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Electricity has been a key to drive growth in almost all the business sectors. Coal due to its widespread availability was/is the primary source of generating electricity across the world. With rapid industrialization, the demand of electricity was increasing continuously which led to over-exploitation of coal. While the electricity demands were being met, the emissions from coal power plants had started posing issues such as global warming, ozone layer depletion, ozone hole, etc.

Summary

While replacing conventional irrigation pumps with solar-powered ones has the clear advantage of lowering costs, the pace of their deployment across India has been slow.A significant up-scaling of solar-power irrigation would provide multiple benefits to India in terms of:

  • providing distributed/end-of-grid generation;
  • providing distributed/end-of-grid generation;
  • reducing the need for heavily subsidised electricity to the agricultural sector, helping to alleviate financial distress at distribution companies (DISCOMs);
  • creating a positive alignment of solar generation with water irrigation time of use;
  • replacing the use of subsidised, imported diesel with the associated foreign exchange and reduced current account drain;
  • significantly enhancing India’s 100GW-solar-by-2022 mission;
  • lessening environmental impact;
  • expanding and diversifying farmer incomes; and
  • providing a sustained domestic and perhaps even an export opportunity for system manufacturing under the government’s “Make in India” campaign.

All that said, recent initiatives by way of the central government’s Kisan Urja Suraksha Evam Utthaan Mahaabhiyan (KUSUM) scheme and the Gujarat state government’s Suryashakti Kisan Yojana (SKY) scheme are steps in the right direction.

Demand for Sustainable Irrigation Far Exceeds Capacity

As India’s economy has diversified in recent years, agriculture’s contribution as a proportion of GDP has dropped to about 10%1. Yet about 70% of India’s rural households still depend primarily on agriculture for their livelihood, and 82% of farms are considered “small and marginal. Successful farming in India typically requires irrigation. Only 48% of the country’s “net sown area” is irrigated, however, the rest is dependent on the vagaries of nature. Of the country’s total net amount of irrigated land, 62% is watered either by relatively deep tube wells or other, more shallow types of wells. Most of these wells are reliant on electric or diesel pumps.

In June 2018, the Gujarat government introduced the Suryashakti Kisan Yojana (SKY), a pilot project to enable 12,400 farmers in 33 districts of the state to generate solar power—and to use part of that power for irrigation while selling the surplus to the grid for INR 7 (US$0.10) per unit for seven years and INR 3.50 (US$0.05) per unit for the remaining years. Under the initiative, farmers will contribute 40% of installation costs, while central and state governments will subsidize 60% of costs.

This program will enable more farmers access to better power supply for more hours of the day while increasing their agricultural productivity and their overall income. This model and could well adopted by other states and expanded nationally to drive the growth of solar-powered irrigation across India.

Clearly, it makes sense to replace existing electric and diesel pump sets with solar pumps. Some of the many benefits of replacing the current fleet of electric (21 million) and diesel (8.8 million) pump sets are summarised in the table 2.

The government of India could achieve 38% of its renewable electricity-generation target just by shifting from conventional pumps to solar irrigation pumps. Deployment of 5.5-HP solar pumps, on the other hand, would enable the government to achieve 70% of its overall renewable energy target while exceeding its solar energy goal of 100 GW of capacity, as also noted in a recent study by IWMI-TATA, Greenpeace India and GERMI.

The upfront cost of solar pumps, the current heavily subsidised supply of electricity to the rural sector, poor after-installation maintenance support and lack of awareness of the benefits of solar have combined to prevent most Indian farmers from shifting from less efficient, unsustainable modes of irrigation. Nonetheless, solar-powered irrigation offers huge economic and environmental benefits, and the recent KUSUM schemes by the central government and the SKY scheme by the Gujarat state government suggest that attitudes are changing.

The KUSUM scheme aims to deploy 2.75 million solar pumps as part of the first phase of implementation that will produce an additional 4 GW of installed solar power, thereby providing a material boost to India’s renewable energy deployments.The KUSUM scheme aims to deploy 2.75 million solar pumps as part of the first phase of implementation that will produce an additional 4 GW of installed solar power, thereby providing a material boost to India’s renewable energy deployments.An additional advantage of solar irrigation pumps worth noting: The distributed generation aspect of such systems provides significant grid network strengthening while avoiding over-reliance on land intensive utility scale solar projects, an especially sensitive issue in a country as densely populated as India.

Policywise, savings from fuel costs, electricity subsidies and foreign exchange costs present a significant incentive for an appropriately structured subsidy for upfront cost to accelerate deployment of solar pumps. Moving to solar irrigation can save as well on deadweight subsidies that keeps DISCOMs in financial disarray.Policywise, savings from fuel costs, electricity subsidies and foreign exchange costs present a significant incentive for an appropriately structured subsidy for upfront cost to accelerate deployment of solar pumps. Moving to solar irrigation can save as well on deadweight subsidies that keeps DISCOMs in financial disarray.Considering the declining trend in prices of solar modules combined with economies of scale, IEEFA sees the all-in cost of solar-powered irrigation as a strong argument for reducing reliance on the current expensive government-subsidized model. The strategy stands also to give a strong push to the government’s “Make in India” program as domestic manufacturing will grow on demand for solar pumps.

Fig 1: Policies Supporting Solar-Powered Irrigation in India

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Table 1: Irrigation Pumps in India

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Fig 2: Distribution of Wells

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Table 2: Benefits of Replacing Conventional Pumps with Solar-Powered Pumps

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Credits: India: Vast Potential in Solar-Powered Irrigation, IEEF Report, August 2018

 

 

Indian power system is undergoing a phase of transformation with the vision of the GOI for integration of 175 GW of renewables by 2022. Renewable energy is characterized by inherent issues like variability, intermittency & fast ramping etc. Thus, commensurate amount of flexible power reserves are necessary to take care of such variations in demand in coming years.

1. Demand for ground-mounted PV has been the primary driver of growth in the United States.

The United States has become one of the largest solar photovoltaic markets in the world, primarily driven by demand for ground-mounted systems. To put this in perspective, IHS Markit forecasts the U.S. market will deploy 37 GWdc of PV from 2016 to 2018, with ground-mounted systems accounting for over 70 percent of installed PV capacity during the period.

After the rush of development and installations in 2016 due to the late extension of the Federal investment tax credit (ITC), the U.S. PV market experienced decline in 2017 as the project development pipeline replenished and set targets on opportunities in 2019 and beyond. Due to recent trade policy dynamics, 2018 could lead to a second year of decline for the U.S. PV market if new tariffs result in significant price increases for PV technology. IHS Markit currently assumes that a new 30 percent tariff on imported PV cells and modules will be implemented in Q1 2018 [the decision was not made at presstime], increasing the base price of PV modules in the United States and negatively impacting demand for utility-scale PV solutions during the year.

 

But even as the market for ground-mounted PV in the United States faces decline in the near-term, it remains a multi-gigawatt opportunity. When the market experienced its greatest demand for ground-mounted PV in 2016, leading markets included familiar states such as California, North Carolina, Utah and Nevada. Increasingly, emerging markets are accounting for more ground-mounted PV demand in the United States. IHS Markit projects that Texas, Florida, Minnesota and Virginia will also be top markets in 2017 and 2018. Primary drivers of growth in such markets include the emergence of new renewable energy policy initiatives, attractive project economics for customers and utilities, and the developing interest of traditional energy companies.

2. Single-axis tracking has become the dominant technology choice for the ground-mounted market in the United States, primarily due to continued price reductions and improved energy yields.

IHS Markit fixed tilt solar stats

Single-axis trackers have become increasingly popular in the United States in recent years, growing steadily in market share from 2014 to 2016 to 70 percent of market share compared to fixed-tilt systems in terms of megawatt shipments. From 2017 to 2018, IHS Markit forecasts the share of fixed-tilt systems for ground-mounted systems will remain relatively stable as demand for such solutions remains strong in markets with lower solar resource, incompatible weather patterns, less than ideal land types, and when modules can be procured cheap enough to capitalize on the denser ground coverage ratio of fixed-tilt systems.

3. The competitive landscape for single-axis trackers continues to grow at a rapid pace.

Due to higher demand for single-axis tracking systems in the United States, many suppliers have jumped into the market, but none have a greater presence than the two leading suppliers: NEXTracker and Array Technologies. Both have a multi-gigawatt track record of shipments and installations in the United States and are seeking to grow in international markets as global demand for tracking systems continues to increase. Notably, the two suppliers utilize vastly different tracker designs that are able to meet different needs: NEXTracker’s architecture is distributed while Array Technologies is centralized. In basic terms, a distributed system can add flexibility in layout design and distribute the risk of failure to smaller portions of the system, while a centralized design can simplify O&M requirements and reduce the amount of motors needed.

In addition to the leading players, many other suppliers have also developed tracking systems. Some of the rapidly emerging domestic suppliers of single-axis trackers in the United States include SunLink, GameChange Solar and Solar FlexRack, all of which also maintain a portfolio of products dedicated to the fixed-tilt market. International tracker suppliers such as Soltec, Arctech and Scorpius are also vying to increase their market presence in the United States, in addition to their domestic markets of Spain, China and India, respectively.

4. New trends and opportunities for ground-mounted PV emerge as technologies and business models continue to evolve.

A notable trend emerging in the United States is demand for hybrid mounting systems for some customers. Such solutions are increasing in popularity in some markets, especially those that have been very active historically, because of the lack of suitable terrain to support the use of PV tracking systems due to the sensitivity of the components.

For sites that have a mix of suitable and unsuitable land for PV trackers, some customers are benefiting from working with suppliers that offer both fixed-tilt and tracker mounting systems to optimize the energy output of such projects, using the fixed-tilt mounting on rougher terrain and tracker mounting on smoother terrain. This type of solution caters well to suppliers such as SunLink, GameChange Solar and Solar FlexRack. Suppliers solely focused on tracking systems, such as NEXTracker and Array Technologies, continue to improve their products to allow customers to use their products on less than ideal land types as well.

An interesting solution developed by NEXTracker and its parent company Flex involves integrating energy storage with the design of the PV tracking system. The company has designed solutions around both flow and lithium ion batteries to service the needs various customers may have regarding their specific circumstances. The primary benefits energy storage can provide to PV customers include broader flexibility of the power generated by the PV system to better meet the load profile of their business and the ability to store energy that would otherwise be lost due to clipping by the power conversion system. NEXTracker’s solution goes a step further by applying the company’s in-house monitoring and software to optimize and manage the operations of the energy storage system in conjunction with the output from the single-axis tracking system.

Other suppliers are seeking to offer additional services by leveraging expertise and/or partnerships to diversify their businesses and create additional sales channels for their products. For example, SunLink offers integration, O&M, and software services for some customers and GameChange Solar is seeking to leverage connections with financial partners to help fund the project pipelines of their customers. Offering such services can generate additional sales channels that provide the benefit of helping customers manage fewer vendors and streamlining project development, integration and operational experiences.

Image Caption: North America Solar Tracker Market Size, By Application, 2016 & 2024 (USD Million)

  North America Solar Tracker Market Size, By Application, 2016 & 2024 (USD Million)

Paradigm shift in line with large scale integration of renewable energy resources coupled with favorable regulatory measures towards the outspread adoption of solar technology will proliferate the global solar tracker market size. Provision of leveraging schemes, fiscal incentives, tax credits, rebates and soft loans along with consequent re-structuring of the existing electrical infrastructure will further complement the business outlook.

The solar industry in the recent years, subject to the ambitious renewable targets abided by the nations across the globe has witnessed appreciable amplification. Rapid deployment of solar systems to sustain an effective energy mix across the consummate power sector will stimulate the solar tracker market growth. In addition, rising concerns pertaining to curb emissions from conventional plants will comprehensively thrust industry size.

Declining component cost along with growing adoption of high efficiency systems will augment the solar tracker market share. Expeditious adoption of economies of scale favored by fall in financing costs have instigated a competitive business scenario. Thereby, falling component costs further lead to a sustainable decline in the overall tariff structure of the generating stations which in turns complement the business growth.

Solar Tracker Market, By Product

Single axis solar tracker market share is predicted to witness growth owing to its appreciable cost effectiveness when compared with available alternatives. Although the product instigates a higher capital and operational expenditure, however delivers an effective electrical output which will further sustain the product demand.

Dual axis solar tracker market size for 2016 was valued over USD 2 billion. Product flexibility to track in both vertical and horizontal axis helps in maximum utilization of the sunlight and thereby, attains prime applicability across utility aided installations.

Solar Tracker Market, By Technology

PV solar tracker market is set to witness a growth over 16% by 2024. Ease of installation, competitive cost structure and compact size of photovoltaic technology are few indispensable parameters evaluated to justify the product penetration. Rapid adoption of these systems across residential, commercial and industrial establishments to cater the exponentially increasing energy demand will further stimulate the product demand.

Solar Tracker Market, By Application

Rapid urbanization coupled with increasing infrastructural investments will positively impact the residential solar tracker market. Favorable government norms pertaining to renewable integration including FIT, subsidies, and leveraging schemes to encourage its deployment across residential establishments will comprehensively thrust the product demand. In 2017, regulators across China revised their solar FIT mechanism for PV and distributed PV installations. The provision lays benefits worth USD 0.14/kWh, and USD 0.06/kWh for respective installations.

Utility applications in 2016 accounted for over 80% of the global solar tracker market share. Increasing demand for grid connected electricity networks across urban areas coupled with rapid integration of smart monitoring technologies across developed regions will complement the industry outlook.

Solar Tracker Market, By Region

The U.S. solar tracker market is projected to reach over 12 GW by 2024. Regulatory measures to reduce fossil fuel dependence along with the favorable financial mechanism to encourage deployment of renewable technologies will stimulate the product penetration. Rising investments to overlay the existing conventional plants with clean energy technologies will further embellish the business landscape. In 2017, regulators across the U.S. have proposed reduction in its broad tax reforms through lowering corporate taxes with an aim to escalate the clean energy industry dynamics.

Germany solar tracker market is anticipated to witness a growth over 19% by 2024. Increasing investments toward clean energy technologies along with introduction of long-term objectives to reduce carbon footprints will propel the demand of solar tracker in the country. In Germany, market premium scheme lays favorable mechanism for the ease of adoption and financial assistance to supplement renewable based installations. Hence, favorable reforms coupled with increasing consumer awareness in line with renewable energy integration will further escalate the product demand.

Increasing infrastructure development along with growing electricity demand will augment the China solar tracker market share. Rising investments to diversify clean energy portfolio coupled with stringent norms pertaining to GHG emissions will further complement the regional business growth. In 2015, China invested around USD 110.5 billion towards the expansion of renewable.

Competitive Market Share

Notable players in the solar tracker market include NEXTracker, Array Technologies, SunPower, Abengoa, Mecasolar, Powerway, GRUPO CLAVIJO, Hao solar, SOITEC, Smarttrak, Scorpius Trackers, Wuxi Hao Solar Technology, AllEarth Renewables, DEGERenergie, Grupo Clavijo, Titan Tracker

The manufacturers are investing in R&D to maximize the overall efficiency. For instance, in 2016, NEXTracker has launched solar plus storage solution which increases product energy efficiency by integrating tracker, battery, inverter, and software to provide better return on investment to plant owner.

Image caption: Solar Tracker Industry Background

Solar Tracker Market Segmentation

Trackers improves the energy output by orienting modules toward the sun. It follows the sun movement in both horizontal and vertical direction. The product helps in minimizing the incidence angle between incoming sunlight and solar panel, which improves the amount of electricity produced. The tracker helps in increasing power output by 10% to 25% as compared to stationary or fixed-tilt system depending on tracking system geographic location.

What Information does this report contain?

Historical data coverage: 2013 to 2016; Growth Projections: 2017 to 2024.

Expert analysis: industry, governing, innovation and technological trends; factors impacting development; drawbacks, SWOT.

6-7 year performance forecasts: major segments covering applications, top products and geographies.

Competitive landscape reporting: market leaders and important players, competencies and capacities of these companies in terms of production as well as sustainability and prospects.

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