This document discusses the potential for grid parity of photovoltaic (PV) power in India's residential and commercial/industrial (C&I) sectors by 2020. It analyzes grid electricity prices and solar irradiation data across Indian states to estimate the levelized cost of electricity from PV under different growth scenarios. The analysis finds that some states like Gujarat and Maharashtra may reach grid parity for C&I customers by 2013-2017 and for residential customers by 2018-2020, assuming moderate economic growth and electricity price increases. Faster economic growth and lower financing costs could enable broader grid parity across more states by 2020.

1. Grid Parity of PV Power in India
Grid connected residential & industrial
Indo-German Energy Symposium– 28 April 2010, New Delhi

2. Agenda
1. Understanding Grid prices of India
2. Defining the 2020 market
3. Grid parity analysis
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3. The first challenge to a grid parity discussion in India is the
invisible cost of the the prices: subsidies in the value chain
The invisible cost ofgrid grid prices in India is significant
3

4. The second challenge is that data for solar radiation varies
significantly and this uncertainty gets reflected in LCOE
4 GHI Data for Bikaner, Rajasthan

5. Residential and C&I represent 75% of the market, and the
following discussion is based on these two segments only
18%
7%
21%
Industrial
Commercial
Domestic
Agriculture
Others
8%
46%
Total 577959 GwH p.a
5 Source: CEA, General Review 2009 as of 2007

6. The administered grid prices in the residential sector in India vary
widely from states to states
2010
2150 LCOE @2100 kWh/m²y
~ 19.8 INR/kWh
Gujarat
2100 Punjab
annual irradiation on module
Haryana
Rajasthan Madhya Pradesh
2050
[kWh/(m²y)]
Chhattisgarh
Maharashtra
2000 Andhra Pradesh
Karnataka
Tamil Nadu
1950
1900
Orissa
1850
0,0 2,0 4,0 6,0 8,0 10,0 12,0 14,0
average price of electricity [INR/kWh]
Bubble size according to specific market size
Fixed tilted mounting structure
Total annual irradiation at optimal tilt angle
6 Source: CEA, updated 31.03.2009, : NASA SSE 6.0

7. The administered grid prices for C&I Sector in general are higher
but vary less from states to states
2010 LCOE @2100 kWh/m²y
2150 ~ 17.8 INR/kWh
Gujarat
2100
annual irradiation on module
Punjab Haryana
Madhya Pradesh Rajasthan
2050
[kWh/(m²y)]
Chhattisgarh Maharashtra
2000 Andhra Pradesh
Karnataka
1950 Tamil Nadu
1900 Orissa
1850
0,0 2,0 4,0 6,0 8,0 10,0 12,0 14,0
average price of electricity [INR/kWh]
Bubble size according to specific market size
Fixed tilted mounting structure
Total annual irradiation at optimal tilt angle
7 Source: CEA, updated 31.03.2009, : NASA SSE 6.0

8. However, the energy exchanges allow us to follow market forces
in India, and prices ranging from INR 6-8/Kwh are discovered
N2 S2
E2 W2
8 Prices in INR/MWH. Source: www.iexindia.com

9. Agenda
1. Understanding Grid prices of India
2. Defining the 2020 market
3. Grid parity analysis
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10. Defining the 2020 market:
Vision 2020 is not a 20:20 vision!
“Currently, the break-even cost of PV in the United States varies by
more than a factor of 10 despite a much smaller variation in solar
resource.
Overall, the key drivers of the break-even cost of PV are non-technical
factors, including the cost of electricity, the rate structure, and the
availability of system financing, as opposed to technical parameters
such as solar resource or orientation.”
Source: Break-Even Cost for Residential Photovoltaics in the United States:
NREL, December 2009
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11. The vision of 2020, depends on the growth path India takes from
2010 and there are two realistic growth paths
Evolution
Power demand grows at a moderate 4% p.a
Raw material constraints not reached, Private sector participation at every stage of the
value chain remains limited
Tariffs grow at an average of 4% p.a
Interest rates for debt is maintained at 12-13% per CERC norms
Revolution
Power demand grows at 7% p.a
Increased private sector participation in generation, transmission and distribution takes
place, and supply constraint for raw materials for power generation is seen
Tariffs move towards at least an inflation adjusted mechanism (6% per year)
Project finance interest rates are lowered to 7%, facilitated by government & multilateral
agencies
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12. Agenda
1. Defining the 2010 market: Challenges
2. Defining the 2020 market: Assumptions
3. Grid parity analysis
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13. Residential Sector grid parity under Evolution, is first reached by MH &
GJ in 2018, and by 2020, major states reach grid parity zones
Evolution
2020
2150
Gujarat
2100 Punjab
annual irradiation on module
Haryana
Rajasthan Madhya Pradesh
2050
[kWh/(m²y)]
Chhattisgarh
Maharashtra
2000 Andhra Pradesh
Karnataka
Tamil Nadu
1950
1900
Orissa
1850
0,0 2,0 4,0 6,0 8,0 10,0 12,0 14,0
average price of electricity [INR/kWh]
LCOE range residential Bubble size according to specific market size
(Levelized cost of electricity)
13 Source: CERC, Photon International, NASA data, Q-Cells Research

14. Residential Sector grid parity under Revolution is first reached by MH,
GJ in 2015; by 2020, significantly more states cross grid parity
Revolution
2020
2150
Gujarat
2100 Punjab
annual irradiation on module
Haryana
Rajasthan Madhya Pradesh
2050
[kWh/(m²y)]
Chhattisgarh
Maharashtra
2000 Andhra Pradesh
Karnataka
Tamil Nadu
1950
1900
Orissa
1850
0,0 2,0 4,0 6,0 8,0 10,0 12,0 14,0
average price of electricity [INR/kWh]
LCOE range residential Bubble size according to specific market size
(Levelized cost of electricity)
14 Source: CERC, Photon International, NASA data, Q-Cells Research

15. C&I sector grid parity under Evolution, is first reached by MH,GJ,
KAR in 2017, and by 2020 some states cross grid parity zones
Evolution
2020
2150
Gujarat
2100
annual irradiation on module
Punjab Haryana
Madhya Pradesh Rajasthan
2050
[kWh/(m²y)]
Chhattisgarh Maharashtra
2000 Andhra Pradesh
Karnataka
1950 Tamil Nadu
1900 Orissa
1850
0,0 2,0 4,0 6,0 8,0 10,0 12,0 14,0
average price of electricity [INR/kWh]
LCOE range residential Bubble size according to specific market size
(Levelized cost of electricity)
15 Source: CERC, Photon International, NASA data, Q-Cells Research

16. C&I sector grid parity under Revolution is first reached by MH, GJ in
2013; by 2020, many significant states cross grid parity zones
Revolution
2020
2150
Gujarat
2100
annual irradiation on module
Punjab Haryana
Madhya Pradesh Rajasthan
2050
[kWh/(m²y)]
Chhattisgarh Maharashtra
2000 Andhra Pradesh
Karnataka
1950 Tamil Nadu
1900 Orissa
1850
0,0 2,0 4,0 6,0 8,0 10,0 12,0 14,0
average price of electricity [INR/kWh]
LCOE range residential Bubble size according to specific market size
(Levelized cost of electricity)
16 Source: CERC, Photon International, NASA data, Q-Cells Research

17. Conclusion
Grid Parity of PV power in India
Grid Parity in India is reached first for the C&I segment (sometime in phase 2 of
NSM) followed by the Residential sector (around phase 3 of NSM)
By 2020, LCOE of PV power is likely to be lower than thermal based grid power in
residential and C&I segments of market
States likely to reach first grid parity are Gujarat and Maharashtra, mainly due to
high grid prices and solar radiation availability
Financing methods and grid price escalation rates will determine the exact time
frames when grid parity will be reached
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18. Please contact us at:
Manasij Kar Q-Cells SE
m.kar@q-cells.com OT Thalheim
Sonnenallee 17 - 21
06766 Bitterfeld-Wolfen/ Germany
FAX +49 (0)3494 6699 10000
WEB www.q-cells.com
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