New Hampshire, USA -- India's solar market is on track to be roughly the same in 2013 as it was in 2012, which is surprising given the ~20 percent overall growth projected for global solar demand. But optimism and expectations continue to emerge for India's solar potential.
The latest analysis, Mercom Capital's quarterly market update, suggests 1,750 MW of solar will be installed in India next year, including 420 MW of CSP pushed out from this year. That's coming off of a somewhat quiet 2013, defined by high inflation, rising module prices and a depreciating rupee, and low bidding in reverse auctions.
Still, word on the ground is that developers think the current model was working, and that a five-year viability gap funding period will make it harder for all but the largest companies to get financing, says Mercom's Raj Prabhu. Manufacturers, meanwhile, are said to be upbeat, hoping for domestic content requirements to continue, and claiming utilization rates far above media speculation (70-100 percent vs. 25 percent), and some are making panels for Chinese companies to be sent to Europe. And interestingly, utilities are said to be pushing back against large companies' captive power projects, fearful of losing those big customers despite an unwillingness to ensure reliable quality power.
The comprehensive report also takes snapshots of JNNSM Phases I and II, and individual state policy highlights, from Gujarat's still-in-debate retroactive tariff cuts to net metering in Andhra Pradesh to a 10,000 rooftop solar install program likely completed by year's end.
IN THE NEWS
EU Tacks 42 Percent Tariff on Chinese Solar Glass: The European Union has imposed tariffs as high as 42.1 percent on solar glass from China as penalty for allegedly dumping product in Europe below cost and hurting domestic producers. It's a separate decision from the broader restrictions levied this spring, and affects just a portion of the overall market, but nonetheless will probably heighten trade tensions all over again.
Is Japan Heading for a Solar Slump? The surge in solar energy development is drawing comparisons to a "gold rush," but within that is concern that too many lack experience and expertise to turn dreams into reality. Less than 15 percent of projects approved for the government's latest subsidy approved last summer have been put into service, according to METI, which has launched an investigation into what's holding things up -- from lack of funding to grid interconnection complexities to the reliance on domestic equipment and suppliers. Nevertheless, solar development continues to push ahead. SoftBank and Mitsui are building two solar power stations in Japan, a 22MW one in the southwestern prefecture of Kumamoto and a 20-MW one on Fukuoka prefecture, both expected to be online by March 2015. Suzuki is planning an 18-MW plant in an industrial park in Shizuoka prefecture to start in the fall of 2015, and is eyeing two more locations nearby. And Eurus Energy is developing a 14-MW project on a golf course straddling the Miyagi and Fukushima prefectures.
Tata Power Eyeing More Wind, Solar: Tata Power is pledging $260 million annual investment in renewable energy and wants more solar and wind energy acquisitions. Since last month's purchase of a 39-MW wind farm in western Gujarat from AES "we have got a lot of interest from other owners of solar and wind operating assets who want to exit their investment," according to Rahul Shah, the chief of business development for India business and renewables. Tata operates about 400 MW of wind projects and 30 MW of solar but is eyeing up to 370 MW to take on, possibly starting by the end of the current fiscal year in March 2014. Margins are about half that of coal and gas plants (12-18 percent vs. 20-30 percent) but performance is more predictable and thus so are its returns, he added.
First Solar Makes Japanese Inroads: First Solar has pledged to invest $100 million in Japan to develop solar power plants both by itself and with local partners. First up: a 1.4-MW (DC) solar project in Kitakyushu-shi, with operations commencing in the first quarter of 2014. The company holds 100 percent equity in the project, with Obayashi and Yaskawa Electric doing the actual building. The company also has inked a distribution agreement with JX Nippon Oil & Energy, including developing and manufacturing its recently-acquired TetraSun high-efficiency technology.
IBM, Bharat Light Target India Wind Farm Output: IBM and Bharat Light & Power have inked a 10-year deal to use IBM cloud computing technologies and analytics to better manage data generated by its renewable power generation sources, which they say will "significantly improve BLP's Plant Load Factor" (no specific number given) and increase power generation capacity. Bharat currently owns about 200 MW of wind farms but is expanding into solar, biomass, hydro, and eventually energy storage.
Battery storage in Japan: Tohoku says it will build a 40-MW (20 MWh) lithium-ion battery demo system at the Tohoku Electric Power substation in west Sendai. It's expected to be online by February 2015.
Taiwan Tweaks Solar Tariff Cuts: Taiwan's tariffs on solar energy will drop by 12.45 percent for the first half of next year, slightly less than a proposed 14.23 percent cut. Solar power suppliers had argued the stiffer dropoff would exacerbate pricing competition and rising maintenance costs. An additional 2-3 percent decline in the tariff reduction is planned for the second half of the year.
SunPower Targets Solar Water Pumps in India: SunPower has launched a new product with specific application: a solar PV-based water pump designed for rural agriculture, designed by U.S. and Indian teams, to help farmers with year-round cultivation and daytime irrigation.
LDK Adds Financing, With Conditions: LDK Solar has secured financing with 11 commercial Chinese banks for RMB 1.56 billion, but the proceeds are strictly to be used for onshore operations within Jiangxi Province, ramping manufacturing operations and not to service any debt.
Biomass in India: The Haryana Renewable Energy Development Agency (HAREDA) has commissioned a 9.9-MW biomass plant in Khurawata village, Mahendergarh district. The project on 15 acres will use mustard and arhar stalks and other agro fuel. Up to three more biomass projects of 12 MW each are being installed in the state now.
Toshiba, Orix Team for Geothermal in Japan: Toshiba and Orix said they will jointly establish a new geothermal power company in Nakao, Okuhida Onsen, Gifu Prefecture, majority owned by Toshiba and with total capital of ¥198 million. After assessing commercial viability of the hot spring sources, the plans are to build a 2 MW output plant to start online in 2015.
A DEEPER LOOK
India Going All-In for Centralized Solar? The Ministry of New and Renewable Energy's (MNRE) target of 2.52 GW of solar capacity by 2017, which could rise to 3.6 GW if solar thermal capacity is shifted over to PV as well, says Bridge to India. Slightly less than half of that is already spoken for, from Phase I/batch one of the NSM and the first of several massive 1 GW ultra-mega projects. Absent any real centralized support for distributed generation, there's a risk that this solar profile will be overwhelmingly centralized, the analyst firm warns, even though arguments are strong to put generation out where it's being consumed.
In the battle to bring India's biggest solar projects online, here are some of the contenders. Bharat Heavy Electricals, the nation's largest power equipment supplier, will soon start accepting bids for a 1-GW plant, the first of a proposed 4-GW solar park in Sambhar, Rajasthan state. Meanwhile, A separate 4.7-GW project planned in Kharaghoda, Gujarat state, would include 700-MW of wind power as well. And a 5-GW project is said to be in the works for the desert Ladakh region of Jammu and Kashmir state, on 20,000 acres of land.
ON THE HORIZON
Tasmania Pledges 100 Renewable Energy: The Tasmanian Government is aiming high for renewable energy usage, targeting 100 percent of its power mix by 2020. It's part of a broader plan, dubbed Climate Smart Tasmania, that includes energy reduction across multiple functions and departments, and a 35 percent reduction in carbon emissions.
IN CASE YOU MISSED IT
Lead image: Statue in Ranakpur temple, Rajasthan, via Shutterstock