Escolar Documentos
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I.
There are four fundamental drivers for solar as an investment option in India.
1.
Irradiation levels in India are between 4-6 kWh/m2/day that is nearly fifty percent higher than the
average annual radiation in Germany (3.28 kWh/m2/day).
Commercial
and
for
the
subsidy
for
segments
are
dependency
The returns form a solar plant is governed by several factors of which the following factors are
crucial:
1. Policy under which the plant is registered the policy determines the price of the Power
Purchase Agreement (PPA)
2. Location of the plant - Irradiation of site is the biggest contributor to the profitability of the
plant
3. Quality of equipment used high quality equipment ensures projected generation and
lowers the O&M of the plant
The following table enlists the approximate investment and returns expected
Policy Driven Avenues
Project Development*
TO TAL
Operational
IN R 7.25 c r per M W
Expenditure
(OPEX)
Estimated Equity Internal Rate
12- 15%
13-22%**
of Return (EIRR)
* Project Development includes acquiring irradiation data, legal structuring, permits, licenses,
registrations and any other third party expertise need for the project.
** Considering revenues from Renewable Energy Certificates (REC)
The expected EIRR in case of non-policy driven avenues, depend on the business model explored. In
case of projects based on REC models, there exists a huge upside from the sale of RECs. Current
solar RECs are trading at INR 12,000 per MWh (INR 12.00 per unit of power). This has a strong
potential to skew the profitability of the project in the right direction. However, it must be kept in
mind that the fundamentals of the REC market are not completely secure and is subject to risk.
Sol ar Comp an i e s
Con gl omer ate s
I n st i tu t i on s
Government of
Madhyapradesh
BRIDGE TO INDIAs in-depth market understanding, analysis and consultancy is presented in the
form of free reports that we publish periodically. Our corpus of reports form the most widely read
reports on the India solar market around the world. Our readership base spans 10,000 industry
BRIDGE TO INDIAs team is headed by Dr.Tobias Engelmeier a PhD is political science, with a focus
on Indian politics. His passion for India and concern for the formulation of business friendly policies
has cumulated in the genesis of BRIDGE TO INDIA. The company has a team of dynamic, young and
entrepreneurial people, who seek to engender change.
V. Next steps
This concept note shall assist Akash Exports to arrive at their decision in order to move ahead into
investing in the solar market in India. Based on this concept note, BRIDGE TO INDIA will be happy to
support Akash Exports in a detailed market entry strategy that covers investment strategy, target
consumer segments, financial modelling of the business case, identification of right technology
partners and other topics.
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