report

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3/16/2011
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Solar PV System - Technology, Risks,
Manufacturing, EPC, O&M, Investment
Coverage Report from IIES Workshop
29th Jan 2011
1

Co-chair:
Rahul Bagdia, Co-founder pManifold, Head Energy Practice, Rahul.Bagdia@pManifold.com
Akash, Founder & CEO INDIS, akash@indisIIc.com

SUPPORTERS
www.iies.in

Workshop Speakers

Industrial Association Partner

Workshop Sponsors Workshop Organizer

2

3

Solar PV Business Models – Workshop Objectives
and Stakeholders

3/16/2011
Objective of Workshop
• Educate participants about various consumer

– oriented solar products
• Cover the basics of Off – Grid Solar PV Plant
Design
• Discuss challenges & opportunities for cost
reduction in MW Size Solar Pv Plants
• Outline typical production processes for Solar
products – PV Modules & LED Lights
• Understand the financing issues & concerns
from a Banker’s perspective

3

Solar PV – Workshop Content and Speakers 4

Activities/Topic Organization Speakers Position

Topic 0: Solar PV Business Models pManifold Rahul Bagdia Cofounder
(Co-Chair)

3/16/2011
Topic 1: Consumer products – applications
and potential
Session 1: LED Lighting Solutions Intellizon Adithya R&D Head
Session 2: Other consumer products Solkar Ragunathan Founder

Topic 2: Off-Grid / Rooftop Solar Solutions for
Buildings
Session 1: PV System Design INDIS Energy Akash (Co-Chair) CEO
Session 2: Case Studies, Financials, ROI Solkar Ragunathan Founder

Topic 3: Grid connected (MW Size) Solar PV INDIS Energy Akash CEO
plants

Topic 4: Component Manufacturing and
Processes in Solar PV
Session 1: Module Manufacturing Solkar Ragunathan Founder
Session 2: LED Light Manufacturing Intellizon Adithya R&D Head

Topic 5: Financing Solar/Renewables - Bankers SBI Abhijit AGM
Perspective Chakravorty

4

Solar PV – Gap Analysis 5

4 key gaps for scale-up of Solar PV in India – High initial Capex; Limited knowledge,
awareness & skill base; Lack of accurate solar insolation data; Lack of Easy Financing;

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Elements Dimensions & Rationale

• CapEx very high compared to other sources like a DG  High Cap Ex is limiting its
1 Initial Cap Ex adoption  but trends in cost reduction encouraging

• For solar products like LED lights, high initial cap ex limits its popularity

Skill & • Awareness and activities both in academia & industry is historically limited  more
2 knowledge funding might be needed. More training to be imparted to have a large base of
base professional Solar PV installers

Solar • Accurate & reliable Solar insolation data is not easily & freely available
3 insolation • Local environmental data like pollution & dust also not available
Database

• Banks skeptical about Government payment guarantees at such a high rate
4 Financing • Lack of solar insolation data further increases uncertainty for the banks
• Limited skill & knowledge base both in the banking industry & the
Infrastructure companies

5
From Akash’s @ INDIS (akashslc@yahoo.com)

SOLAR PHOTOVOLTAIC (PV) - BUSINESS MODEL OPTIONS
& CRITICAL SUCCESS FACTORS (CSFS)
PV Business Value Chain

3/16/2011
Project Developer

Source: KPMG, India

Stand Alone Applications

6
Excerpts from Rahul Bagdia’s @ pManifold presentation @ IIES 2011

MARKET SIZE AND GRID PARITY FOR SOLAR PV
India has a potential market
size comparable to other
countries leading solar PV
industry.

3/16/2011
India has low price of power
consumption per household
as compared to other

countries.

India has low price of
power per watt at peak
hours compared to other
countries.

India has more capacity of
electricity generation
compared to other
countries.

77
7

Risks Development Phase

WHAT RISK EXPOSURE

3/16/2011
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LED Lights – 56% OF RURAL INDIA BURNS BIOMASS, WAX CANDLES & 9

KEROSENE LAMPS, SPENDING RS. 2-5 PER DAY FOR LIGHTING

LED Lamps – Intelizon specs Customer’s perception – Need to

3/16/2011
• Dual Light Setting Demand
• High: 3-4 hours &
• Low: 7-10 hours • Farmers: In hut / House & in field
“I feel safe to go in fields at night , My hut /

• 95% Efficient System with 100lm/W LEDs
House & family has 100% safe & bright light”
• Portable (400 gms)
• Black Smith: Used to illuminate his workplace
• Safety – No smoke, fire hazard, Electric Shocks
“I can work after sunsets & that has increased
• High Quality & reliability (1 yr warranty) by income”
• Variants
• Solar only, Solar + Grid charging
• Anytime Mobile backup charging Cost breakdown of LED Street Light
• Long Range > 250m focus light
Others LEDs
LED Street Lightning - Intelizon specs 8% 13%
•2 – 3 X cheaper than existing Solar based streetlight solutions Mechanical Battery
•1 LED & 3 LED variants 22% 15%
•1 LED
•Light – 5 lux (avg) over 25 Sq ft area from 10ft height
•3 LED Electronics Solar Panel
•Light – 23 lux (avg) over 25 sq ft area from 10th height 20% 22%
•Comparable to 40W tube light based streetlights over 400 sq ft
from a height of 19ft

9
Excerpts from Adithya’s @ Intellizon (adithya.nallanchakravarthula@intelizon.com)

LED Product Manufacturing/Assembly 10

Standards Developing Distribution channel is the Key
• Component standards – Specification based – Industrial / • Vendor Development / Establish Suppliers
Consumer • Local Suppliers for better logistics
• Outsourcing standards – Internal / ISO 9000 • Primary Suppliers

3/16/2011
• Product build standards • Secondary Suppliers – backup / alternate
• Build time & efficiency to maximize output • Procurement
• Internal / ISO 9000 / Six Sigma • Negotiation for pricing & payments
• Finished goods tracking for better servicing • Better lead – times

• Customs & duties clearance
Certifications • Quality
• Process certification • Component level – SQC
• Product certification • Sub Assembly level
• BIS standards like IS 9000 • In – process quality
• MNRE, STQC • Testing
• IEC • Product level testing

Cost breakdown of LED Lamp
Others – 10% LEDs – 10%
Scope
Battery – 18%
Mechanical – 20%
• Huge market to tap – India &
other developing nations
Solar Panel - 12%
• Fill the gap – See where you
Electronics – 30% can fit based on your expertise
• Product Development
• Channel Development
10
Excerpts from Adithya’s @ Intellizon (adithya.nallanchakravarthula@intelizon.com)

Solar PV Off-Grid / Rooftop Solutions 11

System Design – Decision Points & Criteria Other Key Considerations
Parameters •Do not mix & match panels of different types or
manufacturers
• Site Details
•PV Panel I – V curve important

3/16/2011
• Location (Shading) & Orientation
•Temperature dependence (derating) is important
• Latitude
•Data on insolation should be accurate
• Solar Irradiation / Insolation
•System sizing done backwards: Load Sizing first, followed by
• Others (Dust, Soiling) inverter sizing, battery bank sizing, charge controller
• Temperature & Weather Patterns sizing, & PV array sizing

• Wind, Cloudiness, Rain, Snow •Site Details
• Area available & Array Size desired •Utility Conditions (440V)
• Foundation required (type of roof, on ground) •Some things to know
• Government Incentives (<100 KW or >100 KW) •Rajasthan will produce less power in summer than
Himachal Pradesh (Temp effect)
• Utility Conditions (440V)
•Thin films have less temperature deration than M-Si or C-Si
Other Decisions to be made •Improper installation of PV modules might disqualify them
• Panel Technology (C-Si, M-Si, Thin Films) from the Warranty
• # of strings, # of panels in series & parallel (Array total •PV modules comprise ~70% of the total cost
voltage & current) •Plenty of opportunities for innovation in Modules, Racking
• Comparison of panels from different Panel (mounting), BOS, Processes
Manufacturers (Panel Specs)
• Derating factor (75% to 80%; could be as low as 60% -
70% in India due to dust) Cost of 1 KW Solar System
• Applicable sun hours available (4 hrs to 6 hrs is typical; • With Battery – Rs. 3.00 lakhs
safe to assume an avg. of 4.5 hrs) • Without Battery – Rs. 2 lakhs
• Array tilt angle & orientation • Power generated – 5KW hr a day
• Conductor sizing (current, safety); Voltage drop • No. of days in a year – 320 days (location dependent)
• Grounding • Total units generated per year – 1600 units
• Autonomy • Life of the solar module – 20 – 25 years
11
Excerpts from Akash’s @ INDIS (akashslc@yahoo.com) presentation @ IIES 2011

MW Size Solar PV Plants 12

Optimal Solar Project Current Issues & Challenges
Financing Profile & Team • Successful project finance depends on making the numbers work
for investors with a high degree of predictability

3/16/2011
• Project promoters need to arrange working capital & some personal
• A larger number of investors can investment (skin) to make the financing math work
make financing very • Inexperienced Developers
complicated • Due to the slower uptake & launching of projects, module vendors
might get more vertically integrated & get involved in financing

• Developers prioritize on highest projects
PPA prices with creditworthy • Availability of engineering talent & an indigenous eco-system
power purchasers where the PPAs & What they are good for
speed to commercial operation
• Finance ability of large utility scale projects remains difficult
date is the fastest because of project size, PPA pricing, siting risks, land availability &
• Experienced Developer (or cost, transmission line (evacuation issues), grid stability, technology
risk & other factors
International tie ups) • Selling PPAs / Acquiring Land – rather than executing projects –
• Minimum project size might be a short-term trend
• Prices in PPA may be too low to be financeable – leads to
• Bankable Modules & EPC cancellation of the project
• Valid PPAs and site control for • The proposed feed in tariff (LCOE) for PV was Rs 17.91 per kWh
but with reverse bidding project developers had to submit a
the life of the PPA discounted tariff which they could offer. Bids for PV projects have
• Team approach that reduces been in the range of INR10.95/kWh to INR12.76/kWh with
average feed in tariff being INR12.1/kWh
transaction costs • Large projects need to actually come online & actually deliver
electricity (in California 7GW of PPAs signed but only 100-200
MW have come online)

12

MW Size Solar PV Plants – Cost Reduction Opportunities 13

Many incremental opportunities for cost reduction Balance of System (BOS) cost can be
are available across the value chain reduced by Rs. 10/W – Rs. 40/W

3/16/2011
>50% Reduction in LCOE is possible using
new innovation

13

Solar PV Module Manufacturing 14
Module Production Processes
Throughput
Line Steps
•For typical dimensions of a module, possible to cure 3 modules per run
1) Cell Testing In the case the module manufacturer is not •A run is around 20 minutes, depends on curing time of the material
sure about the quality of the cells used
2) Cell Sorting Cells are sorted into performance groups •Single‐stack laminators usually designed for 10-20 MW production
capacity

3/16/2011
3) Stringing Cells are aligned and ribbon is deposited •Multi‐stacks laminators designed for bigger capacities, like 25 MW
straight lines

4) Busing Cells are connected by soldering string ribbons Lamination Area
•Effective lamination area is actually not an issue for laminators

5) Lamination The EVA, the cells and the back sheet are •The module makers are free to choose the size of the laminator
bonded together •No trend from module makers to ask for very large area. Except in thin
film
6) Framing The laminated assembly is framed •where AMAT’s technology require equipment able to process 5.7m²
modules
7) Module Testing The final module is placed in a sun simulator in
order to test its performance Uptime
Process •Uptime an important parameter for the customer to choose their
Solar Cell
equipment
Repeats
Cell •A key parameter to have a good uptime is the cooling system for the
Module Testing & modules located after the lamination unit. Then, the lamination area
Sorting keeps the operating temperature

Few Points to Note
Module
Testing
Stringing • Amorphous cells – Obsolete , low efficiency 6-8% - low
cost – low life
• Mono/Multi crystalline – proven technology, long
life, high efficiency 18 – 20%, high price
Framing Busing
• Thin Film Cells – emerging technology , yet to prove
commercial , high efficiency 13- 16%, low price, long
life – yet to mature commercial scale
Lamination
• THE FUTURE WILL BE THIN FILMS WITH EFFICIENCY
18% AND PRICE USD 1 PER WATT BY 2013…
14
Excerpts from Ragunathtan’s @ Solkar (ragu@solkar.in) presentation @ IIES 2011

Solar PV Project Financing 15

From Banker’s Perspective of
Debt Solar PV Debt Proposal
• DPR with proven technology tie up
• PROJECT

3/16/2011
• PPA
• PROMOTER • Tariff, Discounts Rs.10.95 against Rs.17.91
• DEBT : EQUITY • NVVN or Gujrat Model
• VIALIBILITY • D : E -- 70:30  60 : 40  50 : 50
• TENOR, DSCR

• DSCR – 1.75  1.50
• STATUTORY CLEARANCES • Tenor
• SECURITY • Technical Evaluation by Independent Technical
Consultant acceptable to the Bank
• EPC Contract : Fixed Time – Fixed Cost
Key Take Aways • Credentials of PV Module Suppliers
• Domestic Suppliers – Guarantees
• The Banks are not skeptical on PV funding. Several
proposals of PV projects with sizes between 20-25 • Health of DISCOMS
MW are being appraised by SBI. However, this being a • Capacity Utilization Factor, Radiation Data reliability
sunrise sector with no industry benchmark data, the
projects will undergo in depth due diligence by the • Evacuation set up
Banks • Off Grid Captive Units appraised on the basis of
• Unsure about health of Discoms & Govt backed overall cash accruals of the business entity
guarantees to buy electricity at Rs. 17/unit for 25 years
• Promoters should try to de-risk the business proposal
for the bankers

MID CORPORATE SBU OF SBI CATERS TO CLIENTS WITH CREDIT REQUIREMENT OF Rs.10 Cr AND ABOVE

15
Excerpts from Abhijit’s @ SBI (abhijit.c@sbi.co.in) presentation @ IIES 2011

PMANIFOLD – GROWTH SOLUTIONS FOR EMERGING BUSINESSES 16
RESEARCH, ONLINE/OFFLINE STAKEHOLDER ENGAGEMENT & CONSULTING

pManifold Energy
Practice Team

3/16/2011
• Smart Distribution
• Energy Conservation

• Green Generation

Thank You

• Rahul.Bagdia@pManifold.com (+91 95610-94490)
www.pManifold.com
• Akash akash@indisIIc.com (+91 97181-12443)
www.indis-energy.com
16

pManifold Indis_Solar PV_IIES_Workshop_report

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