1. 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.
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2. 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,
Hamburg and Munich
• German competency
and local expertise
• Entrepreneurial
approach
• Solar PV as a core
knowledge area
• Three mutually
supportive business
segments
Policy Market Entry Capital Investments
Projects Market Potential Remittance PD
Financing Competitor Landscape Due Diligence
Industry Market Strategy
© BRIDGE TO INDIA, 2012 2

3. Installed PV capacity India has more than 1GW of installed capacity already.
Key Facts Solar installed capacity in India
• 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, another 20%
in Rajasthan – both in
the West
© BRIDGE TO INDIA, 2012 3

4. PV market projection We expect India to be a 12.8 GW market until 2016
Segments are driven by
Expected installed capacity additions 2012-2016
MW (year on year) different factors
4500 Total: 12.8 4.0 GW ➡ FiT segement: NSM –
4000 GW will likely be
3.4 GW discontinued after
3500 >1GW Power
already sold 2017
3000 achieved directly
2.5 GW to end
con-
➡ RPO / REC segment
2500
sumer may provide good
2000 1.7 GW opportunities, but
1500 1.2 GW regulatory questions
Power remain
1000 sold
(mostly)
500 to the ➡ Non-subsidized
grid segments will grow:
0
solar replacing
2012 2013 2014 2015 2016
diesel as well as grid
FIT Driven Policy Based RPO-Driven
power
Telecom Towers Diesel Parity (commerical+backup)
Grid Parity Commercial
Source: BTI market analysis, based on data from MNRE, CERC, CEA
© BRIDGE TO INDIA, 2012 4

5. Global PV markets India is one of the most attractive solar markets globally
Global GW
markets
Annual growth (2011-16) Key drivers
➡ Ranked 2nd in the Ernst & Young country attractiveness index
+143%
0.15 12.8 ➡ Market segments reach grid parity and are viable without FiT
India ➡ No political incentives needed for future projects
➡ Sets RPO/ REC targets to further boost the market
+16% ➡ Ranked 4th in the Ernst & Young country attractiveness index
24.7 52.7 ➡ Political frontrunner in the past
Germany ➡ Insecurity about future of the EEG
➡ Ranked 1st in the Ernst & Young country attractiveness index
+49% ➡ Insecurity about future supply of Chinese modules, which may
4.2 30 result in higher prices and a lack of available technology
USA ➡ Sophisticated financing ecosystem
➡ Ranked 3rd in the Ernst & Young country attractiveness index
+48% ➡ Insecurity about political development towards foreign
3.1 23
investments and exchange rate fluctuations
China
➡ Ranked 6th in the Ernst & Young country attractiveness index
+13% ➡ Cut back of FiT in 2011
12.5 23
➡ Insecurity about future development of the market
Italy Installed capacity, Installed capacity,
GW 2011 GW 2016 (e)
Source: BTI market research, based on data from BTI market model, Reuters, E&Y , various
© BRIDGE TO INDIA, 2012 5

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

7. Underlying market logic for The world’s largest power failure in India drives new
our idea
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, semi-
interconnected 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, 2012 7

8. Indian tariff structure Solar is already competitive with grid power in some
regions of India
Average tariff (in
EUR cents/kWh)
16
Our model works today
14
12 ➡ Today, solar reduces
10 the cost of power
1 wherever the
8 customer pays more
6 than EUR 0.11/kWh
4
2 (dependent on local
Commercial irradiation levels)
Industrial
Domestic
➡ Wherever supply
security is low and
diesel power
Indian States (currently 60 GW
back-up systems) is
Market trend used, the case for
solar becomes
1 Falling cost of solar power will allow us to offer lower tariffs stronger
2 Rising power tariffs will make solar a more attractive alternative
Source: CERC, SERC tariff orders
© BRIDGE TO INDIA, 2012 8

9. Near term opportunities In 2013, opportunities will come primarily from NSM
Phase II
Existing opportunities (2012-13) New opportunities (2013-14)
India sales opportunity: 710MW this year India sales opportunity: 2.3GW in the next year
00
FIT Driven Policy Based
Installed capacity
485MW FIT Driven Non-Policy
475MW
Projects under Based
execution REC based projects
225MW 1,047MW
Projects likely to 1,150MW
RPO based projects
be cancelled 392MW
180MW
Opportunity (with Grid Parity Commercial
DCR) and industrial
677MW Opportunity 185MW Telecom Towers
(without DCR) 71MW
Source: BRIDGE TO INDIA project database 50MW Source: BRIDGE TO INDIA market model
Opportunity (with DCR) NSM phase two
• Madhya Pradesh allocations ( 225MW) • 1GW allocations in 1st quarter of 2013 (with DCR)
Opportunity (without DCR) Uttar Pradesh policy
• Karnataka (60MW) • 150MW in 2nd quarter of 2013 (without DCR)
• Odisha (25MW) Projects outside policy
• Direct allocations (400MW in Andhra Pradesh, • Projects outside policy based allocations. These will
Jharkhand, Bihar and Uttar Pradesh - only six include projects based on new business models around
developers involved – key client approach) REC mechanism, RPO based projects, commercial and
industrial parity projects and telecom towers (without
© BRIDGE TO INDIA, 2012 9
DCR)

10. 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

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