Indian Solar Power

Incept Holdings Ltd (ISIN VGG618061086) confirms that the Company has acquired a 33% stake in Top Finders Services Pvt Ltd for installing existing solar technologies for government and major companies in India.This venture is consistent with the Company’s clean energy pillar.

Top Finders Pvt Ltd develops and installs solar pumps for remote Indian villages and solar panels (including diesel supply & management) for mobile phone tower installations (including 4G conversion) in India. The business of installation involves financing and installing the solar technologies with ultimate payment by the Government (under Ministry of New and Renewable Energy, Government of India directive 32/1/2013-14/PVSE(Part-I)) or major telecommunications clients after installation.

Incept will procure investment over 12 months by way of interest bearing loans after which the loans will be repaid and the business will be self-sustaining. These funds will finance each installation prior to ultimate payment by the Government or telecommunications client post-installation which would be a period of around 3 months on average after which the funds can be rolled into the next installation project.

In the future this footprint allows the research, development and introduction of new solar technologies.

As an example, Top Finders Pvt Ltd has completed or “works in progress” in the following solar pumps under the Government directive. Also their local partners have and are doing solar pumps installation in remote Western Command locations on behalf of Army & Air force:

  1. Tahsil:Begunia, RI: Baghamari
    Barpada,Narasinghpur, Sapeswarpur,,Kathkhuntia, Loknathpur, Baghmari, Kurang.
  2. Tahsil:Bolagarh, RI: Bolagarh
    Nilakanthpur, Harirajpur, Gopalpur, Bahutipatna, Gabadih Patna, Nayapatna, Chandrasekharpur
  3. Tahsil: Khurda, RI: Jankia
    Dhoulimuhan, Malipada, Lahanga,Godipada, Champajhar, Jaganathpur.
  4. Tahasil: Ranpur, RI: Rajsunakhala
    Chintamanipur,Balabhadrapur,Hatibari, Damodarpur,Kotagarh,Sindura
  5. Bikaner & Jodhpur Division
    Mahajan, Lunkaransar. Bhaton ki Dhani, Phitkanshi
The scope and potential of the business are summarised in the table below:

Tower Security, Maintenance and Fuel Top-up: 
The Telecommunications company has over 4000 Mobile towers in Odisha state of India alone. These towers are a costly piece of infrastructure and require 24 hour vigil. Top Finders has extensive experience in providing security in remote areas. Top Finders can provide security and monitoring of these remotely located Mobile towers.

In India power supply is not consistent. Some remote areas have very poor and antiquated power infrastructure. Plus as a rule, all towers have standby inverters as well as diesel Gensets. They are electronically configured to keep invertors to the full capacity as well as kick in if there is a major failure in power supply. However they need to always have the fuel topped up. The Top Finders security team can easily perform the double task. Top Finder needs to expand its infrastructure and have small diesel trucks given to the security team.

Tower solarisation:    
In India after railways, mobile phone towers are the biggest consumer of fuel. Their fuel bill is over 24 billion dollars per year. Hence it makes sense for them to install solar cells on the tower including for 4G extension. Although that will increase the battery use but their overall cost and carbon footprint will reduce substantially. Top Finders have BOT partners ready to invest in project (including EPC) on long term basis but have to be facilitated with necessary government approvals as well as doing the E&M for them.

Solar pumps:
India’s 62% population (nearly 750 million people!) still relying on farming to make their living. Electricity is in short supply and negligible infrastructure brings the case of solar pumps to the fore. Government of India wants to spend close to 10 billion dollars a year to providing solar pumps for the villagers. They have made budgetary provisions and delegated the power to local municipal bodies head to execute it (Ministry of New and Renewable Energy, Government of India directive 32/1/2013-14/PVSE(Part-I)). Top Finders is presently doing this in various districts of Odisha.

Financing Model:
These are critical infrastructure projects but provide relatively very low entry point. Revenue models are well established and the paymaster is largely the Government of India. The projects are futuristic and in line with India’s ambitious plan of fulfilling the Paris accord. India is committed to have 100 GW power by 2022. At present they have only 11 GW in place. Those states alone reiterate the huge market opportunity.

Capital requirement are not very large and deployment is staged and performance oriented. Capex exit is very short period, leaving an ongoing income stream. Henceforth the scope is absolutely enormous and worth investing in. The IRR (internal rate of return) for any financing for a project is estimated to be well above 50%.

Overview summary of the Projects:

PROJECTS  Tower security Tower Solarisation Solar pumps
Product Description  Security, Fuel Top-up & Maintenance vigil of the Telecom towers Installing Solar power Units in Mobile Phone Tower stations Installing Subsidised Solar pumps in Indian Villages
Potential Market Size 10,000 Towers 12,000 Towers 200,000 Pumps
State of India Odisha, Bihar, Jharkand Odisha, Bihar, Andhra Pradesh Pan India
Payment authority Indian Govt. Owned Telcos Govt. of India Government of India
Number of Unit to be installed per Annum by Top Finder & Associates Over 1,000  Approx. 200-300 P.Y 200 -400 Units P.Y.
Term of product Supply For the period of 5 years Next 3-10 years Next 5-10 years
Average Payment period Bi Monthly Cycle Job completion. Approx .2-4 Months Job completion. About 4 weeks
Method and process of payment Paid by Government owned telecom companies G.O.I. &Govt Telecom company direct transfer Paid by Village head. As nominee of Govt of India
Timing of funds &
Lead time for the returns from financing for expansion
Within 2-3 months
Returns from 3-5 months
Within  3-5 months
Returns from 3 months onwards
Within 2-3 months
Returns from 2 months after.

 

BACKGROUND

Solar Water Pump (http://www.tatapowersolar.com/Solar-Water-Pump)
A solar water pump has a mini power house at its heart and consists of a calibrated and matching solar array of modules – tuned with the equivalent power of pump for that particular application. The solar water pumping system is capable of running all types of electrical water pumps with applications varying from irrigation to household demands. Irrigation pumps such as submersible, surface or deep well can also be coupled with drip irrigation systems to enhance the returns from this configuration.

A typical solar water pumping system is known by the sum total of solar array size that is required to run the attached pump. A 1000 Wp solar water pump is capable of drawing and pumping approximately 40,000 litres of water per day from a source that is up to 10 meters deep. This is sufficient to irrigate about 2 acres of land with regular crops. A 1000 Wp solar water pump helps save up to Rs 45,000 when compared to equivalent use of a diesel-operated pump over a year.

1

Each solar array has a number of solar modules connected in parallel or series. Every solar PV panel generates current by converting solar radiation to electrical energy.

2

The electrical energy from the entire array is controlled, tuned and directed by the inbuilt controller in DC pumps or through the Variable Frequency Driver(VFD) and enables the connected pump (may be submersible or surface) to draw water and feed the delivery pipelines.

3

The water thus drawn from ponds, rivers, bore wells or other sources by a solar water pump is pumped to supply water as required. It can be stored in tanks from where it is later channelled to fields or the supply from the pump may be coupled with drip irrigation systems to provide optimised water to fields directly.

 

Solar Power for Mobile Phone Industry

Cell tower operators in India are increasingly looking to switch to renewable energy sources to reduce their costs and increase the reliability of their power supply. (https://cleantechnica.com/2015/09/01/indian-cell-tower-companies-eye-renewable-energy-cut-costs/)
One of the largest cell tower operators in India, Viom Networks, is reportedly working on reducing their consumption of diesel in an attempt to stop the use of diesel at 35% of its towers.
Indus Tower, the largest tower operator in India, plans to switch to natural cooling for its towers, which would reduce diesel and power used for air-conditioning. The company plans to convert half of its 111,000 towers from air-conditioning to natural cooling by the end of the year.

Several other companies are also believed to be working to reduce their diesel consumption by setting up small-scale renewable power systems at their tower sites. The Telecom Regulatory Authority of India (TRAI) had, in 2012, directed all cell tower companies to have 50% of their towers run on hybrid power in the rural areas and 30% in the urban areas.

Using diesel to power cell towers is not sustainable – environmentally as well as financially. Diesel prices in India are no longer regulated and change as per the international prices. While prices are down at the moment, they could increase in the future.

Power consumption of the telecom towers is only going to increase as Indian telecom operators look to enhance and adopt new technologies like 4G, and expand and strengthen network availability. According to various reports, telecom towers in India consume 11 billion kWh of electricity every year, which is expected to increase to 17 billion kWh by 2016. These towers are also responsible for greenhouse gas emissions equivalent to 11 million tonnes of carbon dioxide every year.

Indian Government Solar Policy

Prime Minister Narendra Modi has given his approval for increasing the national solar mission capacity from the current 22 gigawatt (GW) to 100 GW by 2022.
(http://www.downtoearth.org.in/news/modi-government-sets-revised-solar-mission-target-at-100-gw-50236)

In a bid to reduce the use of fossil fuels and increase the capacity of renewables, the Centre had announced the Jawaharlal Nehru National Solar Mission (JNNSM) in 2010 for developing 20-GW capacity solar grids and 2-GW capacity off-grid solar applications.

In a departure from earlier occasions, the official announcement followed the detailed plan of how the government plans to achieve the new target (upgrading to 100 GW), unlike earlier occasions when only targets were announced.

The 100 GW solar power capacity has been divided into rooftop solar electricity generation (40 GW) and large and medium-scale grid-connected solar projects (60 GW).

According to the Ministry of New and Renewable Energy (MNRE) officials, it is expected that the total investment for upgrading to 100 GW solar power capacity will cost around Rs 6,00,000 crore ($94 billion, 1 crore = 10 million INR).

A statement issued by the Cabinet read, “(The) Government of India is providing Rs 15,050 crore as capital subsidy to promote solar capacity addition in the country. This capital subsidy will be provided for rooftop solar projects in various cities and towns, for viability gap funding-based projects to be developed through the Solar Energy Corporation of India (SECI) and for decentralised generation through small solar projects.”

Large public-sector companies, independent power producers and state governments will have to contribute to achieve the ambitious target of 100 MW capacity addition.

The Centre also plans to leverage bilateral and international donors, including Green Climate Fund under the United Nations Framework Convention on Climate Change (UNFCCC), as 100 GW of solar power would replace coal-based power plants and reduce Co2 emissions.

Experts feel that ambitious targets are always a good way to promote development in any sector, given that the benefits of increasing solar power reach all. The positive sides of solar power are energy security, climate protection, reduction in pollution and health benefits. The 100-GW objective should provide a direction for developing domestic solar manufacturing in India as well.

But there is a glitch in the government’s policy. Unfortunately, the focus of the capacity addition is only for grid-connected projects and has less to do with providing power to 300 million people, who still do not have access to electricity in India.