2. Partnership to Advance Clean Energy - Deployment (PACE-D) TA Program Consultation Workshop: Accelerating Solar Energy Deployment in Public Sector Undertakings 15th September, 2015 Presented by Anurag Mishra, Senior Clean Energy Specialist, USAID/ India

3. 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

4. 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

5. 4 Key Achievements

6. 5 Key Energy Sector Priorities

7. 6 Decentralized Generation Utility Scale Solar parks 25 GW Entrepreneur scheme 10 GW Rooftop solar 40 GW Other Utility scale solar 25 GW TargetKey Achievements 36 PSU’s committed for 19 GW of RE Solar Parks and Solar Rooftop Programs

8. 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 - 10000 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 - 10000 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

9. Solar PV implementation across the globe has followed two routes – large scale centralized generation or smaller scale distributed generation Solar Rooftop

10. 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 √√√√√

11. Solar rooftop space has seen a number of models emerge – basically based on ownership, metering and types of rooftops

12. 11 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

14. 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

15. 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

16. 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

17. 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

18. 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

19. 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

20. S. No.Name of PSUCapacity (MW)StateStatus 1Coal India1000Different states including AP and TG Planned (Mou with SECI) 2NTPC1000AP, RajasthanPlanned 3ONGC1GoaPlanned 4OIL5RajasthanCommissioned 5BHEL, PGCIL, SECI, SSL, REIL, SJVNL 4000RajasthanPlanned 6BHEL500MaharashtraPlanned 7SJVNL, Hindustan Salt 5000GujaratPlanned 8Neyvelli Lignite Corporation 20N/AImplemented Planned Solar Capacity by PSU

21. 20 PACE-D TA Program’s current engagement with Central PSUs Supporting IOCL in Developing Rooftop Projects at Refineries  Assisted IOCL in receiving allocation of 5 MW capacity.  Site assessment surveys at Barauni, Panipat and Vadodara refineries  Prepared pre-feasibility reports (PFRs)  Detailed site assessment feasibility report (DFR) for Panipat 2+ MW project.  Impact  Tenders floated for Barauni (for 1 MW) and Vadodara (for 0.5 MW)  Panipat tenders underway

22. 21 PACE-D TA Program’s current engagement with Central PSUs Supporting Indian Railways in Developing 50MW Solar Rooftop Projects under RESCO model  Standard Request for Proposal (RfP) for RESCO based implementation  Standard Power Purchase Agreement (PPA)  Assessment of selected sites to establish rooftop feasibility and evaluating challenges in program implementation  Detailed financial models to understand economics of solar rooftop systems and estimate acceptable range of tariffs

23. 22 Future engagement with IOCL and Indian Railways Supporting IOCL in developing and/or investing in large scale solar projects PACE-D TA Program is developing a strategy with IOCL for development of large scale solar investments with a focus on : Defining target size for proposed project(s) Prefeasibility assessments and business model design Revenue structure/s Land acquisition and financial modeling, etc. IR has a target of increasing its RE share to 10% of its total energy consumption by 2022. The PACE-D TA Program is assisting the Indian Railways in: Developing a strategy for deployment of solar over the next five years Supporting IR in developing a strategy for deploying 1,000 MW of solar

24. 23 Solar Rooftop Evaluation Tool (SRET)

25. 24 SRET works by first evaluating broad eligibility, followed by techno- commercial viability and finally risk assessment The SRET uses three stages for establishing the viability of Solar Rooftop Projects: 1.Screens the eligibility of the rooftop project based on a qualitative checklist 2.Captures and evaluates the technical and commercial parameters of the project 3.Assess the risks and conditions proposed for lending Step 1: Evaluating Eligibility Step 2: Techno-commercial Assessment Step 3: Risk Assessment and Financial Appraisal Objective: Establish broad viability by assessing key risks Qualitative checklist – analysis critical shortcomings which impact viability Utilizes key technical, commercial & regulatory parameters Objective: Analyze techno- commercial viability of project Focus on demand analysis, technical architecture & risks, costing & financing Utilizes technical & commercial inputs from applicant & lenders engineer Objective: Analyzes risks & financiability of the project/s with basis for a Go/ No Go decision Maps key risks associated with the project, evaluates whether appropriate mitigation strategies adopted

26. 25 The Solar Rooftop Evaluation Tool (SRET) layout shows the three stage/ sub-stages as well as the source of inputs for analysing the rooftop project Consumption Net and Gross Metering Profile of Roof Solar plant design Solar elec. gen. and consumption Operation and Maintenance Electricity Cost PPA Tariff Project and operation cost Term Loan Electricity Cost (Officer) PPA tariff (Officer) Term Loan (Officer) Risk Matrix Detail list of Contractual Risk Establishing Eligibility Stage 1 Techno-commercial Assessment Stage 2 Risk Assessment and Financial appraisal Risk Assessment and Financial appraisal Stage 3 Relationship Manager Applicant & Lender’s Engineer Lender’s Engineer and Banker Inputs Flow Components/Forms

27. Thank You PACE-D Partners Design and development of innovative financing mechanisms Microfinance Partners Capacity to design and implement supportive policies and regulations Implementation of techno-commercially viable pilots