Organización Internacional para la Normalización (ISO) 112

India’s Jawaharlal Nehru National Solar Mission (JNNSM) was launched in 2010.

JNNSM adopted a 3-phase approach for the solar technologies deployment; Phase 1 was until 2012-13, Phase 2 is from 2013 to 2017, and Phase 3 is from 2017 to 2022.

The solar capacity targets for each phase are depicted in Table 4.1 below [91].

Table 4.1: Solar capacity targets for each phase in India [91]

Phase 1 was divided in two batches of reverse auctions. The bidding processes included feed-in tariffs (FiT) and long-term power purchase agreements (PPAs) to the selected investors. Table 4.2 summarises the solar capacity of Phase 1 including projects assigned under different schemes and the FiT prices [5].

Table 4.2: Solar capacity of Phase 1 [5]

(exchange rate of 1 Rs= £0.0131, mean rate of Phase 1 (2010-2013) [92]. For example, the CERC tariff for PV in pound sterling for that period would have been £0.23 while the lowest PV

tariff would have been £0.14.)

Generally, there were various incentive schemes in India after the launch of JNNSM.

Namely, some of them were: Gujarat Solar Policy Phase 1, Gujarat Solar Policy Phase 2, National Solar Mission (NSM) Batch 1 Phase 1, NSM Batch 2 Phase 1, RPSSGP (Rooftop PV and Small Solar Power Generation Program), Direct RPOs (Renewable

Purchase Obligation) Project, Migration, Generation Based Incentive (GBI), REC (Renewable Energy Certificate) Mechanism, and Demo Project [12]. Specifically for Phase 1, which was completed during 2013, the schemes can be categorised as follows: the Migration, the RPSSGP and the NVVN (NTPC VidyutVyapar Nigam).

NVVN is an agency approved by the Indian government in order to fund grid-connected solar power applications. Hence, NSM Batch 1 and Batch 2 projects were selected by NVVN. Batch 1 solar projects were in 2010-11 and their capacity was fixed at 5 MW per project while Batch 2 projects (2012-13) have a minimum capacity of 5 MW up to 20 MW per project. Moreover, the total installed capacity per bidder was limited up to 50 MW. The Migration scheme included solar applications, which started before 2010 in order to give them the opportunity to “migrate” from the former financial arrangements to the schemes proposed by JNNSM. Moreover, the RPSSGP was set for small rooftop plants of capacity less than 2 MW, and it was also assigned under GBI. The GBI equals the difference between the tariff determined by the Central Electricity Regulatory Commission (CERC) or State Electricity Regulatory Commission (SERC) to the base rate of 5.50 Indian Rupees (Rs) per kWh for the financial year of 2010-11 (then is escalated by 3% every year) [5].

In general terms, all the schemes that have been introduced up to date can be sorted in three categories; the schemes under the Central Government of India, the schemes under the individual State Governments and the Renewable Purchase Obligation and Renewable Energy Certificate schemes, which were introduced through the CERC of India for all the renewable energy projects according to the National Action Plan on Climate Change (NAPCC) [93, 94].

Regarding the NAPCC, 15% of India’s power has to be generated by renewable energy sources by 2020. Particularly, for solar power the general target is 3% while the SERCs have set individual state targets. The REC mechanism has been introduced in order to fulfil these targets. At the moment, one certificate is provided for every 1,000 kWh of renewable electricity fed into the grid. The obligated entities (utilities, open access buyers of power and large captive power producers) can buy these certificates to fulfil their obligation. So far, this scheme is not successful, since the obligated entities do not always comply with the RPOs and this inadequacy is rarely penalized. Hence, it is possible that this scheme will be revised in the future [93].

Most of the government related incentive schemes have concerned utility-scale grid-connected solar projects in the form of viability gap funding (VGF) or FiT, with the latter preferred by state related schemes as well. The VGF is “a capital subsidy provided to the project developers in order to help them reach a viability threshold at a pre-fixed tariff. The disbursement is linked to performance measures” [93]. Contrary, capital subsidies for rooftop projects or off-grid projects have not been fruitful yet. Finally, tax incentives, such as the accelerated depreciation, have their share in the Indian PV market deployment [93].

Batch 1 of Phase 2 has started and the incentives offered by JNNSM were in VGF form. Moreover, in order to expand the solar market from the utility-scale to medium and small scale projects, JNNSM allocated 50 MW of grid-connected rooftop projects in 2014 while several states “initiated rooftop solar policies and allocations in 2013” [93].

For example, the state of Kerala has initiated a policy for 10,000 rooftop installations of 1 kW each, the state of Gujarat has announced 25 MW of rooftop projects in total, which will be installed in 5 main cities, and the state of Tamil Nadu announced GBI incentives for 50 MW of grid-connected rooftop projects. Further to these, some states have announced plans for net metering policies in order to allow the user to feed power back into the grid. Gujarat state, which is the pioneer state in the solar incentive policies and the first in terms of PV installed capacity, introduced a gross metering policy, according to which all the generated PV electricity is sold to the grid [93].

Specifically for domestic applications, the Ministry of New and Renewable Energy (MNRE) of India has sent a proposal to the Ministry of Finance in order to introduce tax incentives for roof-mounted domestic PV installations. Currently, the owners of such systems do not receive any tax benefits [95]. Finally, 100 MW of PV projects, under the domestic content requirement (DCR) category, are expected to be announced in the near future [93]. DCR policy requires c-Si module technology installations, which is produced by Indian manufacturers. The thin film manufacturing industry in India is still at its infant stage [91].

In addition to solar incentive policies, it should be mentioned that in India the electricity tariffs vary by state and by the type of consumer. A general categorization could be made according to the type of consumer. Hence, commercial consumers such as malls, office spaces, and retail outlets, are paying a commercial tariff around 11 Rs/kWh (exchange rate of 1 Rs= £0.0098, as per September 2014 [96]), which is the

highest tariff among the four categories. Industrial consumers, such as manufacturing facilities, are usually paying the second highest tariff (around 8 Rs/kWh). Residential consumers usually pay around 7 Rs/kWh and agricultural consumers usually receive subsidized tariffs or in certain locations they even receive a full subsidy for their power consumption [12]. The residential segment has the highest energy consumption in India. Hence, the adoption of PV systems will contribute to the grid power deficit.

However, as was mentioned above the residential PV market is still at a nascent stage [93].

Concluding, the finance availability is a vital challenge for the Indian solar market that has to be overcome. The two main reasons behind this challenge are the uncertainty of investors regarding the solar market and the lack of knowledge regarding the solar power generation over time. The latter is attributed to the lack of ground solar data and the limited recording of the Indian PV plants. There are many plants in India, which are not performing as expected and there is no clear knowledge on the cause that engendered this operational behaviour [93]. Hence, it is essential for the project developers to concentrate more on the quality of material, the execution, and the maintenance of projects. Further, the recording and the analysis of the data gathered from the PV plants are crucial for acquiring the technical knowledge, which is necessary in order for the expected and the actual PV performance to be compatible.

This improvement in the technical knowledge would also influence positively the financial market, as it would provide a more secure investment environment.