At the moment India has an installed capacity of only about 3 megawatts (MW) of grid-tied solar electricity, but Moser Baer PV (MBPV) has plans to change that.
"In fact, there is so much interest today from potential investors in solar farms that we are tying them in MOUs that our module capacities and order books are properly planned out."
— Ravi Khanna, CEO, Moser Baer PV
The company, a relatively new entrant in the solar photovoltaic (PV) market, has recently announced a series of new initiatives. These include setting up India’s largest grid-connected solar farm in the sunshine abundant state of Rajasthan, and increasing production capacities.
MBPV announced that it had partnered with the Rajasthan Renewable Energy Corporation (RREC) to set up a solar farm of 1-5 MW capacity in the state. At US $4.5 million per MW, the total investment for this farm will be US $25 million.
Mr. Ravi Khanna, CEO of MBPV said, "As per our MOU [memorandum of understanding] signed with the Rajasthan government back in Nov 2007, we are committed to continue working on the solar farm in Rajasthan. And for this, we are in the process of tying up the investors/partners for this project. Moser Baer will be providing the complete turn-key solution for this farm."
The company is awaiting the announcement of suitable tariffs for its sale of electricity to the state utility. It has other initiatives currently in the discussion phases with other states and investors. "In fact, there is so much interest today from potential investors in solar farms that we are tying them in MOUs that our module capacities and order books are properly planned out," Khanna said.
Rajasthan already generates about 10% of its electricity from non-conventional private units. According to a press release issued by MBPV, "Rajasthan offers significant opportunities for renewable energy projects and also has large natural resources conducive for setting up such non-conventional energy projects in the state."
India’s economy is growing fast, nearing a double-digit growth rate. To fuel this growth, more commercial-use electricity is needed in addition to meeting residential demand. India has supply shortages in both residential and commercial electricity, including peak time supply. Solar electricity may help fill this demand gap, especially in peak time demand. Many of India’s remote villages are not connected with electricity grid, and solar offers a solution for this, along with other local small scale renewable electricity generation technologies.
The government of India has announced subsidy plans of US $750/KW for installed capacity of residential or commercial use, with a maximum of US $1,250/household. For community and institutional use the subsidy is higher, at US $1,250/KW. The government has also announced feed-in-tariffs of up to US $0.30 per unit (KWh). This is up to 75% of the generation costs of PV, which range between US $0.38 to $0.75 per unit.
Commenting on policy support for PV, Khanna said, "We believe the recent policy announcement is a very positive and welcome step by the Indian government. Though we will continue to work with them to make it a real success, there is no doubt that once a few MWs are installed in India, we can see the beginning of a much wider growth for the PV industry. Already, we are seeing the spiraling effects of this with many state governments like Punjab, Rajasthan, West Bengal, etc. getting in the process to formalize solar tariffs."
India has abundant solar resources, receiving about 3000 hours of sunshine every year, and has a potential of about 20 MW per sq km, according to energy researcher Mr. Shirish Garud at The Energy and Resources Institute (TERI) in New Delhi. However, the high price of PV electricity remains an issue.
With higher volumes and economies of scale the prices are expected to come down as the market expands in the next few years. "We expect the per unit price to drop to US $0.12 to $0.15 cents in the next 3 years. Also, as we have big plans for thin films as well, we don’t expect any delays in this target at least for Moser Baer. We also have a considerable focus on reducing BOS (Invertors, Structures, etc.) parts cost which will help us achieve our target," said Moser Baer’s Khanna.
PV-based electricity is expected to remain a very small share of total electricity generated in India in the near future. Therefore, even with higher costs it is not expected to add much to the averaged price of electricity. "It may add only about US 1/40 cent to averaged cost of electricity in the short-term. It is important that we invest in solar now, and the costs will come down as the technology and market develops in the future. It is very good option to develop for the future," Garud said.
Moser Baer PV is fueled by the enthusiasm for PV. It is planning to expand its plant in NOIDA near New Delhi, and planning a new plant near Chennai. The major expansion will be in thin-film capacity going from the present 40 MW to 600 MW by 2010, with a total investment of US $1.5 billion. An immediate doubling of crystalline silicon cell capacity from 40 MW to 80 MW is expected by the end of March 2008.
The company has also invested in solar technology R&D through stakes in three U.S.-based companies: Stion, Solaria and SolFocus. MBPV hopes to benefit from R&D by these firms in concentration technology and nanotechnology to increase PV output and reduce the of size of PV producing units.
The growing global market for PV, which is expected to generate revenues of up to 16 billion by 2012 by some estimates, is what MBPV is banking on. Most of the demand for MBPV is expected to come from the U.S. and the EU but MBPV’s expectations for Indian market are also high, 1,000-2,000 MW by 2010.
PV offers many potential applications in India. According to Garud, "The telecom industry has used it [PV] to power relay systems and telephone exchanges in rural areas. Railways have used it for remote applications, signaling and for operating unmanned gates," he said
Use in telecom towers is another potential application. Dr Bharat Bhargava, a Director in India’s Ministry of New and Renewable Energy said that in India, "Solar makes possible stand-alone, distributed and decentralized electricity available to rural, remote, difficult areas and unmanned applications. The rule of thumb today is that where reliability and unmanned operation are important — for example, telecom etc — solar offers the best solutions."
With the flexibility of PV in generating electricity from milliwatt to megawatt it offers a wide range of applications. Moser Baer PV focuses primarily on large scale modules and commercial applications. However, solar lamps and other consumer applications of PV are a large potential market in India, especially in underpowered rural areas and high-tech uses like personal and business computing.
Anupam Tyagi is a RenewableEnergyWorld.com Indian Correspondent based in Ghaziabad, India.