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08/23/2012 12:35 PM     print story email story  

First Solar Prioritizes India

SustainableBusiness.com News

In the wake of the world's biggest power outage in India, First Solar is looking to win at least 20% of India's solar PV sales.

"Our focus really is to create a new stream of demand in the market from industrial and commercial businesses," Sujoy Ghosh, head of First Solar's India operations, told Bloomberg. "That would require us to do a lot of the development" of projects, including building, arranging financing and supplying modules, he says.

First Solar believes its project strategy will help it counteract the cutthroat pricing of its Chinese competitors, as India seeks to deliver on its plan of producing at least 10% of its energy -- 20,000 megawatts (MW) -- from solar sources by 2022.

One of the first places that the conversion is happening is within India's 30-gigawatt (GW) backup power market, which is powered mainly by diesel generators. A number of factors, including the high price of diesel fuel and lower solar module prices, are making solar a much cheaper alternative for that backup market – which has become increasingly important given India's chronic power outages.

India currently has about 1,030 MW of solar capacity, almost all built in the past year with the support of government contracts and mechanisms such as the country's solar auction structure, in which the lowest bidder wins the right to supply electricity. By dealing directly with businesses, First Solar can help arrange lower pricing and it can also help the private sector better hedge its bets against future outages.

The country suffered its largest outages ever in July, when two massive grid failures left an estimated 640 million people in the dark. A combination of factors contributed to the outages, including drought conditions that have forced many farmers to run water pumps on overtime. 

The situation has put a spotlight on India's energy strategy, which is rife with contradictions.

On the one hand, India's solar market is forecast to grow from just 54 MW in 2010 to more than 9 GW by 2016.

On the other, at the same time that it supports that astounding growth, India is continuing to support new coal-fired power plant (although that growth is threatened by water shortages). Coal accounts for about 70% of all electricity, and it will account for 75% of new capacity in the coming years.

India's Budding Solar Industry

By working directly with businesses and not through the government, First Solar is also dodging a provision in India's National Solar Mission that specifically requires government-funded projects to use India-manufactured projects.

Its plans is likely to raise eyebrows at New Dehli's Center for Science and Environment, which just released a report critical of the impact that US solar companies are having on domestic solar companies. In particular, the center just release a report warning that a $30 billion solar fund being run by the US Export-Import Bank and Overseas Private Investment Corp. is putting local solar PV manufacturers out of business.

That's because the fund sidesteps the local content rule by loaning money to Indian solar project developers that are using US-made solar cells and panels to get around the local content rule, reports Renewable Energy World.

As a result, 30% of India's domestic solar faces closure because of low demand, according to the report.

For the complete Bloomberg article about First Solar:

Website: www.bloomberg.com/news/2012-08-23/first-solar-to-build-india-farms-as-outages-propel-sun-power.html



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