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THE PRESENT INDIAN SOLAR MANUFACTURING SCENERIO LANCO SOLAR MANUFACTURING STRATEGY

AGENDA. THE PRESENT INDIAN SOLAR MANUFACTURING SCENERIO. THE PRESENT INDIAN SOLAR MANUFACTURING SCENERIO LANCO SOLAR MANUFACTURING STRATEGY. Growth rate at CAGR >45% during last decade; expected to continue during the next decade or so;

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THE PRESENT INDIAN SOLAR MANUFACTURING SCENERIO LANCO SOLAR MANUFACTURING STRATEGY

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  1. AGENDA • THE PRESENT INDIAN SOLAR MANUFACTURING SCENERIO • THE PRESENT INDIAN SOLAR MANUFACTURING SCENERIO • LANCO SOLAR MANUFACTURING STRATEGY

  2. Growth rate at CAGR >45% during last decade; expected to continue during the next decade or so; • Achievement of grid parity is a critical to the success of solar industry. • To achieve grid parity it is important to bring down the costs of PV Value Chain - Polysilicon, Wafers; PV cells and PV Modules or Thin films

  3. Lanco Solar Strategy Upstream Mid Stream Down Stream Polysilicon Ingot/ Wafer Cells Modules System Integration Decentralised Application Sand Indian PV Manufacturing is only limited to Cells & Modules !! Capacity utilization in these two segments is below 25% during 2011 !!

  4. INDIAN SOLAR MANUFACTURING – THE NEED • Securing materials for Solar & Semi-Conductor / Electronics Industry. • Energy security concerns will be addressed with Solar PV, to some extent, in the light of increasing conventional fuel prices & concerns on availability. • Forex outgo projected $2-3 bn/yr for solar during 12th Five year Plan (FICCI report). • Need to reverse this trend and save precious Foreign Exchange • Indian solar industry to get benefited by lower prices, due to domestic manufacturing mandate. • Creation of employment opportunities in Hitech Industry & at the same time in rural / remote areas also. With fiscal benefits like SIPS; SEZ & NCEF etc, the Indian Solar manufacturing should be on a high growth path.

  5. EVOLUTION OF STRONG MANFACTURING ECO SYSTEM – NEEDS…. • Suitable policy frame work to support Domestic Manufacturing • Access to capital - Economies of Scale; Technology Upgradation • Financial Costs – High interest rates • Utility (Electricity & Fuel) costs – 200 to 300% higher costs • Development of Eco-system – Low cost manufacturing

  6. • “US Domestic Content” Provision: American Recovery & Reinvestment Act of 2009 includes significant incentives which are applicable only if goods used in the project are produced in the US (ARRA Act USA) • “China Domestic Content” Provision: “China from 2004 to 2010 had a “70% local content” requirement for wind. Now that their wind turbine makers are making major inroads into foreign markets, they revised the law in Jan 2010. (Greendworld Investor 9th Jan 2012) • “Italy Domestic Content” Provision: Feed in premiums of 10% are provided to solar plants whose cost of construction, excluding labor cost, comprises 60% or more by components made in EU (Mcdermott Will & Emery) • “South Africa Domestic Content” Provision: Allocating more points for selection criteria for projects using domestic equipment • “Canadian Domestic Content” Provision (Cansia Canada solar association) • Brazil; France; Turkey; Greece; Ukrain; Malaysia – are some other examples Policy Support - Enforcing domestic content legislation & tariff barriers • INDIA : Domestic content was mandated in the Phase-1 (JNNSM) for c-Si only. This resulted in a loop-hole, which was massively exploited, skewing the ratio of TF (100% imported) to c-Si in India ……. resulting in shutdown of Indian Solar Manufacturing facilities

  7. ACCESS TO CAPITAL - ECONOMIES OF SCALE

  8. ACCESS TO CAPITAL Maximum borrowing amount offered by the Chinese state-owned banks to solar companies is around $40bn………India during the same period < $1bn

  9. Interest cost: Average interest rates in other countries are close to 2% to 4% vs. 12% to 14% in India. • Recommendation : (i) Access to off shore debt; (ii) allocation from National Clean Energy Fund can be used to offset this disadvantage. • Manufacturing process efficiency performance: India ranks at par • Scale advantage: Indian manufacturing ready to commit scale expansion if provided a level playing field Given a level playing field, Indian Solar Manufacturing is Globally competitive Indian manufacturing is capable of and committed to global competitiveness

  10. UTILITIES – PREFERENTIAL TARIFFS * Average billing rate • At an ABR of Rs 5.80 per kWh, production costs would shoot up to $ 40/kg, as against a global average of $24/kg i.e. an upside of over 40%. • Hence, Solar PV industry would be at a huge competitive disadvantage.

  11. POLYSILICON – MANUFACTURING COST PIE High interest & High Power costs are the prime reasons for the non-competitiveness of Indian Solar Manufacturing Sector

  12. BUILDING BLOCKS FOR PV : EQUIPMENT • Most of the capital equipment and consumables are imported at this juncture

  13. BUILDING BLOCKS FOR PV : CONSUMABLES SME sector – the major beneficiary of the eco-system development VC funding / Govt support shall be extended to SME sector for this growth Module capacity having reached >1.5 GW; the eco-system started growing.

  14. COST BREAKUP ALONG PV VALUE CHAIN (US$/WP) Source: Gao Hua Securities Research estimates,2011

  15. AGENDA • THE PRESENT INDIAN SOLAR MANUFACTURING SCENERIO • LANCO SOLAR MANUFACTURING STRATEGY • LANCO SOLAR MANUFACTURING STRATEGY

  16. LANCO SOLAR STRATEGY – SAND TO POWER Upstream Mid Stream Down Stream Sand Expected commissioning by end 2012-13 Commissioned June’11 • Integrated Solar Manufacturing in a 250 acre SEZ facility • First such commercial scale plant in India • Setting up 1800 MT/yr Polysilicon & 100 MW/yr Ingot/Waferingplant • Total investment of $ 500 mn (Rs 2500 Cr) in two phases • 75 MW capacity Module plant • Utilize modules in the in-house projects & for external sales To be recognized as a global leader in the solar industry, providing sustainable, innovative and cost effective energy solutions.

  17. LOCATION OF LANCO SOLAR MFG UNIT

  18. Control Building Laboratory

  19. Pipe Racks & Utilities – Under construction

  20. ELECTRICAL SUBSTATION – near completion

  21. HIGH PURITY REQUIREMENTS (Polysilicon Mfg)

  22. Laminators & Stringer

  23. ISO 9000 / 14000 / 18000 certified • IEC Certification by TUV; UL & Intertek laboratories • In-house Reliability Testing facilities • Local manpower – trained to meet Global standards

  24. SUMMARY • Indian Solar Industry is growing…..Solar Manufacturing shall also grow at similar pace for various benefits to the country; • Mandating Domestic content through policy framework; Level playing field in fiscal & infrastructure costs; • Development of Solar Eco System, in the entire PV Value chain, will soon become a big growth opportunity……

  25. THANKING YOU & WISH YOU ALL A BRIGHT & SUNNY FUTURE

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