International and Indian Solar Photovoltaic Sector Outlook: Current scenario, Investment and growth Trajectory

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Power bucket of the country, how much Solar Sector has attracting the investment through different routes and What would be the growth Trajectory for next couple of years.

Lets have quick outlook of International and Indian and International Solar markets are performing currently, what are the drivers,how much solar PV in overall Power bucket of the country, how much Solar Sector has attracting the investment through different routes and What would be the growth Trajectory for next couple of years.

Solar Industry Outlook :Generation, Investment & growth Trajectory 

1. Market driver: Solar Industry

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2. Global Scenario : Current Development scenario

• Renewable accounts 28.90% of Global Power generation capacity & 23.70% in End Electricity demand

• Total RE Installed capacity is ~1861 GW till June 2016 Globally

• 148 GW Renewable power has been connected to the grid added during Yr 2015-16

• ~320 GW of Solar PV capacity has been installed till June 2016

• CAGR of Solar PV is ~34.80% YoY from past 6 years and ~17.16~17.50% from past 3-4 years”

• China added maximum Solar Capacity of 18 GW in H1 2016-17 and India ~3.40 GW in year 2015-16

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Source:Global Status Report 2016,IRENA

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Source:Global Status Report 2016,IRENA

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Source: GTM Research and IHS 2016

3. Global Scenario of Investment in Renewable sector (solar PV and Wind)

•Investment in Solar PV has increased up 12% from FY 14-15 to FY 15-16

•In Year Global Investment in clean Energy was $ 348.9 Bn (+10.80 %)

•Investment in Developing countries Up by 48% (specially in Wind+56.2% & Solar PV +47.05%

•Q2 2016, Global Investment +12% higher in Q1 2016, -32% lower Q2 2015 (Due Policy change & lower Energy demand), Cheaper CAPEX cost of solar

•Future investment will increase 7 fold by year 2035 in Solar PV & overall 2.5 times

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Source: Frankfurt School of finance & mgmt, BNEF

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Source: Frankfurt School of finance & mgmt, BNEF outlook 2016 , UNEP All in $Bn)

• Europe for H1 up +4% at 33.4

• Brazil +36% at 3.4, Other region were down china -34% at 33.7,India -1% at 3.8, Rest of Asia pacific -47% at 12.1 ,US by -5% at 23.10

• Q2 2016 Investment USD 61.6 Bn

• Solar PV due to lower demand in Electricity , Shift in Small scale Project to utility scale large Solar Project (Down in terms of CAPEX & OPEX), 10% reduction in Project cost (Module 7-8% & BoS 2.5%-3%)

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Source: Bloomberg New Energy Finance Outlook 2016

• VC and PE type of investment has been made significantly progress as Clean energy sector is one of the high yield , less risk and well policy framed market, i mean very much secured and stable return based market

3. Global Scenario: Solar industry growth

• Market Size would be 9.35 times bigger than current in next 5-6 years

• As per GTM research Solar PV capacity will be 7--730GW (450-500 GW by 2022)and as per IHS it would be ~720-750 GW in next 5-6 Year.

• India (100 GW), China (180-190 GW), USA, Japan, would be leading country in Solar Sector

• This year pace of installation might be lower in China, Japan as government has reduced the FITs by 20-30% in China and ~30% in Japan that will reflect 18-20% lower interest in terms of development but India (23 GW), USA ,UK

• Significant reduction in LCOE (20-30%) shall be seen in next 2 year due to falling of Average selling price of module due to oversupply, adoption of Single axis tracker, MPLE, 1500V , Share of Fixed and Single axis tracker in same Solar Project with optimal balance after ward the overall LCOE would be stable

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Source: GTM Research Global Solar Demand Monitor 2016,IHS 2016 (all figures are in GW)

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Source: IHS Markit 2016, GTM Research 2016 (Annual Solar PV installation forecast)

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Source: as per World Energy Outlook 2016,IEA PV Roadmap 2016-2050


4. Domestic (Indian) Solar Market Outlook: Current Development

• Overall Solar PV Installed capacity is 2.87 % mixed with Total Installed capacity of India October 2016 & 1.47% penetration in End Energy consumption

• Currently India is having 8.75 GW of installation capacity from Solar PV and is expected to grow by 5 fold as MNRE GoI has set up the vertical moving target of 100 GW up to 2022.

• 100 GW is breakup in two major segment 60 GW Ground mount (20 GW Solar park) and 40 GW Rooftop (OPEX,Capex), Mini and Micro grid

• Leading states are Andhra Pradesh, Telangana, Tamilnadu, Rajasthan, Gujarat, Uttar Pradesh,Karnataka and other 2-3 states are having ~80% of total share in installation capacity from solar.

• Strong Project development/ Tender pipeline ~19-20 GW by End to December 2016 where 7-8 GW is under development.

• CAGR of ~27.10% YoY has been observed from past 5 years and is expected to increase by 34.33% YoY in next 5-6 years

• 11068 MW is expected to be commissioned in Q4 2016-17 and Q1 2017-18

• 1900 MW in Telangana ,1950 MW in Karnataka, 1395 MW in Andhra Pradesh, 910 MW in Rajasthan, 570 MW in Madhya Pradesh, 550 MW in Punjab states are having largest execution pipeline

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Source: Ministry of New and Renewable Energy

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Source: MNRE GW Implementation status


5.Domestic (Indian) Solar Market Outlook: Investment scenario

• Green Energy development commitment of 266 GW were received during RE Invest conference in year 2015

• 40 major banks, NBFCs, have been made the commitment for 78.75 GW of renewable power up to 2022

• 18.63% (71,201 Crore finance and 29, 529 crore disbursement ) has been made as on 31st march 2016

• Attractive Govt. schemes ie. Solar park, VGF schemes,Exemption, so called single window clearances in many states

• Between April 2000 and March 2016, the industry attracted US$ 10.48 billion in Foreign Direct Investment (FDI) as Ministry of Finance

• Indian Energy and Power market is having potential of 15 trillion in next 4-5 years.

• Strong Demand and stable government policies

• Competitive Cost of generation compare to Wind, Some of the coal based power plants

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Source:http://niti.gov.in/writereaddata/files/writereaddata/files/document_publication/report-175-GW-RE.pdf, IBEF


6.Domestic (Indian) Solar Market Outlook: Growth trajectory


• India need to add YoY 15-16 GW/year to achieve the 100 GW target up to year 2022

• As per revised national tariff policy, GoI is targeting to increase the RPO up to 8% in Year 2022.

• Highest installation would be in northern region. UP, Rajasthan, Andhra Pradesh, Tamilnadu, Madhya Pradesh, Karnataka would be leading states.

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Source: MNRE ,Niti Ayog

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http://pib.nic.in/newsite/PrintRelease.aspx?relid=153951

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http://pib.nic.in/newsite/PrintRelease.aspx?relid=153951

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Source: Niti Ayog
By Ashish Verma. Ashish is a solar energy enthusiast and a regular contributor.
Disclaimer: The views above are strictly those of the author and do not reflect those of any other organisation or individual or this publication.


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