Partnership to Advance Clean Energy - Deployment (PACE-D) TA Program Scaling Solar Rooftop Deployment in India 09 th September, 2015 Presented by Anurag Mishra, Senior Clean Energy Specialist, USAID/ India

2 U.S. –India bilateral program with the Ministry of Power and the Ministry of New and Renewable Energy A 5-Year, $19.5 million Technical Assistance Program Three components of the program: Energy Efficiency Renewable Energy and Cleaner Fossil The PACE-D TA Program aims to facilitate deployment of clean energy technologies via development of enabling environment, institutional capacity building and financing

3 Tasks under Renewable Energy Component Institutional Development and Strengthening of State Policy & Regulatory Framework for RE Deployment Improve capacity of SNAs and SERCs, and develop enabling policy and regulatory environment for market deployment of RE Create a RE market via demonstration of techno-commercially viable pilots in the off- grid/storage domain and develop a national level apex RE institution Market-driven RE Technology Deployment Technical Assistance and Capacity Building to Develop and Implement Innovative Finance Mechanisms Identify and design innovative financing mechanisms to facilitate deployment of market-driven RE Capacity Building, Training, Outreach, Dissemination and Sharing of Best Practices Improve capacities of stakeholders on policy, regulatory and technical aspects for large-scale RE deployment Regulator Partnership Build partnerships between regulators in India & the U.S. to bolster institutional capacity & practices in market Microfinance Support Program Enhance microfinance lending for RE technologies - particularly for women and energy access in rural areas

4 Key Achievements

5 Key Energy Sector Priorities

6 100 GW Solar Target Image source- BTI

Solar Rooftop  BESCOM’s Solar PV Rooftop Program launched [1.5 MW (16.5 MW- pipeline)]  Solar rooftop program for Rajasthan designed  IOCL 5MW Rooftop deployment at 3 refineries Policy Directive by IOCL - all buildings to deploy rooftop solar Proposed 30 MW rooftop deployment  Indian Railways : 50 MW Solar Rooftop Program  Solar Rooftop Evaluation Tool developed fort FIs  4 Training Programs on Solar Rooftop Solar Rooftop  BESCOM’s Solar PV Rooftop Program launched [1.5 MW (16.5 MW- pipeline)]  Solar rooftop program for Rajasthan designed  IOCL 5MW Rooftop deployment at 3 refineries Policy Directive by IOCL - all buildings to deploy rooftop solar Proposed 30 MW rooftop deployment  Indian Railways : 50 MW Solar Rooftop Program  Solar Rooftop Evaluation Tool developed fort FIs  4 Training Programs on Solar Rooftop Solar Pumping  Grid Connected Solar Pumping pilot with BESCOM: : 2 MW (256 pumps; 21 Cr)  Pilot implementation of Shared Service Model for Decentralized Solar Water Pumping: 0.05 MW Solar Pumping  Grid Connected Solar Pumping pilot with BESCOM: : 2 MW (256 pumps; 21 Cr)  Pilot implementation of Shared Service Model for Decentralized Solar Water Pumping: 0.05 MW Training & Capacity Building  Solar Energy Training Network (SETNET) Launched  National Workshop on Clean Energy Regulations & Policies Organized Training & Capacity Building  Solar Energy Training Network (SETNET) Launched  National Workshop on Clean Energy Regulations & Policies Organized Microfinance Support Program  Clean Energy Lending Program launched with 7 MFIs  Pilot lending projects initiated with 2 MFI’s solar products sold in 3 months Microfinance Support Program  Clean Energy Lending Program launched with 7 MFIs  Pilot lending projects initiated with 2 MFI’s solar products sold in 3 months Renewable Energy Financing  Decentralized Distributed Generation Debt Fund with The Climate Group (corpus Rs. 2.5 Crore)  Green Bonds - IIFCL (500 Cr.), IREDA & Yes Bank  Infrastructure Debt Fund (IDF-MF) - IIFCL (1000 Cr.)  Distributed Renewable Energy Community Fund with CREDA Renewable Energy Financing  Decentralized Distributed Generation Debt Fund with The Climate Group (corpus Rs. 2.5 Crore)  Green Bonds - IIFCL (500 Cr.), IREDA & Yes Bank  Infrastructure Debt Fund (IDF-MF) - IIFCL (1000 Cr.)  Distributed Renewable Energy Community Fund with CREDA PACE-D TA Program - Renewable Energy Achievements

Mainstreaming EE in Corporate Loans Solar - fastest-growing generation technology globally - key contributor has been solar rooftop. Large markets like U.S. and Germany - added more capacity through rooftop A number of drivers have been pushing the development of solar rooftop projects across the globe CountrySolar PV Installed Capacity (GW)Share of Rooftop PV (%) Germany~38~60% US~20~40% Japan~24~35% Australia~4~80% Solar Deployment areas/ benefits Supply gap reduction Energy security T&D loss reduction Stimulate investments Optimal utilization of infrastructure Large ground mounted solar projects √√√ Large commercial solar rooftop projects √√√√√ Small household based rooftops projects √√√√√

9 India’s solar rooftop market potential ~124 GW 13 States have notified Solar Policy’s supporting grid connected rooftop systems 19 states/ UTs have notified regulations for net metering/feed-in-tariff mechanisms 15% Government subsidy for non-commercial and non-industrial categories Accelerated depreciation benefits for industrial and commercial buildings Loans available under Priority Sector Lending Provision of bank loans as a part of home loan/ home improvement loan Loans for system aggregators from Indian Renewable Energy Development Agency Limited (IREDA) at concessional interest rate (9.9% to 10.75% per annum) India’s solar rooftop journey has just started and the government is providing various incentives

India has ambitious plans for Solar Rooftop Scale Up Plan – 40% of solar or almost 3 percent of power to come from solar rooftops This will propel India to one of the largest solar rooftop markets across the globe

The Indian solar rooftop space has just started moving towards market transformation (and scale) with development of a number of large solar rooftop projects Initial market development focused on - off-grid rooftop PV projects for captive consumption Grid connected rooftop PV has started to gain traction over last few years ( commissioned capacity ~ 50 MW) SECI’s solar rooftop program as well as stand alone programs of state governments have provided impetus SectorInstalled by SECI (MW)Installed by States (MW) Total installed (MW) Commercial Government Hospital Institutional (Schools, Collages) Religious institution Residential Total

While significant potential exists, the sector is still in infancy with development of the requisite eco-system is still falling into place Key challenges confronting the solar rooftop sector in India Policy and regulation Multiple incentive structures Limited Utility’s participation Complex Procedures and Processes Distribution Utility Preparedness Lack Standardized interconnection processes No Awareness of rooftop solar Limited Capacity of Utility personnel Financing No Financing products and guidelines/ norms Complex Tech and Commercial Risks Evaluation capacity of FI’s Market and Awareness Standards & certifications Evolving business models Contracting structures & their sanctity

The programmatic approach aims to: –create large scale economically more palatable projects through aggregation of sites; –leverage replication and deployment opportunities – across sectors with high energy costs –address key program development areas to reduce risks to key stakeholders –ensure greater standardization in standards, development processes and institutional structures for simple and efficient development of projects –create learning opportunities amongst stakeholders Programmatic Approach works with key stakeholders to build capacity, streamline processes, facilitate financing and scaled deployment of rooftop projects

The programmatic approach for deployment of large scale projects has created interest amongst consumers due to potential to lower costs and speed up the procurement process

Policy and Regulation Program Design Process Design and Standardization Financing Capacity Building Knowledge Creation Programmatic approach is working on policy advisory, program and process design, capacity building of key stakeholders and knowledge creation Rajasthan and Karnataka Indian Oil Corporation & IR BESCOM & JVVNL (IREDA & TATA Cleantech) NISE/ BESCOM/ JVVNL MNRE & GERMI

Identifying opportunities (IOCL & IR - Refineries, retail outlets and stations/ workshops) Defining potential/ location of sites – 3 refineries (IOCL), 4 workshops/ stations (IR)/ 500 retail outlets Feasibility Analysis and Business Case Development (IOCL/ IR) Allotment of Incentives/ deployment support (IOCL) Bid design and financial feasibility analysis Implementation Support (5 MW (IOCL) / 50 MW (IR) Program Design & Development Mapping process for interconnection for state utilities (BESCOM & JVVNL) Designing forms, formats, systems and procedures for rooftop for BESCOM & JVVNL Identifying Best Practices for Implementation & assisting adoption of standards and empanelment of suppliers Process Design We have been using the programmatic approach to address a number of diverse yet critical solar rooftop eco-system areas for sola rooftop deployment – the most critical of which have been Program Design and Process Design

Designing the Net Metering Framework for Solar Rooftop Program Roll out (Rajasthan) Supporting Utility Petition for rooftop & release of regulation (Rajasthan) Designing Alternate Incentive Structures for Rooftop Promotion (e.g. Feed in Tariffs for Karnataka) Policy & Regulation Best Practices Guide for Promotion of Solar Rooftop Solar Rooftop Evaluation Tool for FI’s Training Program design for Utilities and key stakeholders on solar rooftop Capacity Building/ Financing & Knowledge Management However we feel that designing the appropriate incentive structures and backing these up with the right tools like training and knowledge management are as important in the medium to long term

Thank You Key Partners: RE Component Design and development of innovative financing mechanisms Microfinance Partners Capacity to design and implement supportive policies and regulations Implementation of techno-commercially viable pilots