BRIDGE TO INDIA Solar Compass Q4 2017

INDIA SOLAR
COMPASS 2017 Q4
Safeguard duty looms

Record 2017 to be followed by an year of slowdown
and uncertainty
© BRIDGE TO INDIA, 2018 Page 1

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Surbhi Singhvi, BRIDGE TO INDIA
C 8/5, DLF Phase I Vinay Rustagi, BRIDGE TO INDIA
Gurgaon 122001 India
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Contents
Executive summary 5
1. Installed capacity 10
2. Capacity addition 13
2.1 Progress in Q4 2017 13
2.2 Estimate for Q1 2018 and Q2 2018 15
3. Leading players 18
3.1 Project developers 18
3.2 Module suppliers 18
3.3 Domestic manufacturers 19
3.4 Inverter suppliers 20
3.5 EPC contractors 20
4. Tender progress updates 22

4.1 New tender issuance 22
4.2 Tender cancellations 26
4.3 Tender results 26
4.4 Tenders pending allocation 29
5. Pricing updates 31
5.1 EPC costs 31
5.2 Solar modules 31
5.3 Inverters 31
5.4 Rooftop solar EPC costs 32
6. Funding 33
6.1 Equity funding 33
6.2 Debt funding 35
6.3 Mergers and acquisitions 36
7. Policy and regulatory updates 37

7.1 Central government 37
7.2 State government 38
7.3 Others 38
8. Key market insights 43

8.1 Project developers long for policy clarity 43
8.2 Solar companies look for business diversification 43
8.3 Solar open access market shows promising growth 43
9. International developments 45
9.1 China breaks its own record 45
9.2 US ITC provides range of recommendations for restricting solar 45
equipment imports
9.3 Chinese module manufacturers exiting the US public 46
equity market

List of figures
Figure 1.1: Total installed and pipeline capacity as on 10
December 31, 2017, MW
Figure 1.2: State-wise utility scale solar commissioned and 11
pipeline capacity, MW
Figure 1.3: State-wise rooftop solar installed capacity, MW 11
Figure 1.4: Top 20 developers by commissioned capacity, MW 12
Figure 2.1: Quarterly utility scale solar capacity addition by type 13
of tenders, MW
Figure 2.2: State-wise utility scale solar capacity addition in Q4 2017, MW 14
Figure 2.3: Anticipated/scheduled vs actual capacity addition in 15
Q4 2017 for key tenders, MW
Figure 2.4: Likely capacity addition in Q1 2018 & Q2 2018, MW 16
Figure 3.1: Developer wise capacity commissioned in Q4 2017 & 18
2017, MW
Figure 3.2: Market share of module suppliers in Q4 2017 & 2017, MW 19
Figure 3.3: Market share of domestic module manufacturers during 19
Q4 2017 & 2017, MW
Figure 3.4: Market share of inverter suppliers in Q4 2017 & 2017, MW 20
Figure 3.5: Market share of EPC contractors in Q4 2017 & 2017, MW 21
Figure 4.1: New tender announcements and allocations, MW 22
Figure 4.2: Number of tenders issued 22
Figure 4.3: New tenders issued in Q4 2017 23
Figure 4.4: Auctions results in 2017, INR/ kWh 26
Figure 4.5: Bid results of NTPC 250 MW tender 27
Figure 4.6: Bid results of SECI Rajasthan 500 MW tender 28
Figure 4.7: Bid results of SECI Rajasthan 250 MW 28
Figure 5.1: BTI India Solar EPC Price Index, INR/ W 31
Figure 5.2: BTI India Module Price Index, USD cents/ W 31
Figure 5.3: BTI India Solar Inverter Price Index, INR/ W 32
Figure 5.4: BTI India Rooftop Solar EPC Cost Index, INR/ W 32
Figure 6.1: PE fund flow in the Indian solar sector, USD million 33
Figure 6.2: Renewable stock trading pattern vs indices 34
Figure 6.3: M&A in the Indian solar market 36
Figure 8.1: Comparison of industrial grid tariff with solar tariffs, INR/ kWh 44
Figure 9.1: Quarterly solar installation capacity in China, GW 45
List of tables
Table 4.1: Key details of tenders issued in Q4 2017 24
Table 4.2: Rooftop solar tenders issued in Q4 2017 25
Table 4.3: Tenders cancelled in Q4 2017 26
Table 4.4: Tenders pending allocation 29
Table 6.1: Key PE transactions in 2017 34
Table 6.2: State Bank of India MCLR 35
Table 6.3: Offshore debt funding deals 35
Table 6.4: M&A transactions in Indian solar sector in 2017 36

Executive summary
Q4 was a slow quarter India’s total installed capacity is estimated to have reached 19,516 MW as on
in terms of project December 31, 2017. This includes utility scale solar capacity of 17,415 MW
commissioning with 1,503 MW (89%) and rooftop solar capacity of 2,101 MW (11%). The four southern states
of utility scale projects being along with Rajasthan continue to lead with 68% of total installed capacity. Total
commissioned capacity addition in 2017 was 9,255 MW, up 94% over 2016 numbers.
Figure 1: Total installed and pipeline capacity as on

December 31, 2017, MW
NTPC offtake
3,285
State offtake SECI offtake

CPSU 3,823 1,240
development
469 CPSU
development
1,119
Miscellaneous
216
Pipeline
9,627
SECI offtake
4,865
Commisioned
19,516
NTPC offtake
450 Rooftop
solar State offtake
2,101 9,707
Others
1,849
Source: BRIDGE TO INDIA research

Note: 1. This chart excludes the Jharkhand 1,200 MW tender, issued in 2015, for
which PPAs are yet to be signed.
2. SECI – Solar Energy Corporation of India Limited
CPSU – Central Public Sector Undertaking
3 Others include projects under Renewable Energy Certificate (REC)
mechanism, captive and third party mode
Q4 2017 saw commissioning of only 1,503 MW of utility scale projects, as

against a total of 5,100 MW scheduled/anticipated to be commissioned in the
quarter.

Figure 2: Quarterly utility scale solar capacity addition, MW
3,500
3,093 3,019
3,000
2,500 2,299
2,000
1,503 1,520
1,500 1,406
1,000 752
584
500
0
Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018
estimated estimated
Central government tenders State government tenders Others
The weak commissioning The weak commissioning performance is mainly attributable to projects under
performance is mainly various SECI, and Karnataka and Telangana state tenders. Developers cite
attributable to projects under procedural challenges in land acquisition and transmission connectivity as well
various SECI and Karnataka as module price increase (up 6% to USD 0.36/ W in the quarter) as key reasons
and Telangana state tenders for the delays. The new safeguard duty investigation has also added to overall
market anxiety.
Ongoing slippages mean that Q1 2018 should be a busy quarter with an

estimated 3,019 MW of capacity to come online. In the rooftop solar segment,
we expect around 190 MW to be added in Q1 2018 and 200 MW in Q2 2018.
Private sector performance

As in Q3 2017, ReNew commissioned the largest capacity in Q4 2017 (300 MW),
followed by Adani (250) and Tata Power (180). ReNew also emerged as the
largest developer by commissioned capacity (826 MW) for the whole of 2017,
followed by Greenko (710) and NTPC (510).
In module supply, the top
three suppliers—Canadian In module supply, the top three suppliers—Canadian Solar, First Solar and
Solar, First Solar and JA JA Solar—had more than 50% market share for projects commissioned in
Solar—had more than 50% Q4 2017. This quarter also saw a relatively higher proportion of projects
market share for projects commissioned with domestic content requirement (DCR). 70 MW of DCR
commissioned in Q4 2017 projects, tendered under project development route, are still pending
commissioning but their fate is not clear in view of the ongoing World Trade
Organisation (WTO) dispute with the USA.
Amongst domestic module manufacturers, Mundra Solar (190 MW) and Vikram
Solar (145) remained the largest manufacturers by production in the quarter.
Sungrow captured a large market share (27%) in the inverter market in Q4

by supplying to projects commissioned in Telangana and Karnataka. It was
followed by TMEIC (20%) and Huawei (16%). The largest inverter supplier in the
last two quarters, ABB, slid down to 7%.

Tender progress updates
As expected, the pace of new tender issuance picked up in Q4 2017. New
tenders totaling 2,650 MW were issued in the quarter, up 50% over Q3
2017. Majority (83%) of this tendered capacity is for project development.
New tenders totaling 2,650 Maharashtra (1,365 MW) and Karnataka (1,060) were the leading states to issue
MW were issued in the new tenders. At the same time, tenders with a total capacity of 718 MW were
quarter, up 50% over Q3 2017 cancelled in Q4 2017. Most of these were EPC tenders with DCR stipulation
and the cancellation is due to the recent WTO order outlawing further DCR
projects. Rooftop solar also saw a more than 100% increase in issuance of new
tenders, aggregating to more than 220 MW, in the quarter.
Results were announced by SECI for its two Bhadla solar park based 500
MW and 250 MW tenders. Both tenders attracted high market interest with
oversubscription of around 5x. The winners include Hero (300 MW, INR 2.47/
kWh), Softbank (200, 2.48), Azure (200, 2.48) and ReNew (50, 2.49). These
tariffs are marginally higher than the previous low of INR 2.44/ kWh. But
given that costs have continued to increase on account of GST, import duties,
module price rises and other factors, they signal fierce competition amongst
developers for winning new capacity. NTPC also awarded a 250 MW DCR
project to Azure (INR 3.14/ kWh) but this project was subsequently cancelled
because of WTO’s DCR ruling.
Equipment and EPC cost trends
EPC costs increased by 5% EPC costs increased to INR 39/ W (+ 5% over Q3 2017) in Q4 2017 mainly
in Q4 2017 mainly because of because of increase in module prices to USD 0.36/ W (+ 6%) and GST. We
increase in module prices expect EPC costs to remain unchanged in Q1 2018 and reduce to INR 37/ W in
Q2 2018. We expect module prices to decline by 1-2 cents for each of the next
two quarters. Meanwhile, prices of central inverters have been stable at INR
1.80/ W.
Figure 3: EPC costs for utility scale and rooftop solar projects, INR/ W
60
52
50 49 48
45 45 44 44 45 45
43 42 42 43
40 38 39 39
37 37
35
33
30
20
Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018
estimated estimated
Utility scale EPC costs Rooftop solar EPC costs

Financing
Q4 2017 was a busy quarter for both equity and offshore debt financing. Four
private equity (PE) deals with a total equity investment of more than USD 80
million were announced. Of these, two investments were in rooftop solar space
(Cleanmax and Oorjan Cleantech), which is increasingly gaining investors’
attention. Indian Energy Exchange (IEX) successfully completed its IPO raising

INR 10 billion (USD 154 million). Offshore debt market remained active with
interest from international financial institutions including the World Bank and
the European Investment Bank (EIB). Indian Renewable Energy Agency (IREDA)
and Power Finance Corporation (PFC) also raised USD 300 million and USD 400
million respectively through issue of green bonds.
Offshore debt market The only notable M&A deal in Q4 2017 was acquisition of Equis Energy’s
remained active with interest 11 GW renewable energy Asia Pacific portfolio by a consortium comprising
from international financial Global Infrastructure Partners (GIP), Canada Pension Plan Investment Board
institutions including the (CPPIB), CIC Capital Corporation and China Investment Corporation. This
World Bank and the EIB portfolio includes 260 MW of completed and under construction solar projects
in India. Many other significant deals are believed to be in advanced stages of
negotiations.
Closing summary
Following a record year when India added over 9 GW of new solar capacity, the
sector is poised tentatively. To everybody’s relief, the pace of tender issuances
has picked up significantly and is expected to remain strong over next few
months. But likely imposition of safeguard duty is a major concern, creating
uncertainty for auction processes as well as for projects under development.
We estimate that 2018 capacity addition will fall to 6 GW.

1. Installed capacity
India added 1,503 MW of new utility scale solar power generation capacity in
Q4 2017 taking cumulative installed capacity to 19,516 MW as on December
31, 2017. Capacity addition was significantly below our estimate of 2,650 MW
and fell by 35% over Q3. Total utility scale and rooftop solar capacity stands
at 17,415 MW and 2,101 MW respectively. Total project pipeline – projects
allocated to project developers and at various stages of development– stands
at 9,627 MW.
Figure 1.1: Total installed and pipeline capacity as on December 31,

2017, MW
NTPC offtake
3,285
State offtake SECI offtake

CPSU 3,823 1,240
development
469 CPSU
development
1,119
Miscellaneous
216
Pipeline
9,627
SECI offtake
4,865
Commisioned
19,516
NTPC offtake
450 Rooftop
solar State offtake
2,101 9,707
Others
1,849

Note: 1. This chart excludes the Jharkhand 1,200 MW tender, issued in 2015, for
2. SECI – Solar Energy Corporation of India Limited
CPSU – Central Public Sector Undertaking
3 Others include projects under Renewable Energy Certificate (REC)
mechanism, captive and third party mode
Telangana (3,055 MW), Karnataka (2,465) and Rajasthan (2,279) are the
top three states by commissioned capacity for utility scale solar projects.
Rajasthan (1,639) and Karnataka (1,615) have the largest pipeline of projects.
For rooftop solar, Maharashtra, Tamil Nadu and Rajasthan are the top three
states. Performance of leading states is shown in the following charts.

Figure 1.2: State-wise utility scale solar commissioned and pipeline
capacity, MW
Telangana
Karnataka
Rajasthan
Andhra Pradesh
Tamil Nadu
Gujarat
Madhya Pradesh
Punjab
Maharashtra
Uttar Pradesh
Uttarakhand
Bihar
Chhattisgarh
Odisha
Kerala
Others
0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500
Commissioned capacity-central government tenders Commissioned capacity-state government tenders

Commissioned capacity-others Pipeline capacity
Figure 1.3: State-wise rooftop solar installed capacity, MW
Maharashtra 368
Tamil Nadu 284
Rajasthan 165
Karnataka 155
Gujarat 153
Haryana 135
Punjab 126
Uttar Pradesh 117
Delhi 112
Telangana 76
Andhra Pradesh 70
Madhya Pradesh 49
Kerala 40
Others 251
0 50 100 150 200 250 300 350 400

Top 20 developers account for 61% of the total commissioned utility scale solar
capacity. Adani stepped up the charts during Q4 2017 to become the largest
developer with a capacity of 1,268 MW, followed by Tata Power (1,165) and
Greenko (1,144).
Figure 1.4: Top 20 developers by commissioned capacity, MW
2,000
1,500
1,000
500
0
Tata Power
Adani
Greenko
ReNew
Acme
Azure
NTPC
Softbank
Engie
Mahindra
Vector Green
Shapoorji Pallonji
Suzlon
HPPPL
Hero
Mytrah
Sky Power
Torrent
Fortum
Essel Infra
Commissioned capacity Pipeline capacity

Notes: 1. This chart excludes the Jharkhand 1,200 MW tender, issued in 2015, for
2. Projects sold to other companies by developers are mentioned under the
name of the buyer
3. HPPPL – Hindustan Power Projects Private Limited

2. Capacity addition
2.1 Progress in Q4 2017
About 5,100 MW of utility scale solar capacity was scheduled to be
commissioned in Q4 2017 based on commercial operation date (COD) target
dates of different tenders and slippages from previous quarters. However,
only 51 solar projects with a total capacity of 1,503 MW were commissioned.
The slippage was primarily in commissioning of SECI and, Karnataka and
Telangana state tender projects because of connectivity and land related
issues.
49% of the commissioned capacity (734 MW) was executed under various state
tenders and 47% under NTPC (660) and SECI (30) tenders. Balance 5% was
accounted for by private ‘open access’ projects.
Figure 2.1: Quarterly utility scale solar capacity addition by type of

tenders, MW
3,500
3,093 3,019
3,000
2,500 2,299
2,000
1,503 1,520
1,500 1,406
1,000
752
584
500
0
Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018
estimated estimated
Open category DCR
Most of the DCR projects have already been commissioned. 70 MW of DCR

projects tendered under project development route (Adani’s 50 MW in
Karnataka and 20 MW in Maharashtra) were still pending completion as
of December 31, 2017. The fate of these projects is not clear in view of the
ongoing WTO dispute with the USA.
Around 240 MW of rooftop solar capacity is also estimated to have been added
in Q4 2017, around 20% higher than in Q3 2017.
Karnataka installed the highest utility scale solar capacity (884 MW) in Q4
2017. It was followed in second and third places by Telangana (382) and Andhra
Pradesh (82) respectively.

Figure 2.2: State-wise utility scale solar capacity addition in Q4 2017,
MW
1,000
900 884
800
700
600
500
400 382
300
200
100 82 60 50 30 15
0
Karnataka Telangana Andhra Rajasthan Madhya Maharashtra West
Pradesh Pradesh Bengal
Details of key projects commissioned in Q4 2017 are given below.
200 MW 100 MW NTPC Karnataka 500 MW tender (auction – Q2 2016, COD target – Q2 2017)
commissioned pending
200 MW 100 MW
commissioned pending400 MW capacity was commissioned under this tender by Tata Power (100
MW), Adani (100), Fortum (100), RattanIndia (50) and ReNew (50) in Q4
2017. Remaining 100 MW of capacity under this tender is expected to be
200 MW 100 MW commissioned by Acme in Q1 2018.
100 MW commissioned
Karnataka 1,200 MW state tender (auction – Q3 2016, COD target – Q3 2017)
100 MW commissioned
Projects totaling 370 MW were commissioned by Adani (100 MW), Hero (80),
609 MW 10 MW
ReNew (80), First Solar (40), Emmvee (40), Mytrah (15) and Reitz India (15) in
commissioned
200 MW
MW pending
100 MW Q4 2017. So far, 707 MW capacity has been commissioned under this tender.
609 10 MW
commissioned
100 MW commissioned
commissioned pending Projects yet to be completed include Hero (90), Adani (80 MW), OPG Power (62)
pending
and others.
350 Telangana 2,000 MW state tender (auction – Q3 2015, COD target – Q1 2017)
609 MW
MW commissioned 10 MW
commissioned
350 MW commissioned pending
100 MW commissioned
Many projects under this tender continued to face delays as only 232 MW
1,617 MW 379 MW capacity was commissioned in Q4 2017 by Mytrah (137 MW), Suzlon (50)
commissioned pending and Solarpack (45). This was much lower than 611 MW expected to be
1,617 MW 379 MW
commissioned
350 MW commissioned pending commissioned in Q4 2017. While the COD target was extended till October
609 MW 10 MW 31, 2017, around 379 MW of capacity is yet to be commissioned by Mytrah,
Hero, Greenko and others. Delays have been attributed to land acquisition and
707 MW 493 MW
commissioned
1,617 MW 379 MW statutory approvals.
pending
707 MW
commissioned 493 MW
pending
NTPC Telangana 350 MW tender (auction – Q2 2016, COD target – Q3 2017
350 MW commissioned
ReNew commissioned the last 100 MW project under this tender in Q4 2017.
400
707 MW
MW 100
493 MW
MW
commissioned
pending Andhra Pradesh 619 MW state tender (auction – Q2 2016, COD target – Q3
400 MW
1,617 MW 100
379 MW
MW
commissioned
pending 2017)
82 MW capacity was commissioned by Greenko (60 MW) and Rain Cements (22)
in Q4 2017. 527 MW capacity had already been commissioned previously and
400 MW 100 MW only one 10 MW project remains to be commissioned by Mahindra.
commissioned
707 MW pending
493 MW

350 MW commissioned
350 MW commissioned
1,617 MW 379 MW
commissioned
1,617 MW pending
379 MW
NTPC Rajasthan 100 MW DCR tender (auction – Q3 2016, COD target – Q4

707 MW 493 MW 2017)
commissioned
707 MW pending
493 MW
commissioned pending A 60 MW project under this tender was commissioned by Suzlon Q4 2017. With
40 MW being commissioned by Janardan Wind and Maharashtra Seamless
earlier, the entire 100 MW tender capacity has been commissioned.
400 MW 100 MW
commissioned
400 MW pending
100 MW Madhya Pradesh 300 MW tender (auction – Q3 2015, COD target – Q1 2017)
ReNew completed its 50 MW project in Q4 2017 but this project is currently
sub-judice due to delays beyond permissible limit in the PPA. SkyPower is yet
to commission 100 MW of projects under this tender. Remaining 150 MW of
capacity has already been commissioned previously.
Figure 2.3: Anticipated/scheduled vs actual capacity addition in

Q4 2017 for key tenders, MW
1,250
1,000
750
500
250
0
SECI Maharashtra
450 MW
NTPC Rajasthan 100

MW DCR
NTPC Karnataka 100

MW DCR
NTPC Telangana
350 MW
NTPC Karnataka
500 MW
Telangana
2,000 MW
Karnataka
1,200 MW
SECI Odisha
270 MW
SECI Karnataka
920 MW
2.2 Estimate for Q1 2018 and Q2 2018

Around 3,019 MW of new utility scale capacity is due to be added in Q1 2018.
This is mainly
Q1
on the back of huge slippages of projects from Q4 and earlier. We
2,000
expect further 1,520 MW of capacity to come online in Q2 2018.
estimate
1,600
More than 50% of the estimated capacity in Q1 2018 is expected to be
commissioned in Karnataka—600 MW under SECI 920 MW tender, 100 MW
1,200
under NTPC 500 MW tender, 250 MW under state 1,200 MW tender and another
800 MW under
Q2 open access.
800
estimate
400
0
Karnataka Maharashtra Telangana Andhra Uttar Pradesh Chhattisg
Pradesh

N
NTPC
N
SE
NTP
Figure 2.4: Likely capacity addition in Q1 and Q2 2018, MW
2,000 Q1
estimate
1,600
1,200
800 Q2
estimate
400
0
Karnataka Maharashtra Telangana Andhra Uttar Pradesh Chhattisgarh Odisha
Pradesh
Rooftop solar
The pace of capacity addition is expected to slow down given the rising
uncertainty about imposition of various taxes and duties in the near future. We
expect around 190 MW to be added in Q1 2018 and 200 MW in Q2 2018.

3. Leading players
3.1 Project developers

As in Q3 2017, ReNew commissioned the largest capacity in Q4 2017 (300 MW)
in Telangana, Madhya Pradesh and Karnataka. It was followed by Adani (250) in
Karnataka and Telangana and Tata Power (180) in Karnataka and Maharashtra.
Figure 3.1: Developer wise capacity commissioned, MW
Q4 2017 2017
350
w
300
Ne
300
Re
250
250
10%
o
nk
200 ee
180 Gr
152 8%
150
110 100
96 TPC
100 80 Others 46% 6% N
60 50
50 45 40 40
6% Adani
0
6%
ReNew
Adani
Tata Power
Mytrah
Suzlon
Fortum
Hero
Greenko
RattanIndia
Solarpack
Emmvee
First Solar
Others
Acm
e
5%
4%
3% Ma
3% T
3% Suzlon
Az
ur
Sof
e
ata P
t
hindra
b ank
ower
Over the whole of 2017, ReNew commissioned the maximum capacity (826
Q 4 2017 MW), followed by Greenko (710) and NTPC (510). NTPC
2017became one of the top
three developers r in 2017 through commissioning of DCR projects in Rajasthan,
ola and Andhra Pradesh under EPC mode.
Ot
S
Madhya Pradesh
he
n
a
ia
in
ad
rs
Tr
Pre n Oth
Ca
1
mi ers
7%
er 3.2
23 Module suppliers
%
16
So 27
Vikr lar %
am S 1
olar %
2% Canadian Solar was the largest module supplier with 391 MW of DC capacity olar
Waaree 3% 12% Ca nadian S
for projects commissioned in Q4 2017, followed by First Solar (357), JA Solar
Emmvee 3% (106), Tata Power (105), Talesun (89) and Trina (80). Around 53% of the projects
Mundra Solar 3% commissioned in Q4 imported modules
n 3% from Chinese suppliers, while 18% (9%
4% Hareo
Risen in Q3 2017) were sourced from domestic
ha 4
% manufacturers. Tata10Power was the
%J
% 21% anw for projects commissioned in Q4 2017.
As
a5 largest domestic
Fi supplier (105)
H % o
n rst 4 lar
Tri So ko
5%
lar Jin
4%
9%
6%
un
%
7% JA
6% First Solar
n
su
L5
s
Ri
le
wer
le
Ta
se
GC
Ta
n
Po
Sola
Tata
Domestic manufacturer
Q 4 2017 2017
Others
Oth
Delt

ers
GE
515
BB
a7
TB
15
2
E
%
Fir
4%
Rat
3% Ma
Tat
3% T
S
3% Suzlon
Az
ur
Sof
e
ata P
tba
hindra
nk
ower
Figure 3.2: Market share of module suppliers, MW
Q 4 2017 2017
lar
Ot So
he ian
a
in
rs d
na
Tr
Pre Oth
Ca
1
%
mi 7% ers
er %
16
So
lar 23 27
%
Vikr 1
am S
olar %
2% lar
adian So
Waaree 3% 12% Can
Emmvee 3%
Mu ra Solar 3%
nd
n 3%
4% Hareo
Risen 4% 10%
21% wha
a5
%
Fir Han JA
s
n st S 4% ola
Tri o ko r
5%
lar Jin
4%
9%
%
n
%
7% JA
6% First Solar
n
su
er 6
L5
Ri
le
les
Ta
se
GC
Ta
Pow
n
Sola
Tata
Note: The market share has been calculated after considering the DC capacity of projects
commissioned in 2017
For projects commissioned in the whole of 2017, Trina Solar supplied the
Q 4 2017 maximum capacity (1,586 MW), followed by Canadian2017Solar (1,116) and JA Solar
(965). Nine of the top ten module suppliers in 2017 were Chinese suppliers.
Others
Oth
3.3 Domestic manufacturers

Delt 23
ers
GE
515
B
a 79
TB
AB
15%
De gro Sc
2
EA
hn
un Q4 2017, total module production
9
Hit lta SIn eid by domestic manufacturers was 690
74
29
ach 1% % e
1,
7 MW, up 6% over 2016. Mundra Solarr 3and
0
i 2% 2 53 Vikram Solar continued to be the

GE 5% largest domestic manufacturers in Q4 with production of 190 MW and 145 MW
Huaweiby70Tata
respectively. They were followed 2 Power (80) and Waaree (70). A few
ABB 7% mid and small-sized domestic manufacturing companies including Lanco and
Sonali Solar halted production in Q4 2017 due to lack of orders.
1,318
7 % ch i 767 TMEI
C
SMA Hita
Figure 3.3: Market share of domestic module manufacturers, MW
20
%
TM
3
EI
96
6%
1,24
Indosola %
C
w
Others 4%
ei 1
So
Swel
ro
2
ng
va
Pr
SMA
aw
em
Su
Po
ect 2
Hu
ie
r 1%
we
rS
ol r
ola
r4
ar
ra S
%
5% nd
Mu
Emm
vee 6 28%
%
Goldi Green 8%
% 21
r 10 %
we Vik
a Po ra
m
11%
t
Ta So
lar
Waa
e re

Emmvee 3%
Mundra Solar 3% n 3%
4% Hareo
Risen 4% 10%
21% wha
5 %
Fir Han JA
s
ina st S 4% ola
r
Tr o ko
5%
lar Jin
4%
9%
%
n
%
7% JA
6% First Solar
n
su
er 6
L5
3.4 Inverter suppliers
Ri
le
les
Ta
se
GC
Ta
Pow
n
Solar
Sungrow climbed up the charts to become the largest inverter company by
Tata
capacity commissioned in Q4 2017 (410 MW). It was followed by TMEIC (302),
Huawei (250), SMA (110) and ABB (100). ABB was the big loser falling from 40%
in Q3 2017 to just 7% in Q4 2017.
Figure 3.4: Market share of inverter suppliers, MW
Q 4 2017 2017
Others
Oth
Delt
ers
GE
515
B
a 79
TB
row
AB
15%
De Sc
22
E
ng hn
9
A
Hit lta Su eid
74
3
29
ach 1% % er
1,
27
0
i 2% 35
3
GE 5%
Huawei 702
ABB 7%
1,318
7 % ch i 767 TMEI
C
SMA Hita
20
%
TM
3
EI
96
6%
1,24
C
w
ei 1
ro
2 SM
ng
aw
Su
Hu
A
Over the whole of 2017, ABB was the largest inverter supplier supplying a
total capacity of 1,749 MW, followed by TMEIC (1,318) and SMA (1,242). Top ten
inverter suppliers has a total 93% market share in the year.
3.5 EPC contractors

Share of self EPC projects in Q4 2017 was at 54%, around the same level as
in Q3 2017. B-Electric was the largest EPC contractor (145 MW) for projects
commissioned in Q4 2017, followed by L&T (70), Mahindra (60), Tata Power (50)
and Oriano (40).

Figure 3.5: Market share of EPC contractors, MW
Q 4 2017 2017
Oth
Ot
ers
he
rs
1,3
Ste
18
BH
24
rlin Lan
g&
%
E co
Prem Wilso L 1% L&T 100
ier S n 1% 131
ola BHE
Jakso r 1% Rays expert L 142
n 1% s 174
Oriano 3% B-Electric 180
54% Self EPC 4,304 Self EPC
Tata Power 3% Jakson 255
60
ndra
4% dra 2
Mahi Mahin
293
T5
%
S olar 5
L& am 32
Vikr w er
Po
%
4
c9
81
ta
Ta
tri
on
ec
ils
El
W
B-
g&
lin
er
St
For the whole of 2017, Sterling & Wilson was the largest EPC contractor with a
capacity of 814 MW, followed by Tata Power (325) and Vikram Solar (293).

4. Tender progress updates
4.1 New tender issuance
The pace of new tender issuance picked up significantly in Q4, as predicted
by us in the last edition of India Solar Compass. A total of 2,650 MW of new
tenders were issued – led by Maharashtra and Karnataka – as against only
1,095 MW in Q3. A vast majority of this capacity, 2,225 MW, is in the form of
project development tenders.
Figure 4.1: New tender announcements and allocations, MW
4,000
Tender
announced
3,000 Tender
allocated
2,000
1,000
- 1,000
Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2015 2015 2016 2016 2016 2016 2017 2017 2017 2017
Project development tenders EPC tenders

Note: Capacities shown on the negative axis refer to cancelled tenders
7 utility scale tenders were issued during the quarter.
Figure 4.2: Number of tenders issued

12
10
8
6
4
2
0
Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017
No. of project development tenders No. of EPC tenders

Prominent project development tenders issued were:
- Maharashtra State Electricity Distribution Company Limited (MSEDCL) 25

1,000 MW,
NTPC SAIL
200
SECI Coal India

- 1,000
Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2015 2015 2016 2016 2016 2016 2017 2017 2017 2017
Project development tenders - tenders

EPC Karnataka Renewable Energy Development Limited (KREDL) 860 MW, and
- Maharashtra State Power Generation Company Limited (MAHAGENCO)

300 MW.
The pace of new EPC tenders has reduced as compared to that in Q3. The three
new EPC tenders include SECI (200 MW) in Madhya Pradesh, KREDL (200) and
NTPC SAIL Power Company Limited (25) in West Bengal
Figure 4.3: New tenders issued in Q4 2017
25
NTPC SAIL
200
SECI Coal India

1,000
300
MAHAGENCO 65 MSEDCL
MAHAGENCO
860
200
KREDL
KREDL Central government tenders
State government tenders

Table 4.1: Key details of tenders issued in Q4 2017
Project development tenders
Project Name MSEDCL 1,000 MW KREDL 860 MW
Tender issue date December 2017 December 2017
Tendering authority/ Offtaker MSEDCL KREDL/Karnataka distribution

companies (DISCOMs)
Capacity 1,000 MW 860 MW
Location Maharashtra Karnataka
Tender scope Project development Project development
Category Open Open
Allocation basis Tariff bidding (e-auction) Single stage tariff bidding
Solar park availability None None

Project size 2-1,000 MW 3-20 MW
Benchmark tariff INR 3.00/ kWh -
Financial criteria Net worth greater than INR 8.5 million/ Minimum net worth of INR 20 million/
MW MW
Deposits and bank guarantees Earnest money deposit (EMD) - INR 0.80 Average annual turnover Bid security of
million/ MW INR 1 million/ MW; PBG– INR 1 million/
Performance bank guarantee (PBG) - INR MW
2 million/ MW
Project Name MAHAGENCO 300 MW MAHAGENCO 65 MW
Tender issue date December 2017 October 2017
Tendering authority/ Offtaker MAHAGENCO MAHAGENCO
Capacity 300 MW 65 MW
Location Maharashtra Maharashtra
Tender scope Project development Project development
Category Open Open
Allocation basis Competitive bidding -
Solar park availability None None

Project size - 65 MW
Benchmark tariff - -
Financial criteria - -
Deposits and bank guarantees - -

EPC tenders
Project Name KREDL 200 MW SECI Coal India 200 MW NTPC SAIL 25 MW
Tender issue date November 2017 October 2017 October 2017
Tendering authority/ Bangalore Electricity Supply SECI/Northern Coalfields NTPC SAIL Power Company
Offtaker Company (BESCOM) Limited and Southern Coalfields Limited
Limited
Capacity 200 MW 200 MW 25 MW
Location Tumkur, Karnataka Mandsaur, Madhya Pradesh Paschim Bardhaman, West

Bengal
Tender scope EPC EPC EPC
Category Open DCR Open
Allocation basis EPC and O&M cost bidding EPC and O&M cost bidding EPC cost bidding (e-auction)
(e-auction) (e-auction)
Solar park availability Yes Yes -
Project size 4 x 50 MW 2 x 100 MW 25 MW
Benchmark tariff - - -
Financial criteria Average annual turnover of Minimum average annual Minimum average annual
greater than or equal to INR 2 turnover of INR 2.70 billion turnover of INR 1.12 billion
billion/ 50 MW during any three during FY 2015 – FY 2017; during FY 2015 – FY 2017
financial years during FY 2013 – Working capital/line of credit of
FY 2017; Minimum net worth of INR 540 million
INR 5 million/ MW
Deposits and bank - EMD – INR 108 million per 100 Bid security of INR 10.34 million
guarantees MW project
Rooftop solar
There was a more than 100% increase in issuance of new rooftop solar tenders
with capacity more than 1 MW. New tenders aggregating more than 220 MW
were issued in Q4 2017.
Table 4.2: Rooftop solar tenders issued in Q4 2017
Tendering authority Capacity, MW
Haryana Renewable Energy Development Agency 50
Rajasthan Electronics & Instruments Limited 50

15
Madhya Pradesh Urja Vikas Nigam Limited 40
Railways Energy Management Company Limited 32
Rajasthan Renewable Energy Corporation Limited 18
Cochin International Airport Limited 10
Delhi Metro Rail Corporation 8

Total 223

Note: This table excludes tenders with capacity less than 1 MW.

4.2 Tender cancellations
Projects with a total capacity of 718 MW including a 250 MW project already
allocated to Azure Power for sale of power to New Delhi Municipal Council
(NDMC) were cancelled in Q4 2017. Most of these were issued by NTPC in
Q3 2017 under DCR stipulation. These tenders were cancelled because they
were in contravention of the WTO norms. As per the WTO ruling, DCR projects
selling power to entities other than government-owned undertakings needed
to be commissioned by December 31, 2017.
Most of the other cancelled EPC tenders (100 MW in Andhra Pradesh, 86 MW

in Gujarat, and 15 MW in Telangana) are expected to be reissued under open
category.
Table 4.3: Tenders cancelled in Q4 2017

Tendering Capacity, MW Date of tender Location Tender scope
authority issuance
NTPC 250 Q3 2017 Pan India Project
development
225 Q3 2017 Uttar Pradesh EPC
86 Q3 2017 Gujarat EPC
22 Q3 2017 Uttar Pradesh EPC
12 20 Q3 2017 Andhra EPC
10 Pradesh
15 Q3 2017 Telangana EPC
8
APGENCO 100 Q2 2017 Andhra EPC
6
Pradesh
4 Total 718
2
0
Q1 2016 Q2 2016 Q3 2016 Q4 2016
Q1 2017 Q2 2017 Q3 2017 Q4 2017
4.3 Tender results
No. of project development tenders No. of EPC tenders
Results were announced in Q4 2017 for three utility scale solar tenders
including NTPC 250 MW (cancelled subsequently), and SECI 500 MW and 250
MW in Bhadla solar park.
Figure 4.4: Auctions results in 2017, INR/ kWh
4.00 3.47 3.14

3.30
3.15 2.63 2.67 2.49 2.49
3.00 2.45
2.00 2.62 2.44 2.65 2.47 2.48
1.00
0.00
Madhya Pradesh
750 MW, Feb-17
NTPC Andhra Pradesh

250 MW, Apr-17
SECI Rajasthan
250 MW, May-17
SECI Rajasthan
500 MW, May-17
Tamil Nadu
1,500 MW, June-17
500 MW, Sep-17
NTPC 250 MW,

Oct - 17 (cancelled)
SECI Rajasthan
500 MW, Dec - 17
SECI Rajasthan
250 MW, Dec - 17
Gujarat

N
NTPC An
25
Ma
75
1,500
50
500
S
S
25
50
Oct -
NTPC 250 MW DCR tender (project development) (cancelled subsequently)
The lowest recorded bid under this tender was INR 3.14/ kWh by Azure Power.
Figure 4.5: Bid results of NTPC 250 MW tender

900 6.0
Successful Unsuccessful bids
800
bids 4.95 5.0
700 4.44
Tariff, INR/ kWh

600 3.95 4.0
Capacity, MW
100
500 3.14 3.15
25 3.0
400 150
250
300 250 2.0
200
1.0
100
0 -
Azure Power
ReNew
Waaree
Canadian Solar
Adani
SECI Rajasthan Bhadla solar park 500 MW and 250 MW (project development)
Auctions were held for both these tenders in December 2017. Both tenders
were oversubscribed by more than 5x. In the 500 MW tender, Hero Solar (300
MW) and Softbank (200 MW) were the winning bidders with tariffs of INR 2.47/
kWh and INR 2.48/ kWh respectively. The 250 MW tender was won by Azure
Power (200 MW) and ReNew with bids of INR 2.48/ kWh and INR 2.49/ kWh
respectively.
These tariffs are only marginally higher than the previous tariff of INR 2.44/
kWh seen in similar auctions in the same solar park in May 2017. Given that
execution costs (and risk) has increased significantly in the last 6 months due
to increase in costs of modules and several other inputs plus imposition of GST
and custom duties, these tariffs appear relatively much more aggressive. We
believe that slowdown in tender pipeline is the primary reason for developers
to be bid so aggressively.

3,500 3.5
3.22 3.29
Successful Unsuccessful bids 3.03 400
3,000 bids 2.91 2.92 2.92 3.0
2.78
2.47 2.48 2.49 2.49 300 100
2,500 2.5
Tariff, INR/ kWh

500
Capacity, MW
Figure 4.6: Bid results of SECI Rajasthan 500 MW tender
2,000 2.0
3,500 400 100 3.5
1,500 Successful Unsuccessful 300 3.22 3.29 1.5
bids 3.03 400
3,000 bids 2.91 2.92 2.92 3.0
200 2.78
1,000 300 2.49 300 100 1.0
2.47 2.48
200 2.49
2,500 2.5
Tariff, INR/ kWh

500
Capacity, MW
500 300 0.5
2,000 2.0
0 400 100 -
1,500 1.5
Hero
Softbank
Softbank
Sprng
Azure
FRV
Rutherford
ReNew
Acme
Bastille Solar
Electro Solaire
300
200
1,000 300 1.0
200
500 300 0.5
0 -
Hero
Softbank
Softbank
Sprng
Azure
FRV
Rutherford
ReNew
Acme
Bastille Solar
Electro Solaire
Figure 4.7: Bid results of SECI Rajasthan 250 MW

1,600 3.24 3.5
Successful Unsuccessful bids 3.04
1,400 50
bids 100 3.0
2.57 2.62 2.63
1,200 2.48 2.49 2.49 2.52
2.5
Tariff, INR/ kWh

Capacity, MW
1,000 150
250 2.0
800 100
1,600 250 3.24 3.5
Successful Unsuccessful bids 3.04 1.5
600
1,400 50
bids 100 3.0
200 2.62 2.63
400 2.48
1,200 2.49 2.52 2.57 1.0
2.49
50
2.5
Tariff, INR/ kWh

200
Capacity, MW
200
1,000 150 0.5
250 2.0
800 0 100 -
250
1.5
Azure
ReNew
ReNew
Softbank
Sprng
Hero Solar
FRV Solar
Rutherford Solar
600 Segur Solar

200
400 1.0
50
200 0.5
200
0 -
Azure
ReNew
ReNew
Softbank
Sprng
Hero Solar
FRV Solar
Rutherford Solar
Segur Solar
SECI 500 MW rooftop tender for government buildings

SECI announced the final list of successful bidders under its 500 MW rooftop
tender for government buildings across India. Only 45% of the tendered
capacity has been allocated so far but bidders have the flexibility to match
L1 and win more capacity. For CAPEX projects (allocation of 20 MW), the
ex-subsidy installation cost varies across states from INR 25,000/ kWp in
Uttarakhand to INR 69,500/ kWp in Nagaland. For projects under RESCO
model (allocation of 206 MW), the winning tariff varies from INR 2.20/ kWh in
Andaman and Nicobar Islands to INR 4.59/ kWh in Bihar.
Main winners under CAPEX model include BVG India (4 MW), Sunsure (1
MW) and Swelect (1 MW). Those under RESCO model include Azure (47 MW),
CleanMax (20), Hero (14), ReNew (14), TEP Solar (12), Mytrah (12), Fourth
Partner (12) and others.

4.4 Tenders pending allocation
A total of 15 utility scale tenders with a total capacity of 3,630 MW are pending
allocation. Apart from KREDL 860 MW tender, which provides a ‘change in law’
protection against duties on modules, we do not expect any auctions to happen
imminently.
Table 4.4: Tenders pending allocation
Tendering authority Capacity, MW Date of tender Location Tender scope Solar park
issuance availability
SECI 200 Q4 2017 Madhya Pradesh EPC Yes
50 Q2 2017 Himachal Project No
Pradesh development
35 Q2 2017 Puducherry Project No
development
MAHAGENCO 300 Q4 2017 Maharashtra Project No
development
65 Q4 2017 Maharashtra Project No
development
200 Q3 2017 Maharashtra EPC No
60 Q3 2017 Maharashtra Project No
development
MSEDCL 1,000 Q4 2017 Maharashtra Project No
development
KREDL 860 Q4 2017 Karnataka Project No
development
200 Q4 2017 Karnataka EPC Yes
Energy Efficiency Energy Limited 200 Q3 2017 Maharashtra EPC No
(EESL)
NLC 250 Q4 2016 Odisha EPC No
Gujarat State Electricity 150 Q2 2017 Gujarat EPC Yes
Corporation Limited (GSECL)
Steel Authority of India Limited 50 Q2 2017 Tamil Nadu EPC No
(SAIL)
Southern Power Distribution 10 Q2 2017 Andhra Pradesh Project No
Company of Andhra Pradesh development
(APSPDCL)
Total 3,630

5. Pricing updates
5.1 EPC costs
EPC costs for utility scale projects increased by a further 5% to INR 39/ W in
Q4 2017 as against Q3 mainly due to a continued increase in prices of modules
and many other inputs. We expect EPC costs to stay at the same level in Q1
2018 despite an expected module price reduction mainly due to an increase in
balance of services (BoS) costs but it is expected to reduce to INR 37/ W in Q2
2018.
Figure 5.1: BTI India Solar EPC Price Index, INR/ W

60
60
50 Net
Net annual
annual increase
increase of
of 5%
5%
50 45
45 43 42
43 42
40 38 39
39 39
39
40 38 37
37 37
37
35
35 33
33
30
30
20
20
Q1
Q1 2016
2016 Q2
Q2 2016
2016 Q3
Q3 2016
2016 Q4
Q4 2016
2016 Q1
Q1 2017
2017 Q2
Q2 2017
2017 Q3
Q3 2017
2017 Q4
Q4 2017 Q1
Q1 2018
2018 Q2
2017estimated Q2 2018
2018
estimated estimated
estimated
5.2 Solar modules

Module prices in Q4 were at around USD 0.36/ W, 6% higher than in Q3. The
prices are expected to see a marginal reduction in Q1 and Q2 2018. Figure 5.2
BTI India Solar Module Price Index
Figure 5.2: BTI India Module Price Index, USD cents/ W

60
60 Net annual
annual reduction
reduction of
of 3%
3%
Net
47
47 44
44 42
42
40 37
37 34 36 34
40 33
33 30 34 36 34 32
30 32
20
20
0
0
Q1
Q1 2016
2016 Q2
Q2 2016
2016 Q3
Q3 2016
2016 Q4
Q4 2016
2016 Q1
Q1 2017
2017 Q2
Q2 2017
2017 Q3
Q3 2017
2017 Q4
Q4 2017 Q1
Q1 2018
2018 Q2
2017 estimated Q2 2018
2018
estimated estimated
estimated

Note: These prices are for imported modules before GST or any other local taxes and
duties
3
3 2.4
2.4 2.3 2.2
2 5.3 Inverters
2.3 2.2 2
2 1.9
1.9 1.8
1.8 1.8
1.8 1.8
1.8 1.8 1.8
2 1.8 1.8
1 As expected, prices for 1,000 V central inverters have stabilized at around INR
1
1.80/ W. We expect prices to remain unchanged in Q1 2018.
0
0
Q1
Q1 2016
2016 Q2
Q2 2016
2016 Q3
Q3 2016
2016 Q4
Q4 2016
2016 Q1
Q1 2017
2017 Q2
Q2 2017
2017 Q3
Q3 2017
2017 Q4
Q4 2017 Q1
Q1 2018
2018 Q2
2017 estimated Q2 2018
2018
estimated estimated
estimated
60
60 52
52 49
49 48
48 45 44 44 45 45
45 44 42 44 45 45 43
43
40 42
40
20
20
20
0
60 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Net
Q1 2017 Q2reduction
annual 2017 Q3 of
2017
3% Q4 2017 Q1 2018 Q2 2018
47 estimated estimated
44 42
40 37 34 36 34
33 30 32
20 Figure 5.3: BTI India Solar Inverter Price Index, INR/ W

3
0 2.4 2.3 2.2 2
2 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q11.9 2017 Q31.8
2017 Q21.8 2017 Q41.8
2017 Q11.8
2018 Q21.82018
estimated estimated
1
0
Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018
estimated estimated
3
2.4 Source:
2.3BRIDGE2.2
TO INDIA research
2 1.9 1.8 1.8 1.8 1.8 1.8
2
601
5.4 Rooftop solar EPC costs
52
0
Average
49 EPC costs
48 for rooftop solar in Q4 2017 is estimated by us at INR 45/
45 44 45
44in Q1 2018 45
Q1 2016 Q2 2016 Q3 2016 Q4 2016toQ1
W. The costs are expected remain
2017 Q2unchanged
42
2017 Q3 2017 Q4 2017and
Q1see
2018a marginal
Q2 43
2018
40 reduction in Q2 2018. estimated estimated
Figure 5.4: BTI India Rooftop Solar EPC Cost Index, INR/ W
20
60
Q152
2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018
49 48 estimated estimated
45 44 44 45 45 43
42
40
20
Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018
estimated estimated

6. Funding
6.1 Equity funding
Private equity (PE)

Q4 2017 saw announcement of four PE deals in the sector. CleanMax
announced an investment of USD 15 million by International Finance
Corporation (IFC). UK Climate Investments, now a part of Macquarie group,
agreed to provide 49% equity for construction of Lightsource’s 60 MW project in
Maharashtra. It has also earmarked a further USD 40 million to develop around
300 MW of solar projects in India in partnership with Lightsource. In another
deal, London-based private equity fund manager Apis Partners invested USD
60 million in Greenlight Partners, which is an off-grid solar solutions provider
across Africa and Asia.
In addition to these, the Canadian pension fund manager CPPIB has proposed
to invest USD 144 million in ReNew by buying out Asian Development Bank’s
equity investment in the company.
Figure 6.1: PE fund flow in the Indian solar sector, USD million
600
500
400
300
200
100
0
Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017

Table 6.1: Key PE transactions in 2017
Company Investor Amount, USD Quarter

million
ReNew JERA 200 (for a 10% Q1 2017
stake)
Greenko GIC, 124 Q1 2017
Abu Dhabi Investment Authority 31
Hero Futures IFC 125 Q1 2017
Oriano Solar SIDBI (Smridhi Fund) 3 Q1 2017
IgrenEnergi BB Tower NA Q1 2017
Sprng Actis 500 Q2 2017
Azure Power Hareon Solar 11 Q2 2017
Mera Gao Power Engie Impact Fund, ElectriFI 3 Q2 2017
Tata Cleantech Tata Capital 25 Q2 2017
IFC 6
CleanMax Warburg Pincus 70 Q3 2017
Greenlight Planet Apis Partners 60 Q4 2017
CleanMax IFC 15 Q4 2017
Lightsource UK Climate 5 Q4 2017
Investments
Oorjan Cleantech Globevestor 0.45 Q4 2017
Mezzanine capital
There was no new deal in Q4 2017.
Capital markets
IEX launched its IPO with an aim to raise INR 10 billion. The issue was
oversubscribed by more than two times. Meanwhile, IREDA filed draft
prospectus with the Securities and Exchange Board of India (SEBI) to sell 139
million equity shares to raise about INR 8,500-9,000 million.
After trading consistently below benchmark indices for many months, the three
listed renewable independent power producer (IPP) stocks—Azure, Mytrah
and Orient—showed good trading performance in relation to their benchmark
indices.
Figure 6.2: Renewable stock trading pattern vs indices

Azure Power Mytrah Energy Orient Green
140
120
100
80
60
Oct-17 Nov-17 Dec-17 Oct-17 Nov-17 Dec-17 Oct-17 Nov-17 Dec-17
Azure NYSE Mytrah LSE Orient NSE

6.2 Debt funding
State Bank of India reduced its marginal cost of funds based lending rate
(MCLR) from 8.00% to 7.95% in November 2017 as against in Q3 2017.
But interest rates have started hardening recently because of various
macro-economic factors. Solar projects are able to raise up to 20-year INR
denominated project finance debt at a cost of around 9.50-10.50% per annum.
Table 6.2: State Bank of India MCLR

MCLR (1 year)
December 2013 9.80%
December 2014 10.00%
December 2015 9.30%
December 2016 8.90%
December 2017 7.95%
Source: State Bank of India website
Offshore debt funding

International investors and financial institutions continued to show strong
interest in the Indian RE financing. The World Bank extended a USD 98 million
debt facility to IREDA to fund development of large scale solar parks. EIB
provided a USD 200 million loan for renewable energy projects being developed
by private developers in India and confirmed that another USD 940 million
funding has already been approved for small RE projects across India.
The bonds market also remained active during Q4 2017 with IREDA and PFC
successfully raising funds through issue of green bonds. Azure and Cleantech
Solar raised funds from Dutch firm FMO and Switzerland-based responsAbility
Investments respectively.
Table 6.3: Offshore debt funding deals
Company/ entity Facility Amount, Quarter

USD million
ReNew Masala bonds 450 Q1 2017
ReNew ADB (LEAP) 390 Q1 2017
SBI EIB line of credit 200 Q1 2017
Tata Cleantech Green bonds issued to IFC 40 Q2 2017
Greenko Green bonds 1,000 Q3 2017
Azure Green bonds 500 Q3 2017
Rural Electrification Corporation Green bonds 450 Q3 2017
L&T Infrastructure Finance Green bonds issued to IFC 103 Q3 2017
Power Finance Corporation Green bonds 400 Q4 2017
IREDA Green masala bonds 300 Q4 2017
Various IPPs EIB line of credit 200 Q4 2017
IREDA Loan from the World Bank 98 Q4 2017
Azure Debt financing from FMO 31 Q4 2017
Cleantech Solar Loan from responsAbility 20 Q4 2017

6.3 Mergers and acquisitions
The wave of consolidation continued in the sector in Q4 2017. A consortium led
by Global Infrastructure Partner acquired 100% stake in Equis Energy, which
has a wind, solar and hydro portfolio aggregating to 11,135MW across the Asia
Pacific region, for USD 5 billion including USD 1.30 billion in debt. The portfolio
includes over 600 MW of commissioned and under construction RE assets in
India including 260MW of solar capacity. Meanwhile, Greenko, Hero and ReNew
are actively scouting to acquire solar projects of companies like Essel Infra,
Waaree, Ostro, Orange and SkyPower.
Figure 6.3: M&A in the Indian solar market
600 8
7 7
500
6
400
5
300 4
3
200
22 2
100
11 1 1
- -
Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017
Number of reported deals
Table 6.4: M&A transactions in Indian solar sector in 2017
Buyer Seller Capacity Stake Deal value, Quarter

acquired USD million
Sembcorp Industries IDFC - 28% 220 Q3 2017
Alternatives
Vector Green (IDFC Alternatives) First Solar 190 MW - 300 Q3 2017
Global Infrastructure Partners, Equis Energy 260 MW 100% - Q4 2017
China Investment Corporation,
CPPIB, CIC Capital
Source: BRIDGE TO INDIA research; company press releases

7. Policy and regulatory updates
7.1 Central government

Domestic solar cell manufacturers file a petition to impose safeguard duty on
imports
Five domestic solar cell manufacturers—Indosolar, Jupiter Solar, Mundra
Solar, Websol Energy and Helios Photo Voltaic (formerly, Moser Baer)—
submitted a petition on December 5, 2017 for imposition of safeguard duty on
imports of cells and modules for four years.
The Directorate General of Safeguards (DGS) concluded from its preliminary

investigation that cell and module imports have caused and are threatening
to cause serious injury to domestic manufacturers. It has recommended
imposition of a 70% provisional safeguard duty on all imports of cells and
modules to India for a period of 200 days. We believe that safeguard duty would
result in significant tariff pressure and slow down sector activity until a final
decision is announced. Meanwhile, new tenders from KREDL and Gujarat
have allowed developers protection from duties under revised ‘change in law’
provision.
MNRE releases concept note for a new rooftop solar scheme

MNRE has issued a concept note for a new rooftop solar scheme, entitled
SRISTI. Recognizing the critical role of DISCOMs, the scheme proposes to
make them the primary implementing agency for rooftop solar by making
them responsible for information dissemination, demand aggregation, bidding
process and capacity building. The scheme also envisages financial support
to the tune of INR 144.50 billion for DISCOMs based on 5-15% of project cost
of incremental grid connected rooftop solar installations in non-residential
sectors. Another key elements of the proposed scheme is provision of INR 90
billion in capital subsidies for residential rooftop installations with a capacity of
up to 5 kWp.
We believe that DISCOMs are indeed best suited to play the implementation
and facilitation role in promotion of rooftop solar. Positioning them as a key
stakeholder and supporting them financially is a sensible move and addresses
one of the biggest challenges facing the sector. However, DISCOMs would need
hand holding for meeting the assigned responsibilities, which are critical for
the success of the proposed scheme.
MNRE introduces lab policy for testing, standardization and certification for
RE sector
MNRE has released this policy with an aim to develop and update Indian
standards for all RE systems, improve lab testing infrastructure in line with
international standards and make performance certification mandatory for all
systems and components. Under the policy framework, MNRE proposes to:
i) set up a standards, test and quality control committee and respective

sub-committees to oversee and coordinate development of standards,
testing and certification practices in the sector and monitor its
implementation by test labs;
ii) strengthen the three MNRE institutions to enhance their research and
development (R&D), technology validation, testing and certification capacity;

iii) expand existing lab infrastructure by encouraging various scientific and
technology institutes to set up secondary test labs for RE.
In view of the rising share of RE in electricity mix and persistent concerns

about quality, this policy is a good first step. But more needs to be done to
improve enforcement to tackle performance and quality related challenges in
the sector.
MNRE releases concept note to boost domestic solar manufacturing

In December 2017, MNRE published a concept note on making domestic
solar manufacturing competitive in India. A new scheme, to be operated by
IREDA, aims to promote integrated manufacturing to reduce India’s import
dependency. It targets creation of manufacturing capacity of 10 GW over a
period of five years. Key elements of the proposed scheme include:
i) direct financial support of more than INR 110 billion to domestic

manufacturers in the form of capital subsidy of up to 30% for upfront
investments or interest subsidy of 3% on loans taken by domestic
manufacturers;
ii) custom duty exemption for capital goods and cheaper power supply to
manufacturing facilities by states;
iii) assured market through procurement of 12,000 MW of domestic modules

by public sector units;
iv) gradual expansion of scope of domestic manufacturing from modules

to cells and eventually to wafers and poly silicon to promote backward
integration;
The concept note is a patchwork of old ideas and domestic manufacturing

needs a much wider policy reform for a genuine boost.
7.2 State government

Uttar Pradesh and Goa unveil new solar policies
Uttar Pradesh Solar Energy Policy 2017 lays a roadmap to achieve an ambitious
solar installation target of 10,700 MW including 4,300 MW of rooftop solar
capacity by 2022. The policy will be operative for five years. It aims to put in
place a single window clearance system for all solar projects, allows banking
of energy and exempts electricity duty on sale of solar power to distribution
licensee for next 10 years. For other types of solar projects, it offers the
following incentives:
i) for solar projects of 5-10 MW, 10-50 MW and greater than 50 MW set up
for sale of power to DISCOMs, the state government will bear the cost of
laying transmission lines up to 10 km, 15 km and 20 km respectively;
ii) 50% exemption on wheeling charges and 100% exemption on cross

subsidy surcharge and transmission charges for open access projects;
iii) capital subsidy of INR 15,000/ kW for residential rooftop systems up to 2

kW in size, for a total of 100 MW, in addition to central financial assistance
provided by MNRE.

Meanwhile, Goa also released its new solar policy, which shall remain in
operation for seven years from the date of notified in official gazette of Goa.
It allows power consumers with less than 100 kW solar load to opt for gross
metering and makes net metering mandatory for those with larger installed
capacities. It also puts in place a clear mechanism for permissible delays
in commissioning and related penalties to ensure timely project execution.
The state government provides the following incentives to promote solar
installations in the state:
i) for grid connected small consumers with less than 100 kW of solar load,
the state government shall provide 50% of the project’s capital cost as
interest free loan;
ii) for off grid consumers with capacity of less than 100 kW, state
government shall provide 30% capital subsidy;
Madhya Pradesh reinstates ‘must run’ status for RE

In a major relief to the sector, the Madhya Pradesh Electricity Regulatory
Commission (MPERC) excluded RE generation from applicability of merit
order dispatch principle through an amendment to MPERC (Cogeneration and
Generation of Electricity from Renewable Sources of Energy) Regulations,
2017. Madhya Pradesh had become the first state in India to propose removal
of the ‘must run’ status for RE and subject them to merit order dispatch
principles in August 2017.
Irrespective of the formal ‘must run’ status, solar and wind energy sources
are expected to remain at the top of the dispatch list, given their negligible
variable cost of production. However, effective implementation of ‘must run’
status, which guarantees 100% uptake of RE generation, provides an important
support mechanism for reducing curtailment risk.
Solar open access market regulations undergo changes in various states

In a negative development for the open access market in Madhya Pradesh,
cross subsidy surcharge (CSS) as well as additional surcharges have become
applicable for captive and open access consumers, who were completely
exempted from these charges earlier.
Meanwhile, Haryana has clarified that the exemption from electricity taxes,
cess and duty, wheeling charges, CSS, transmission and distribution charges
and surcharges will be waived off for solar power projects in the state for a
period of 25 years. This should provide a boost to the sector in the state subject
to land acquisition constraints.
7.3 Others
i) MNRE has published draft Technology Development and Innovation Policy
with an aim to promote indigenous technology development, enhancing
quality and reliability of power supply from RE.
http://mnre.gov.in/file-manager/UserFiles/Draft-TDIP_RE.pdf
ii) Central Electricity Regulatory Commission (CERC) has issued an

amendment to Sharing of Inter-State Transmission Charges and Losses
Regulations, 2010 to extend exemption from transmission charges and
losses for the use of inter-state transmission system for solar power

projects commissioned before December 31, 2019. The exemption is only
for projects awarded through competitive bidding and selling power to
DISCOMs directly or indirectly.
http://www.cercind.gov.in/2017/regulation/137_N.pdf
iii) CERC has issued draft CERC (Grant of Connectivity and General Network
Access to the Inter-State Transmission System and other related matters)
Regulations, 2017 to lay down a formal two-stage procedure for granting
connectivity to RE plants within 120 days of applying. The application for
general network access is required to be submitted two years prior to the
expected day of commissioning.
http://www.cercind.gov.in/2017/draft_reg/GNA.pdf
iv) Gujarat Electricity Regulatory Commission published Net Metering

Rooftop Solar PV Grid Interactive Systems (First Amendment)
Regulations, 2017 to exempt residential consumers from the rule on
maximum size of the installed rooftop solar system to be lower than 50%
of the consumer’s sanctioned/contract load.
http://gercin.org/uploaded/document/f96a77e1-0e98-4d93-94a6-
19c9d14ba333.pdf
v) Rajasthan Electricity Regulatory Commission has approved annual

revenue requirement (ARR) and retail tariffs for FY 2017 and FY 2018.
The aggregate approved ARR for all three DISCOMs for FY 2018 was INR
382.69 billion as against proposed INR 443.55 billion. RERC also accepted
the DISCOMs proposal to not revise tariffs in FY 2018.
http://rerc.rajasthan.gov.in/TariffOrders/Order273.pdf
vi) Karnataka Electricity Regulatory Commission (KERC) has issued an order

clarifying PPA status for rooftop solar, where PPAs were cancelled due
to delays in project commissioning. It has allowed such projects to sign
fresh PPAs with revised tariffs in accordance with prevailing regulations.
http://www.karnataka.gov.in/kerc/Court%20Orders/OO%202017/
Dated%2007.11.2017-Tariff%20Order%20for%20SRTPV%20plants%20
violating%20the%20norms%20specified%20for%20implementation%20
of%20the%20SRTPV%20plants.pdf
vii) Odisha Electricity Regulatory Commission has issued draft OERC (Mini
Grid Renewable Energy Generation and Supply) Regulation, 2017 with an
aim to promote RE generation through mini-grid projects. It spells out
operational modalities for mini grids in areas where the grid reaches post
installation or is already available.
http://www.bridgetoindia.com/wp-content/uploads/2018/02/OERC-mini-
grid-regulation-1.docx
viii) KERC has issued a draft amendment to Procurement of Energy from

Renewable Sources Regulations, 2011 to propose an increase in solar
renewable purchase obligation (RPO) to 3.50% and 6.75% for FY 2018
and FY 2019 respectively as against earlier approved levels of 1.25% and
2.50%.

http://www.karnataka.gov.in/kerc/Regulations/Regulations/KERC%20
(Procurement%20of%20Energy%20from%20Renewable%20Sources)%20
(Fifth%20Amendment)%20Regulations_2017.pdf
ix) Tamil Nadu Electricity Regulatory Commission has issued draft

Forecasting, Scheduling and Deviation Settlement for Solar and Wind
Generation Regulations, 2017. The regulations are largely in line with
similar regulations in other states.
http://www.tnerc.gov.in/regulation/draft%20regulations/2017/Draft%20
FandS%20Regulations-28-12-2017.pdf

8. Key market insights
8.1 Project developers long for policy clarity

Solar project developers and investors have been receiving contrasting policy
signals from the government. On one hand, the new MNRE minister has called
the 100 GW solar target conservative and announced a new roadmap to issue
new tenders for 77 GW of capacity by March 2020. On the other hand, problems
such as GST, import duty and potential ADD/ safeguard duty on solar cells and
modules are damaging overall sentiment.
8.2 Solar companies look for business diversification

Concerned by weak demand, intense competition and general policy
uncertainty, Indian developers and EPC contractors are increasingly looking at
international expansion or entry into related business activities.
Nascent and emerging international markets in Middle East, Africa and

Southeast Asia are attractive options for these companies. These markets are
collectively expected to add over 11 GW of new solar utility scale capacity in
2018, up 67% over 2017. Sterling & Wilson has already built up substantial EPC
presence in countries such as South Africa, Saudi Arabia, UAE, Philippines and
Vietnam. Both Amplus and CleanMax Solar have also set up offices abroad.
Tata Power, Hero Future, Hindustan Power, Mahindra and Jakson are some
of the other names believed to be actively looking at international business
opportunities. Apart from these, companies including ReNew and Greenko are
planning to enter the transmission and distribution business.
8.3 Solar open access market shows promising growth

Installations in solar open access (OA) market grew at an impressive rate
of 190% in 2017 to reach a cumulative capacity of around 1,500 MW as on
December 31, 2017. Around 75% of this capacity is installed in four states—
Karnataka (22%), Madhya Pradesh (21%), Telangana (19%) and Andhra Pradesh
(12%).
Falling cost and attractive OA cost exemptions have been the main drivers
for growth in this market. Our analysis of 11 solar rich states shows that OA
power for industrial users is financially more attractive than grid power in all
these states. Developers are willing to take the captive/group captive route to
avoid payment of cross subsidy surcharge (CSS). Karnataka is seeing a major
installation rush right now because of OA cost exemptions expiring in March
2018 and we believe that more than 1,000 MW of new solar capacity may be set
up in the state in this financial year.

Figure 8.1: Comparison of industrial grid tariff with solar tariffs, INR/
kWh
8.00
6.00
4.00
2.00
0.00
Andhra Pradesh
Madhya Pradesh
Maharashtra
Uttar Pradesh
Karnataka
Haryana
Rajasthan
Telangana
Tamil Nadu
Gujarat
Punjab
Grid tariffs for industrial consumers Solar power cost
Solar power cost for captive consumers
However, frequent changes in regulations, especially regarding CSS, makes

growth in the market unpredictable. For instance, Madhya Pradesh’s removal
of CSS and additional surcharge (AS) exemptions in November 2017 makes the
state unattractive for OA projects.
60
53
50
40
34
30
20
15
10
0
2015 2016 2017
Q1 Q2 Q3 Q4
60
52.83
50
40
© 34
BRIDGE TO INDIA, 2018 Page 44
30
6.00
4.00
2.00
0.00
Andhra Pradesh
Madhya Pradesh
Maharashtra
Uttar Pradesh
Karnataka
Haryana
Rajasthan
Telangana
Tamil Nadu
Gujarat
Punjab
9. International developments
9.1 China breaks its own record

Grid tariffs for industrial consumers Solar power cost
After
Solarrecording
power costan
forinstallation record of 34 GW in 2016, China has set another
captive consumers
record by installing 53 GW in 2017 and reaching a total installed capacity
base of 130 GW. This is not only way above all market expectations but is
also 18% higher than its 110 GW target for 2020. While Q2 is normally the
biggest quarter in China because of the June 30 feed-in-tariff (FIT) deadline,
Q3 witnessed the highest installations in 2017. This was mainly because
of extension of FIT deadline beyond June 30, 2017 by a few provinces and
the September 30 deadline of China’s Top Runner program. Sustained high
demand was the main reason for module prices staying firm during Q3 and Q4
last year.
Figure 9.1: Quarterly solar installation capacity in China, GW
60
53
50
40
34
30
20
15
10
0
2015 2016 2017
Q1 Q2 Q3 Q4
Source: AECEA, BRIDGE TO INDIA research
While utility scale ground-mounted projects comprise a majority (60%+) of the

annual installation, there was a significant surge in distributed solar projects
with installation of an estimated 19 GW in 2017, growth of 350% over 2016.
There are now talks of revising the 2020 solar target from 110 GW to 200 GW.
9.2 US ITC provides range of recommendations for

restricting solar equipment imports
60
US ITC submitted its 52.83
final recommendations on safeguard duty on c-Si
50 photovoltaic cells in November 2017. By the time of printing of this report,
the USA President had announced its final decision to impose a 30% tariff on
40 imported cells and modules, reducing by 5% points every year for a period of
34
four years. This tariff will not be applicable on the first 2.5 GW of imports every
30 year. The tariff imposed is less than the US ITC recommendation and final solar
system prices are expected to go up by only between 6-10%. That makes us
20 believe that final impact on USA demand and module prices elsewhere would
15.15
be minimal. Importantly, for the Indian manufacturers, India is included in a
10
list of beneficiary countries that are exempt from tariffs for up to 3% of annual
imports subject to a maximum of 9% total from all such countries.
0
2015 2016 2017
Q1 Q2 Q3 Q4
9.3 Chinese module manufacturers exiting the US public
equity market
Chinese module manufacturing companies are increasingly delisting from
the USA stock market. This trend was started by Trina, which became the
first Chinese solar company to delist from New York Stock Exchange in March
2017. JA Solar and Canadian Solar have also subsequently confirmed similar
plans. The main reason behind this phenomenon is believed to be lower
than expected valuation of these companies on the US stock market. Falling
prices and high import tariffs in the USA and EU have created a fear amongst
investors about financial viability of these businesses.
However, we believe that improving price outlook and continued growth in

annual demand means that solar module manufacturers are in reasonable
financial health. They continue to expand their manufacturing capacity, move
up the technology curve and expand their operations in other countries
including in the USA, Middle East and Asia. The companies hope to get better
investment response in other markets. Trina has already expressed its interest
to relist in its home country, China. Others may follow suit.

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BRIDGE TO INDIA Solar Compass Q4 2017

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INDIA SOLAR

Safeguard duty looms

© BRIDGE TO INDIA, 2018 Page 1

This report is meant to be read only by registered, paying subscribers. Sharing,

© BRIDGE TO INDIA, 2018 Page 2

4. Tender progress updates 22

7. Policy and regulatory updates 37

8. Key market insights 43

© BRIDGE TO INDIA, 2018 Page 3

© BRIDGE TO INDIA, 2018 Page 4

Figure 1: Total installed and pipeline capacity as on

State offtake SECI offtake

Source: BRIDGE TO INDIA research

Q4 2017 saw commissioning of only 1,503 MW of utility scale projects, as

© BRIDGE TO INDIA, 2018 Page 5

Central government tenders State government tenders Others

Source: BRIDGE TO INDIA research

Ongoing slippages mean that Q1 2018 should be a busy quarter with an

Private sector performance

Sungrow captured a large market share (27%) in the inverter market in Q4

© BRIDGE TO INDIA, 2018 Page 6

Equipment and EPC cost trends

Utility scale EPC costs Rooftop solar EPC costs

© BRIDGE TO INDIA, 2018 Page 7

© BRIDGE TO INDIA, 2018 Page 8

Figure 1.1: Total installed and pipeline capacity as on December 31,

State offtake SECI offtake

Source: BRIDGE TO INDIA research

© BRIDGE TO INDIA, 2018 Page 10

Commissioned capacity-central government tenders Commissioned capacity-state government tenders

Source: BRIDGE TO INDIA research

Figure 1.3: State-wise rooftop solar installed capacity, MW

© BRIDGE TO INDIA, 2018 Page 11

Figure 1.4: Top 20 developers by commissioned capacity, MW

Source: BRIDGE TO INDIA research

© BRIDGE TO INDIA, 2018 Page 12

Figure 2.1: Quarterly utility scale solar capacity addition by type of

Source: BRIDGE TO INDIA research

Most of the DCR projects have already been commissioned. 70 MW of DCR

© BRIDGE TO INDIA, 2018 Page 13

Source: BRIDGE TO INDIA research

Details of key projects commissioned in Q4 2017 are given below.

© BRIDGE TO INDIA, 2018 Page 14

NTPC Rajasthan 100 MW DCR tender (auction – Q3 2016, COD target – Q4

Figure 2.3: Anticipated/scheduled vs actual capacity addition in

NTPC Rajasthan 100

NTPC Karnataka 100

Source: BRIDGE TO INDIA research

2.2 Estimate for Q1 2018 and Q2 2018

Central government tenders State government tenders Others

© BRIDGE TO INDIA, 2018 Page 15

Central government tenders State government tenders Others

Source: BRIDGE TO INDIA research

© BRIDGE TO INDIA, 2018 Page 16

3.1 Project developers

Figure 3.1: Developer wise capacity commissioned, MW

© BRIDGE TO INDIA, 2018 Page 18

3.3 Domestic manufacturers

i 2% 2 53 Vikram Solar continued to be the

Source: BRIDGE TO INDIA research

© BRIDGE TO INDIA, 2018 Page 19

Figure 3.4: Market share of inverter suppliers, MW

3.5 EPC contractors