“How to develop decartelized & Rooftop Solar”

1. Solar Market in India 2012 “How to develop decartelized & Rooftop Solar” Chandan Guha Mahindra Solar One August 29th, 2012

2. You have seen the headlines…India as the place to be BusinessWorld, 18th Aug, 2010 ADB, 3rd May, 2010 Money Control, 25th Sep, 2010 ET, 24th Sep, 2010 ET, 11th Aug, 2010 ET, 1st Oct, 2010 TOI, 27th Sep, 2010 ADB ADB aims to attract $6.75bn of solar investment in next three years VA Tech Wabag IPO (Water Treatment) subscribed 15.2 times: raising 475 Crore Goldman Sachs Goldman Sachs Picks 8% In XL Telecom (XL Energy) On FCCB Conversion Blackstone Blackstone invests Rs 1,350 cr in Moser Baer's energy biz (thermal, wind and solar) Money Control, 23rd Aug, 2010 BusinessWeek, 24th Aug, 2010 ET, 24thSep, 2010

3. Solar Environmental Scan • Favorable Central and State Policies and Allocations • Over 1727 MW Allocated (NSM + State); 1046 MW installed till June • Payment Security corpus of Rs. 486 Cr approved by Cabinet • Joint Secretary + Section 25 PSU dedicated to Solar • New NSM Phase 2, Rajasthan, Karnataka programs + RPO • Irrational Exuberance Slows…Serious National and International Players Engage • Serious Power Developers…Reliance, Lanco, Welspun • International Developers…SunEdison, Azure, Astonfield • Strong EPC Competition…Lanco, L&T, Moser Baer, Wipro…Scale • Domestic Technology Landscape Improving…but uphill task to compete Chinese suppliers are emerging as price leaders…supply chain maturing • Financing is Still Key Driver…and Interest Rate More Critical over the next Year • Project Finance likely only to credible brands • Most Indian banks lending + US Exim, OPIC, IFC • Evacuation continues to be a Worry, if not a bottleneck • GETCO – helping out but falling behind • Everywhere else, it has become completely a developer’s headache • Land is becoming bigger and bigger a pain • Can take anything upto a year • Solar Parks are becoming scarce and expensive 3

4. Solar Adoption… Favorable Government Policies Globally Solar Growth is Strong India Adoption is just taking off India w/FIT 24 GW Installed Base Gov’t Programs Providing Incentive • Longest Plant 20+ yrs • Scalable for On-Grid & Off-Grid • Guaranteed Feed-in-Tariff for 25 yrs • Continual Technology Cost Reduction

5. Drivers for Indian Solar Industry • Policy / PPA Customers Financing Execution Technology

6. The good news… Demand is clearly rising • Improving Market Drivers • Strong Gov’t commitment (RPO, FIT, subsidies) • Solar awareness is on a high…now we need credible projects • Attractiveness improving w/rising diesel fuel cost & climate change concerns • Prices coming down…but needs to be rational • Delivery Models are Evolving • Improving deployment capabilities in India from both local and international players. • Entrepreneurs are finding business models…but some entry barriers are needed • Off-grid solar solutions are also finding “paying” customers

7. Customers…Willingness to Pay • On-Grid Nodal Agencies • Ensuring Power Produced is Bought • Ensuring Power Bought is Paid • Transparency in payment • LAND becoming an issue • Evacuation infrastructure is an issue • Off-Grid Consumers • Tomorrow’s market…distributed IPP Model • Interesting models being seen • Distributed generation increasing • Solar City looks great in concept Can we repeat the Computer Revolution in Solar?

8. Main Question – How to sustain Rooftop Model • Solar Cities attracting the bankers • “Gandhinagar” pilot throws up opportunities • 80% Govt roofs, 20% private takes away risks • Generation Incentive attracts roof owners • Net Metering avoids the issue of offtake • Captive Rooftops for industry • Fits in both Off-Grid and RPO streams • Have the knowledge to handle large power • Newer business models to emerge • Lender’s confidence should increase with the results Can we get project financing for these projects?

9. Technology… what may make the difference? • Bank-ability at the Right Cost • Deployed systems and familiarity • Global scale critical to achieve cost competitiveness • Robust performance guarantees – tilt, N-S, E-W • Ability of implementation on all types of roofs • Innovative solutions for penetration, stress bearing, GCR • Micro-grid technologies with battery energy storage • Efficiency / Innovation • High CUF for the technology choices • Adjustment to Indian Roofs • Basics • Avoidance of theft and support of roof owners • Off-take with minimum theft and maximum billing

10. Can we mature fast enough in Technology Technology 1 2 3 4 How does industry boost R&D How to make Material Science part of ecosystem Continuous evaluation of emerging technologies For efficiency And GCR Drive cost Economics Continuously And quickly “True Potential” will entirely depend on how “technology” handles itself In the next one year – innovative solutions for Indian Roofs critical

11. Financing is key and will challenge technology • Regulatory and Off-taker Risk • Captive Power, Solar Cities and others • Credibility of Developer • Clear Operating Structure and Business Model • Debt at the right Cost • IREDA, IIFSL etc. can play a major role • Competency to Execute • Background in managing complex projects • Incentivizing the roof owners • Strong EPC/ O&M contract and guarantees • Access to bankable technology 11

12. Comes down to the first projects executed Project Management Robustness of Off-take Performance • Knowledge of Indian conditions • Roof availability • EPC Contracting • Metering flexibility • Security and surveillance • PPA • Metering – gross v/s net • Incentivizing roof owners • Allowance for right technology • Bankers’ confidence • Roof Survey & Analysis • Civil / Structural Design • Right technology choice • Power Output / Monitoring

13. Policy…Setting a level playing field • Credibility of a Long Term Program • Certainty of a credible YOY GBI • RPO Obligations enforced thro’ to the States • REC mechanism – another progressive step • Large Enough Program to Attract Serious Investors • Solar cities in smaller towns looks viable • Focus on Credible Projects • Adequate Filters & Penalties in Selection Criteria • Ensuring Project Developers Adhere to Milestones • Framework for Honoring Commitment - Escrows • Innovation & Manufacturing • R&D Incentives for Emerging Technology & Cost • “Indianization” of technology for Indian roofs • Economies thro’ Scale & Localization • Inclusive Framework for Towns and villages alike

14. “To get to the goalpost is not good enough” • Drive cost of Solar Energy to competitive levels • Bankable PPA or alternate models • Adequate performance measures • Making right technology credible and available • Give it some firm policy impetus to reach the GOAL of “TAKE-OFF” A Holistic fitment The only missing link today

15. About Us ‘Mahindra Solar’, is at the forefront of solar revolution in India. Backed with innovative and cost-effective solution for rooftops and captive power plants, we are empowering commercial organizations and telecom towers to reduce their cost through diesel savings. In 2011, we received the highest CRISIL-MNRE rating of SP1A for off-grid solar PV system integration. 15

16. Our Milestone Projects MAHINDRA WORLD CITY, CHENNAI ENERGY & NATURAL RESOURCES MMDC, NASIK Mahindra Confidential - Internal Use only

17. Our Milestone Projects MAHINDRA REVA CARPORT, BANGALORE ENERGY & NATURAL RESOURCES Mahindra Confidential - Internal Use only

18. Our Milestone Projects MAHINDRA REVA PETAL TYPE STRUCTURE, BANGALORE ENERGY & NATURAL RESOURCES Mahindra Confidential - Internal Use only

19. Our Milestone Projects NSPCL 130kW PROJECT, BHILAI JABIL SINGLE AXIS TRACKER, PUNE ENERGY & NATURAL RESOURCES Mahindra Confidential - Internal Use only

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