How the Stakeholders of Solar Are Driving India's Energy Transformation Adani Green Energy set to increase the solar portfolio by acquiring 205 MW solar assets from Essel Group at an enterprise value of INR 1,300 crore

As the world shifts towards renewable power, India has also ramped up its renewable power generation capacity. The Indian renewable energy sector is the fourth most attractive renewable energy market in the world. Having recently achieved the status of the lowest-cost producer of solar power, the nation is said to be driving the global energy transformation.

With the increased support of government and improved economics, the sector has become attractive from an investors perspective. According to data released by the Department for Promotion of Industry and Internal Trade (DPIIT), FDI inflows in the Indian non-conventional energy sector between April 2000 and March 2019 stood at US$ 7.83 billion.

More than US$ 42 billion has been invested in India's renewable energy sector since 2014. New investments in clean energy in the country reached US$ 11.1 billion in 2018. As India looks to meet its energy demand on its own, which is expected to reach 15,820 TWh by 2040, renewable energy is set to play an important role.

Mergers & Acquisitions Leading the Game

With 28 deals, clean energy made up 27 per cent of US$ 4.4 billion merger and acquisition (M&A) deals which took place in India's power sector in 2017. In March 2018, ReNew Power finalized a deal estimated at US$ 1.55 billion to acquire Ostro Energy and make it the largest renewable energy company in India.

Adani Group seems to be well on its way to becoming one of the biggest creators of green energy in the country. Their renewable company, Adani Green Energy Limited (AGEL), currently manufacturing 2148 MW of solar power with 475 MW under construction is ready to acquire 205 MW solar assets from Essel Group at an enterprise value of INR 1,300 crore.

These 10 solar energy assets are in Punjab, Karnataka and Uttar Pradesh and have long-term power purchase agreements (PPAs) with various state-owned power distribution companies (discoms). Solar capacity has increased by eight times between FY14-18. India added record 11,788 MW of renewable energy capacity in 2017-18.

Government Playing the Sport

The Government of India has also ramped up the use of clean energy sources and is undertaking various large-scale sustainable power projects and promoting green energy heavily. The Ministry of New and Renewable Energy (MNRE) is currently working on a plan that aims at supplying more solar power into the grid, which in turn would reenergize stressed thermal projects, officials said Thursday.

According to PTI, with solar power tariffs dipping below thermal power, the government is keen on lowering electricity rates for consumers by mixing a higher share of solar energy. To promote the use of solar, MNRE has decided to provide custom and excise duty benefits to the solar rooftop sector, which in turn will lower the cost of setting up as well as generate power, thus boosting growth.

Notably, the world's largest solar park named "Shakti Sthala' was launched in Karnataka on March 2018 with an investment of US$ 2.55 billion. National Thermal Power Corporation Limited (NTPC), India's largest power generation company is now planning to set up large-scale solar power parks in the western part of the country starting with a 5-gigawatt park in the district of Kutch, Gujarat with a total investment of INR 20,000 crore.

Startups & MSMEs Taking Interest in Solar

Reportedly, in the first half of 2018, India installed 1 MW of solar capacity every hour. Government's increased interest in solar has attracted multiple organizations, big and small in utilizing this source of renewable energy through distinctive avenues. Various innovative startups have already started seeing it as an interesting opportunity for business whereas others have found a source of tangible savings in solar.

Bigbasket, India's first online grocery unicorn uses solar power in 7 of their Distribution Centers located in Bangalore, Gurgaon, Andhra Pradesh and Chennai. In the next 1 year, the company plans to install solar panels in 13 of their DCs. Post the usage of solar power, they have witnessed drastic carbon footprint reduction.

Brahmaprakash Lakshmipati, Head of Projects, New Facilities, Bigbasket said, "Solar power is an important aspect of our environment-friendly initiatives. We have already completed the installation of 1.6 MW capacity of rooftop solar and others are in different stages of completion. At the Bangalore facility, the per-unit cost of power has come down to INR 4.5."

Exploring the Solar Avenues

According to the State Rooftop Solar Attractiveness Index, Karnataka has emerged as the best state for setting up a rooftop solar project. Startups based in the state are leveraging the opportunity optimally. Selco India, a for-profit social enterprise, has added to the country's existing solar capacity by offering solar-powered lanterns, lights, microgrids, and stoves to rural citizens.

ZunRoof Tech Private Limited is another interesting player in the solar space. Touted as India's first fully automated solar solutions provider, ZunRoof offers the most affordable solar system installations across the country, with real-time IoT powered solar monitoring through the app. Increasing electricity demand and regular hikes in electricity tariffs have led to the growth of the rooftop solar market by over 80 per cent in 2018-19.

Apart from the boosted demand, "Increasing awareness among customers aided by high internet penetration when combined with favourable regulatory environment, affordable pricing and increased number of component suppliers make solar a very attractive industry for the coming decades," stated Pranesh Chaudhary, Founder & CEO, ZunRoof.