Who is investing in solar power in India? Take a look!
India has considerable ambition when it comes to solar power. It aims to increase its solar installations from below 5GW now to 175GW by 2022, or more than double the present solar capacity of the world’s two biggest solar nations - China and Germany. These ambitions have not gone unnoticed by investors.
A recent report by the U.S.-based Institute for Energy Economics and Financial Analysis (IEEFA) outlines the global capacity that is rapidly building as new global entrants bring international capital, technology and management expertise to accelerate the deployment of renewable energy to India.
It says that investments worth more than US$100 billion over the past eight months are driving an unprecedented shift to renewable energy in India.
The report—India’s Electricity Sector Transformation—charts the accelerating influx of global capital into India.
“In India’s so-called ‘seven horses of energy’ electricity sector transformation, renewable energy is ahead of the pack and rapidly gathering pace,” said Tim Buckley, director of energy finance studies at IEEFA and the lead author of the report.
“In early 2015, global financial markets were skeptical about whether good intentions and big promises could be turned into concrete actions. But today the figures speak for themselves, with well over US$100 billion of firm commitments signed and sealed. This includes deals with state-owned enterprises, leading Indian power companies, a number of Indian billionaires new to the power sector and leading global renewable-energy firms and global utilities” he said.
In 2015, significant moves have included four of the world’s largest solar manufacturers – Trina Solar (NYSE:TSLA), JA Solar (NASDAQ:JASO), Hanhwa, Q CELLS, (OTCMKTS:QCLSF) and Longi – advancing their plans to build Indian solar manufacturing capacity.
Three of the world’s top renewable energy utilities – EDF Energies Nouvelles, ENEL (BIT:ENEL), Green Power and ENGIE - have acquired top Indian renewable project-development firms. Not only are leading Asian innovators and utilities targeting Indian renewables, several of India’s wealthiest companies have entered the power market to invest in renewable energy, says the report.
Four renown solar-development companies in North America – Sky Power of Canada, First Solar (NASDAQ:FSLR), SunEdison (NYSE:SUNE) and SunPower (NASDAQ:SPWR) – are accelerating project development in India.
Global development banks and leading equity investors are also providing innovative green finance. They include the International Finance Corp, the World Bank, KfW of Germany, Asia Development Bank, Abu Dhabi Investment Authority, GE (NYSE:GE), Goldman Sachs (NYSE:GS) and Actis Capital.
The report, published in November 2015, records more than a dozen major deals in India’s renewable-energy sector in the previous month alone. They included Sany Group (SHA:600031) of China, announcing plans to invest US$3 billion by 2020 and Chint Group of China announcing plans to invest US$2 billion by 2020.
October 2015 also saw a new SoftBank/Foxconn/Bharti joint venture signing its first US$2 billion memorandum of understanding in the Indian state of Andhra Pradesh for 3GW of renewables. At the same time, the German government pledged €1.5 billion (US$1.6 billion) over five years to support India’s solar energy expansion through a German-Indian solar partnership.
The November 2015 SunEdison solar auction win of 500MW at Rs4.63/kWh (US 7.1 cents) set a record low solar price, 10 percent lower than the previous record low a few weeks earlier, Mr. Buckley said.
“Smart money is backing renewable energy. India is executing one of the most radical energy sector transformations ever undertaken, and this year has shown that the flow of finance is matching the ambition,” said Mr. Buckley.
Source: Institute for Energy Economics and Financial Analysis
Note: The Institute for Energy Economics and Financial Analysis (IEEFA) conducts research and analyses on financial and economic issues related to energy and the environment. The Institute’s mission is to accelerate the transition to a diverse, sustainable and profitable energy economy and to reduce dependence on coal and other non-renewable energy resources.
Dina Medland is an independent writer, editor and commentator with a strong focus on issues around corporate governance, ethics, the workings of the boardroom and sustainable business. She is on the team of contributors to @ForbesEurope and is an ex-Financial Times staff member who has been a regular contributor in recent years. Further details about her background and a portfolio of work – including her commercially sponsored blog ‘Board Talk’ are available on her website http://www.dinamedland.com