Indian Renewable Energy Industry is Exploding. Is Your Company Here Yet?
The fast growing renewable energy sector in India presents lucrative business opportunities for foreign, international companies to enter the Indian renewable energy market. However, the complexity and the dynamic nature of the Indian market can pose a challenge for developing a successful entry strategy.
EAI has an in-depth understanding of the Indian renewable energy industry. This makes us the perfect partner for those keen on developing a tailor-made strategy to make an entry into this market.
Prominent global companies have already started exploring the Indian renewable energy market, either directly or through joint ventures. Prominent among them are:
- Abengoa
- eSolar
- GE
- Sharp
- Siemens
- SunTechnics (Conergy Group)
- Vestas
- IBC Solar
- Fidelis Energy
- Gamesa
- BP
- Applied Materials
- 3TIER
- Enercon
- Du Pont
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Indian Opportunity - A Combination of Abundant Resources and Strong Economic Growth
Natural Energy Resources
India is blessed with abundance of water in the form of rivers and oceans, sunlight, biomass and large tracts of land with suitable amounts of wind.
Wind power in India has made rapid strides, and India is today one of the top ranked countries for wind power generation. The development of wind power in India began in the 1990s, and has significantly increased in the last few years to reach an installed capacity of over 12 GW.
Solar water heaters have proved the most popular so far within solar energy, but in recent times, interest in solar PV has accelerated.
India is gifted with economically exploitable and feasible (large) hydro potential assessed to be about 100,000 MW. In addition, it is estimated that the country has over 15,000 MW of small and micro hydro potential. (Source: MNRE)
Indian geothermal power is another active renewable resources of energy in India that have the capacity to produce 10,600 MW of power. However, this sector is just beginning to get explored.
Realising the potential for energy from renewable sources, the government set up the Ministry of Non-conventional Energy Sources (MNES) way back in 1992 - now called MNRE. This ministry's activities are directly controlled by the Prime Minister. MNRE activities promote renewable energy technologies, an environment conducive to promote renewable energy technologies and renewable energy resource assessment.
Economy
The Indian economy is poised for strong growth, which may be seen from these pointers:
- India and China are leading the world's economic recovery
- India has had a high GDP growth rate last few years (over 8%) and this is expected to continue with a forecast 7.5% for 2009-10 (source: Reserve Bank of India)
- India and China together will constitute most of the incremental energy consumption by 2030. (about 80% of the total increase).
Highlights in the Indian Renewable Energy Market
A number of facts and factors make the Indian renewable energy market exciting for entrepreneurs and investors. Here are some highlights:
- India is the most developed renewable energy market in South Asia, with an annual turnover of about $500 million.
- India is the third most attractive country to invest in renewable energy, according to Ernst & Young.
- The demand-supply gap in power is currently at 8% and is one of the key drivers of renewable energy in the country.
- The utilization of renewable energy sources is still relatively low in India, thus presenting excellent business potential.
- The Indian Government expects the renewable energy sector to grow to $19 billion from 2008 to 2012, with renewables making up 20% of the 70,000 MW of total additional energy planned from 2008-2012.
- India has been attracting over $2.5 billion every year in capacity addition
- The Indian Government has received proposals worth $30 billion for solar PV power plants alone (as of Dec 2009)
- India is emerging as one of the largest potential sources of Certified Emission Reduction (CER).
National Solar Mission
The Launch of National Solar Mission has given a big impetus to solar energy in India. The highlights of this mission are:
- The Solar Mission will be implemented in 3 stages, leading to an installed capacity of 20,000 MW by the end of the 13th Five Year Plan in 2022
- One of the targets is to install 20 million square meter solar thermal collectors in the country by 2022 and save about 7,500 MW power generation capacity.
- 20 million solar lights are to be installed by 2022
Government incentives for renewable energy
In March 2007 the Indian Government announced a semiconductor policy under its Special Incentive Package Scheme (SIPS). According to this policy, the government or its agencies will provide 20 percent of the capital expenditure during the first 10 years for semiconductor industries, including manufacturing activities related to solar PV technology located in Special Economic Zones (SEZ), and 25 percent for industries not located in an SEZ.
Inspired by the semiconductor policy, the Andhra Pradesh state government has set up FabCity in the capital, Hyderabad, at an estimated cost of US$3.18 billion. Spread over 1,200 acres (486 hectares), FabCity will house semiconductor manufacturing companies working to meet the needs of the electronic hardware sector and fabrication units for solar PV.
FabCity is the largest investment ever made in India in the technology sector. It marks the first step towards India becoming a $33.6-billion semiconductor market employing some 3.6 million people by the year 2015, according to Frost & Sullivan.
Some of the other key strategic and operational incentives provided by the government of India (or intended to be provided soon) for the renewable energy industry are:
- 80 percent accelerated depreciation for renewable energy investments
- Relief in customs duty, excise duty and sales tax
- Soft loans
- Generation-based incentives for solar and wind power projects
- Government policies covering wheeling, banking, buy-back, and third-party sale of power
Foreign Direct Investment in Renewable Energy Sector
The government allows 100% foreign direct investment (FDI) in the renewable energy sector and has put in place conducive policies to attract foreign companies in the sector.
With all the above attractive characteristics and potential, India presents a significant market opportunity for renewable energy firms worldwide.
What's Needed to Exploit This Tremendous Opportunity?
In order for these opportunities to be effectively tapped, your company will need to come up with effective strategies and implementation plans.
For these strategies and plans, your business needs to obtain a better idea of the following:
- A clear understanding of the Indian renewable energy market structure and its dynamics - number of suppliers/competitors, government policies and incentives, key bottlenecks and barriers etc.
- Insights into the existing sales channels for the incumbent players in the market.
- Understanding the key levers for sales and marketing success in the industry
- Estimates of the possible sales targets by a new entrant that can be achieved in the next few years for the industry segment
- Estimates of investments required for a defined scope of operations.
- Government policies in the context Indian market entry by foreign firms
- A step-by-step roadmap of how to start off operations
EAI Can Help You Get There
EAI can help your company make a successful Indian market entry by offering the following:
EAI Consulting Framework
Business Intelligence
- Present conditions and future prospects of the renewable energy industry
- Insights and data on competition in specific segments
- Current distribution systems and sales channels
- Insights on key market drivers
- Competitor intelligence
- Government incentives and policies
- Legal policies guiding entry of companies into the Indian renewable energy market
Marketing and Sales Strategy
- Sales channel development strategy
- Exploring partnership opportunities and possibilities with existing channels
- Options available for market entry
Action-oriented Assistance
- Assisting your company in setting up operations in India
- Acquainting with the legal and procedural aspects guiding entry of companies into the Indian renewable energy market
- Coordinating interactions with local business contacts along the business value chain
- Assisting your company in planning and executing an implementation strategy
- Providing assistance for presentations to governments and external funding agencies
Focus Segments in Renewable Energy for EAI
The EAI team has the expertise to develop the entry strategy for a range of renewable energy sources. Our focus however is on the following:
Solar Energy
- Solar PV
- Solar Thermal / CSP
Wind Energy
Biofuels
- Biodiesel
- Ethanol
Our understanding of these three segments combined with the extensive business contacts we have along the entire value chain for each of the three segments, enables us to provide unique and significant value to those keen on entering the Indian market for renewable energy.
About EAI
Energy Alternatives India (EAI), part of Clixoo ( www.clixoo.com ), provides support services and solutions to the renewable energy industry in India. EAI has today emerged as a leading consulting and market strategy company for all the primary renewable energy sources - solar, wind, bio-fuels, hydro and waste to energy.
Know more about the EAI Team from here.
Our acquaintance with the diverse business entities in the Indian renewable energy industry, along with our deep understanding of the technology, industry dynamics and emerging trends in renewable energy sources in India and worldwide, make EAI the most effective partner for those keen on exploring this domain.
Our ability to provide such advice owes much to our sound business acumen and deep insight into the market dynamics and success levers in different renewable energy sectors, as well as our detailed knowledge of issues that affect businesses. Our professionals work individually or in small teams, providing a flexible service tailored to fit client's needs. This enables us to respond quickly to new initiatives and opportunities.
Through our work on diverse projects, we have gained in-depth knowledge on every aspect of the renewable energy value chain. This includes contacts with manufacturers and distributors of products, end users, system integrators, EPCs, support services providers and with external experts in specific areas.
Research Methodology
Design Methodology
EAI follows a collaborative design methodology for its consulting and research assignments. For data and intelligence gathering, EAI adopts both primary and secondary research methods.
Primary research
Prominent segments we interact with during the primary research include:
- Manufacturers of equipments, components and service providers
- End users
- System integrators
- Other industry experts / consultants
- Government bodies and associations
We use our existing network of contacts for the primary research stage.
Primary research methodologies include:
- Telephonic interviews
- Email interviews
- Face-to-face discussions
Secondary research
Secondary research is done by the experienced in-house research team at EAI.
Secondary research is done using the following sources:
- Publicly available sources
- Database available at EAI
- Paid databases and resources
Interested in Knowing More About Our Services?
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Contact Us
For more information, contact:
Narsi Santhanam
Mobile: +91-98413-48117
Email: info@clixoo.com