Solar Vision

Enertia 2009-02-01
In this Exclusive Interview Sourabh Sen & Ameet Shah, Co-Founders, Co-Chairmen & Directors, Astonfield Renewable Resources Ltd., discuss with ENERTIA Editorial the tremendous potential and feasibility for development of 'Grid-Connected Solar Energy' for the Indian Market

1) How has the Solar Energy growth worldwide moved over the last 3 years and how it is poised to move over the next 5-years? What is the actual potential?

Solar Energy has grown significantly in the past 3 years as countries across the world have adopted feed in tariff mechanisms that have accelerated the deployment of Solar PV. This incremental demand has prompted investment in additional capacity from the largest panel manufacturers, further creating efficiency gains and lower prices for panels. This virtuous cycle has been a great boon for the developing world which bear some of the highest rates of insulation. The path towards grid parity for solar power has never been clearer in the history of Solar.

In particular, and for the first time, utility scale solar solutions are beginning to be deployed in countries like China and India and very shortly in Africa through subsidized programs. Astonfield expects grid parity for solar as early as 2012 but no later than 2015 from our current scenario analysis. The overall potential for this is in the tens of thousands of megawatts of capacity for solar being deployed either in grid or off grid.

2) What is the current position of Astonfield in the development of Solar Energy portfolio? Which technology has been preferred from the techno economic perspective by Astonfield (SPV or Solar Thermal)?

Astonfield is the leading developer of utility scale Solar Energy in India with a defined pipeline of over 350MW's of solar projects on a nationwide basis. Astonfield is a technology neutral company and will deploy solutions that are the most competitive to achieve cost leadership. The debate between PV and Solar Thermal in India is somewhat immature.

According to our internal analysis, it is not a question of either SPV or Solar Thermal, but more a question of what technology is commercially viable for the geography of the project, the community the electricity utility serves, the availability of water and what the cost factors are.

Currently, Astonfield has identified thin film solar PV as its choice of panel technology to drive its utility scale SPV business and is actively in discussions with firms who have developed solar thermal technology solutions.

3) How does Astonfield view the Indian Market potential for development of Grid Connected Solar Energy Projects? Which States and Regions have policy and environment conducive to the development of Solar Energy in India?

Astonfield believes that India will most likely offer the largest solar program in the world within a matter of months. In fact, Astonfield has been working actively with the State and Central institutions on providing them extensive analysis from a developer's perspective on creating policy constructs that would lead to a successful program. It's quite amazing to see the geometric growth of the solar industry in India.

In January 2008, the Government of India began an exploratory 50MW Grid Connected Solar Energy Program that kicked off the race. In January of 2009, The Government of Gujarat announced their independent program for 500MW's and now, we expect the Central Government to announce a program in excess of several thousand Mw's in a matter of months.

The solar race is definitively on in India and those states such as Rajasthan, Gujarat, West Bengal and Haryana who have already adopted feed in tariffs; they stand to benefit sooner than those that are unable to mobilize their regulatory framework to promote solar energy.

4) In India, the expectation at the planning level and the government is that Solar Power must not cost more than Rs. 8 per KWh levelized. In fact, the current levels of the same are at Rs. 15- Rs. 18 per KWh, of course on a tapered or reducing tariff method. How do you hope to bridge this situation for Competitive Market Based Solar Energy?

The answer to this question is quite simple. India will need to wait till Rs8 per KWh allows for the successful and profitable development of solar in the country. The notion that costs can be brought down faster or have been kept artificially high by developers is simply not credible. Policymakers are coming around to these conclusions themselves, since no projects have been implemented since the announcement of the policy in January 2008.

The critical challenge policymakers in India and other countries face is trying to optimize the constraints of being proactive about lowering costs of solar, having a pulse on the pricing of modules and calibrating tariff structures in a manner in which they don't undershoot (so no projects get implemented) or overshoot (which allows for abnormal returns to developers) in setting long term tariff regimes for solar energy.

5) Germany and Japan are adding more than 500 MW per annum in Solar Power Generation. How do you see India achieve such scale-up and what could be the development strategy in your opinion?

India could see 500MW's of additional capacity of solar energy being commissioned on an annual basis as early as 24-36 months from now, provided that policy framework were robust and conducive to private sector investment. We are at the beginning of a significant point of inflexion in solar energy in India. Progressive policymakers will benefit by yielding first mover advantages and bringing additional investment to their states as more upstream facilities get developed and generate employment amongst other things.

6) Critics of Solar Energy have been harping on the heavy CAPEX (Capital Expenditure). What in your view is a real and practical assessment of development costs and tariffs for country like India?

Astonfield believes grid parity for SPV is within 3-5 years. India has a choice to be part of this solution or be a bystander and look back on the lost years. We firmly believe that India is now part of the solution and this debate is virtually irrelevant.

The government's pragmatic approach by creating mandatory purchases of renewable energy by State Utilities has laid the path for solar to succeed over the medium term. As we have said earlier – Astonfield believes that SPV may reach grid parity as early as 2012 but not later than 2015. At this point SPV will cost the same as the levelized cost of other energy generation.

7) Can Solar Energy and future developments in Grid Scale Solar Power (Solar PV and Solar Thermal) result in parity versus tariffs from Thermal Power over the next 15 to 20 years? Is this feasible?

We may even enter a time over the next 20 years where we will begin subsidizing coal. We must do everything we can today to deliver on the commercial, social and environmental benefits of solar energy.

The answer to this is an unequivocal yes! Grid parity will result in tens of millions of people coming out of darkness for the first time. This is something no developing nation can afford to turn their back on.