Top 5 predictions for Indian solar PV for rest of 2012

There is a good amount of confusion reigning in the Solar PV arena and this post is to help clear up the air. I cannot guarantee the veracity of this post as the predictions are based on past inputs and does not take into account government policy changes, recession, etc. –

1. Solar PV is heading for Off-grid applications especially commercial rooftops, due to accelerated depreciation and increasing power costs – Because Solar PPA per kWh will be at prices below Rs. 8 and of course due to too many organizations chasing non-existent PPA. The next wave will be those organizations who can spare space for onsite use and tail end local generation.

2. Solar EPC prices will average between 7-9 Crores per MWp depending on the quality of the material – In ome way, due to the Balance of System's cost bottoming out and commodity prices increase. Panel prices may decrease but efficiencies will increase which will nullify the decline in price.

3. Solar REC prices are bound to fall – Due to EPC costs averaging out to that of wind projects per MWp, with REC projects being unavailable and only by those wanting to avail of accelerated depreciation. Also due to the fact that most states will use their policies to cover for their deficits and many will not have the money to pay for such costly power anyway. Also discoms will setup their own plants since this will impact their bottom-line tremendously.

4. Solar power plant consolidations will begin in earnest by 2013 with Discoms reneging on PPAs due to legal issues – Those who have lucrative PPAs may hold on unless their EPCs have been unable to deliver the quality and management, which will be a headache for small PPA holders. Also Solar PPA prices 

5. Small Solar EPC players will exit the grid arena and either fold up or focus on off-grid PV and Thermal applications – Sadly there is a glut of Solar EPC providers which has resulted in a fragmented market impacting survivability of those without the deep pockets of an international parent. Margins are also wafer thin currently which is another deciding factor.

Hope this provides a guide to those who see the writing on the wall.

Editor's Note: Ritesh Pothan leads an advisory organization focused on renewable energy projects and also runs two of the largest renewable energy forums on linkedin.com dedicated to the Indian subcontinent.

You can reach him at ritesh@natgrp.net and the forums at Renewable Energy and Cleantech Forum - India as well as Solar Energy Professionals - India.