India is a 12.

8GW solar opportunity until 2016 New market – new chances

11th October 2012
Dr. Tobias Engelmeier tobias.engelmeier@bridgetoindia.com

Copyright © 2012 by BRIDGE TO INDIA Pvt Ltd. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means — electronic, mechanical, photocopying, recording, or otherwise — without the permission of BRIDGE TO INDIA Pvt Ltd. This document provides an outline of a presentation and is incomplete without the accompanying oral commentary and discussion. CONFIDENTIAL

Hamburg and Munich • German competency and local expertise • Entrepreneurial approach • Solar PV as a core knowledge area • Three mutually supportive business segments Policy Projects Financing Industry Market Entry Market Potential Competitor Landscape Market Strategy Capital Investments Remittance PD Due Diligence © BRIDGE TO INDIA.Our business BRIDGE TO INDIA specializes in supporting international solar companies and investors in India BRIDGE TO INDIA’s key fields of expertise are: About us • Founded in 2008 • Based in New Delhi. 2012 2 .

Installed PV capacity India has more than 1GW of installed capacity already. another 20% in Rajasthan – both in the West • • © BRIDGE TO INDIA. 2012 3 . Solar installed capacity in India Key Facts • Currently market growth centres on grid-connected plants (FiT) This trend is expected to continue over the next three years Around 70% of installations are in the Indian state of Gujarat.

4 GW Power sold directly to end consumer 2. but regulatory questions remain ➡ Non-subsidized segments will grow: solar replacing diesel as well as grid power Total: 12. CEA © BRIDGE TO INDIA.8 GW market until 2016 MW 4500 4000 3500 3000 2500 2000 1500 1000 500 0 Expected installed capacity additions 2012-2016 (year on year) Segments are driven by different factors ➡ FiT segement: NSM – will likely be discontinued after 2017 ➡ RPO / REC segment may provide good opportunities.2 GW 4. CERC.8 GW >1GW already achieved 1. based on data from MNRE.PV market projection We expect India to be a 12. 2012 4 .0 GW 3.5 GW Power sold (mostly) to the grid 2012 Telecom Towers 2013 2014 2015 RPO-Driven 2016 FIT Driven Policy Based Grid Parity Commercial Diesel Parity (commerical+backup) Source: BTI market analysis.7 GW 1.

E&Y .7 52.1 +48% 23 China 12. based on data from BTI market model.7 Germany ➡ Ranked 4th in the Ernst & Young country attractiveness index ➡ Political frontrunner in the past ➡ Insecurity about future of the EEG ➡ Ranked 1st in the Ernst & Young country attractiveness index ➡ Insecurity about future supply of Chinese modules.Global PV markets India is one of the most attractive solar markets globally Global GW markets Annual growth (2011-16) +143% ➡ ➡ ➡ ➡ Key drivers Ranked 2nd in the Ernst & Young country attractiveness index Market segments reach grid parity and are viable without FiT No political incentives needed for future projects Sets RPO/ REC targets to further boost the market 0. various 4.15 12.8 India +16% 24. 2012 5 Installed capacity.5 +13% 23 Italy Installed capacity. which may result in higher prices and a lack of available technology ➡ Sophisticated financing ecosystem ➡ Ranked 3rd in the Ernst & Young country attractiveness index ➡ Insecurity about political development towards foreign investments and exchange rate fluctuations ➡ Ranked 6th in the Ernst & Young country attractiveness index ➡ Cut back of FiT in 2011 ➡ Insecurity about future development of the market Source: BTI market research. GW 2016 (e) . Reuters.2 +49% 30 USA 3. GW 2011 © BRIDGE TO INDIA.

2012 6 .Market drivers Solar power makes fundamental sense in India Structural power deficit gap: 13% 1500 Price of commercial electricity (INR/kWh) 12 10 8 6 4 2 plus 6 % pa Rising power costs Driven by rising global energy costs and Indian politics Trend expected to accelerate 1000 500 High and rising power deficit By 2050: lack of 600 GW capacity BU Demand Supply Source: CEA Source: State tariff orders 3.5 1 minus 47% pa Falling solar costs Driven by sharp price decline of PV modules in last months Trend expected to slow India Germany High irradiation Very high irradiation levels across the country Around twice as high as Germany Source: BRRIDGE TO INDIA research Source: SolarGis  Solar power is already commercially viable in India – without subsidies  This trend will accelerate.5 3 USD/ Wp 2.5 2 1. creating a vast market in India © BRIDGE TO INDIA.

2012 7 .Underlying market logic for our idea The world’s largest power failure in India drives new business models (600m without power in July 2012)  Power security is a key concern to India’s businesses  The grid is the main weakness in India  Development of local. semiinterconnected meso-grids  We will see a new breed of local utilities/IPPs  The key strategic asset in the future is the access to customers/power consumers © BRIDGE TO INDIA.

the case for solar becomes stronger 1 Indian States Market trend 1 Falling cost of solar power will allow us to offer lower tariffs 2 Rising power tariffs will make solar a more attractive alternative Source: CERC. SERC tariff orders © BRIDGE TO INDIA. solar reduces the cost of power wherever the customer pays more than EUR 0. 2012 8 .11/kWh (dependent on local irradiation levels) ➡ Wherever supply security is low and diesel power (currently 60 GW back-up systems) is used.Indian tariff structure Average tariff (in EUR cents/kWh) Solar is already competitive with grid power in some regions of India 16 14 12 10 8 6 4 2 Commercial Industrial Domestic Our model works today ➡ Today.

047MW Projects under execution Projects likely to be cancelled Opportunity (with DCR) Opportunity (without DCR) Source: BRIDGE TO INDIA project database FIT Driven Non-Policy Based REC based projects 1. 2012 9 NSM phase two • 1GW allocations in 1st quarter of 2013 (with DCR) Uttar Pradesh policy • 150MW in 2nd quarter of 2013 (without DCR) Projects outside policy • Projects outside policy based allocations.only six developers involved – key client approach) © BRIDGE TO INDIA.150MW 392MW RPO based projects Grid Parity Commercial and industrial Telecom Towers 185MW 71MW 50MW Source: BRIDGE TO INDIA market model Opportunity (with DCR) • Madhya Pradesh allocations ( 225MW) Opportunity (without DCR) • Karnataka (60MW) • Odisha (25MW) • Direct allocations (400MW in Andhra Pradesh. Bihar and Uttar Pradesh .Near term opportunities In 2013. Jharkhand. RPO based projects.3GW in the next year 00 Existing opportunities (2012-13) India sales opportunity: 710MW this year Installed capacity FIT Driven Policy Based 475MW 485MW 225MW 180MW 677MW 1. These will include projects based on new business models around REC mechanism. commercial and industrial parity projects and telecom towers (without DCR) . opportunities will come primarily from NSM Phase II New opportunities (2013-14) India sales opportunity: 2.

Our customers We have serviced many international solar players with our Indian market knowledge Solar Companies C o n g lo m e ra te s I n st i t u t i o n s Government of Madhyapradesh © BRIDGE TO INDIA. 2012 10 .

com/our-reports © BRIDGE TO INDIA.bridgetoindia. download our free reports from our website INDIA SOLAR COMPASS October 2012 Quarterly update on key drivers • Assessment of current projects and policies • Upstream industry analysis • Outlook on the market INDIA SOLAR HANDBOOK June 2012 A first hand introduction on: • Indian solar market • Policies • Manufacturing • Future potential INDIA SOLAR DECISION BRIEF September 2012 REC Mechanism in India • Current market status • Business models • Future projections www.Our publications To read more about the Indian solar market. 2012 11 Download for free on: .

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