American company First Solar, major supplier of cadmium telluride-based thin-film photo-voltaic modules to India, has admitted that its products are not suitable for hot climates. Reliance Power is a major customer of First Solar.

“We believe our PV modules are potentially subject to increased failure rates in hot climates,” Mr Mark Widmar, the company’s CFO, told analysts last week.

Last September, First Solar won an order from Reliance Power to supply 100 MW worth of thin-film modules.

The deal was backed by a $84.3 million (Rs 375 crore), 16.5-year loan by the US Exim Bank. First Solar has orders worth more than 200 MW in India. Stressing the “critical role” played by the US Exim Bank in First Solar’s India business, Vishal Shah, a Deutsche Bank analyst has said that India could “represent 20 per cent of First Solar’s production in 2012”.

MORE WARRANTY PAYMENTS

“Our experience has shown that our warranty rates for hot climates are slightly higher than for temperate climates,” Mr Widmar told analysts. First Solar said that one of the reasons for its fourth-quarter operating loss of $485.3 million was higher warranty payments

As imported thin-film modules are cheaper, and often backed by easy loans, they have found favour with Indian developers. Further, developers who have won projects under the National Solar Mission have to buy locally if they opt for ‘crystalline silicon’, but are free to import if they choose ‘thin-film’.

(Of the three thin-film technologies, which differ according to the coating material, cadmium telluride (CdTe) is believed to be the most mature and cost-effective, while the other two technologies — CIGS and amorphous silicon — are still evolving.)

TOXICITY ISSUES

First Solar is the biggest CdTe supplier to India, but there are others too. Its compatriot Abound Solar has orders worth 10 MW in India. Its supply of modules to a 5MW project of Punj Lloyd is also backed by a $9-million US Exim Bank loan.

According to a recent report of Navigant Consulting, CdTe has been losing market share, yielding ground to CIGS. Also, CdTe has caused frowns because cadmium is toxic. Suppliers have offered to buy back the modules after their effective life is over, but still questions like ‘who is to guarantee this’ are being raised.

The Electronics Division of Bangalore-based Bharat Heavy Electricals Limited (BHEL) has set a new record in its solar photovoltaic business in a single year, by commissioning 13 Mw of solar power plants in various parts of the country during the current financial year.

The solar power projects commissioned by the company during the year include a 3-mw grid connected solar power plant at Raichur in Karnataka, 5 Mw plant in Rajasthan, two plants of 2 Mw each in Maharashtra and over 1 Mw in Lakshadweep Islands.

BHEL recently commissioned the 3-Mw solar plant at Yapaldinni village near Raichur for Karnataka Power Corporation Limited (KPCL), the company said in a press release.
The 5-Mw grid-connected solar power plant was commissioned for Indian Oil Corporation Limited (IOCL) at Rawra village near Phalodi, Rajasthan. The project was commissioned under the NVVN (NTPC’s Vidyut Vyapar Nigam) programme of Jawaharlal Nehru National Solar Mission (JNNSM).

Further, the two PV power plants of 2 Mw each were commissioned in November 2011 at Katol near Nagpur for Sepset Constructions Ltd and Citra Real Estate Ltd. These projects are were commissioned under Roof-top PV and Small Solar Power Generation Programme (RPSSGP) of IREDA under JNNSM.

Far away from the mainland, in the Coral Islands of Lakshadweep, BHEL is executing a 1.9-Mw order from the Lakshadweep Administration for augmentation and modernisation of existing solar power plants at various islands, of which 1.1 Mw has been commissioned. Of these island projects, the biggest diesel grid-interactive PV plant of India of 760 kW is already operational in the Island of Kavaratti since October 2011. A 320 kW PV power plant at Andrott Island was commissioned in January 2012.

BHEL is also executing solar power projects of 7.5-Mw for various customers and they are in the final stages of commissioning.

A Rs 67-crore, 5 megawatt solar photovoltaic power plant has been installed at village Rawara, Taluka Phalodi, in Rajasthan.

The project, owned by Indian Oil Corporation, was commissioned by Rajasthan Electronics & Instruments Ltd under the Jawaharlal Nehru National Solar Mission, a Ministry of Heavy Industries release said here on Thursday.

This power plant is designed to feed power to 33/132 kV grid sub-station at village Bap, which is situated 18 km from plant site Rawara. It is expected to generate energy of 67 lakh KWh a year.

The solar power plant has been developed based on crystalline technology. It was installed in record time, using in-house R&D for development of array junction boxes, a critical item for timely execution, said the release.

The Government of India and the Asian Development Bank (ADB) today signed an agreement for a $100 million ADB loan to develop a transmission system that will distribute 500 megawatts of solar power from the Charanka Solar Park in Gujarat.

Using an innovative public private partnership (PPP) model, the project will create job opportunities, improve social services and contribute to poverty reduction locally. It will also support power distribution companies in Gujarat and other Indian power utilities to meet part of their clean energy procurement obligations through solar energy.

Under the PPP model, the government has launched an attractive feed-in tariff for solar power payable to the developers while offering them the option of developing projects in a solar park. State government agencies lease the land and provide common infrastructure facilities and services, including site preparation, transmission evacuation, access roads, water and other services, thereby allowing developers to focus on the timeliness and cost efficiency of the project.

The Indian Government is aiming to generate 20,000 MW of solar power by 2022. It has launched the Jawaharlal Nehru National Solar Mission (JNNSM) in 2010, which is expected to generate 1,000 MW by 2013 by ramping up grid-connected solar power generation.

The signatories were Shri Prabodh Saxena, Joint Secretary (Administration & Bilateral Cooperation), Department of Economic Affairs, Ministry of Finance on behalf of the Government of India, and Mr. Hun Kim, ADB Country Director for India. It was also signed on behalf of the State Government of Gujarat along with Shri S.K. Negi, Managing Director, Gujarat Energy Transmission Corp.

“Given rapid growing electricity demand, and increasing reliance on imported sources of fossil fuel, India expects to utilize its large potential for solar energy in an effective manner. This project will not only benefit Gujarat, but will also help develop the PPP solar park model under the Jawaharlal Nehru National Solar Mission,” Shri Prabodh Saxena said.

“ADB is committed to generating 3,000 MW of solar power by 2013 under its Asia Solar Energy Initiative and we believe India has the potential to account for a significant share of this target,” said Mr. Hun Kim.

In addition, an associated Technical Assistance (TA) funded by the Deparment for International Development of the United Kingdom and administered by ADB will provide vocational training in energy-related skills and livelihood opportunities to local people. At least half of the participants will be women.

This is a LIBOR-based loan from ADB’s Ordinary Capital Resources and has a term of 25 years including 5 years of grace period.

China Sunergy, one of China’s larger solar module manufacturers, is willing to bring investments into solar projects in India, the company’s Chief Executive Officer, Mr Stephen Cai, told Business Line.

Nasdaq-listed China Sunergy, which last year supplied 45 MW worth of modules to two projects in Gujarat, is also interested in entering into strategic partnerships with Indian companies, he said.

Mr Cai was in New Delhi, where he spoke at the 2nd India Solar Energy Summit, of which China Sunergy was one of the sponsors.

Mr Cai, who predicts a huge growth in India for the solar industry in 2012, said that China Sunergy would set up an office in Mumbai in June “to serve our clients with local technical support and after sales-service.”

‘GAME-CHANGER’

“We are also seeking to bring investments into projects business to help our clients overcome their financing barriers,” he said. “As one of the leading Chinese solar module suppliers in India, China Sunergy is in a good position to reflect on growth opportunities in the Indian market, which is an important part of the company’s future business development,” he said. The offer of financing will be a game-changer, say experts. Going forward, the ‘renewable energy certificate’ mechanism will drive capacity addition, and here is where low-cost financing has a role.

“Under the REC mechanism, developers will not be mandated to use local content. Hence, if module manufacturers are able to assist in low-cost financing, it will contribute a lot to the success of the project,” says Mr Vineeth Vijayaraghavan, an industry expert and Editor, Panchabuta, an online renewables industry newsletter.

MODULE EFFICIENCY

China Sunergy promises to deliver 17 per cent module efficiency (a measure of how much of the sun’s energy falling on the modules is converted into electricity) by mid-2012. China Sunergy today has a module capacity of 1,000 MW and is looking to expanding it to 1,200 MW in the current year. The company has plants in Nanjing and Shanghai and is putting up a third facility in Yi Zheng City.

Asked if the company would put up a manufacturing plant in India, Mr Cai said that the company was “assessing the possibilities of manufacturing outside of China,” but does not have a firm plan yet.