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RENEWABLE ENERGY branches of businesses can use solar power with greater benefits. Priority Six: Multimegawatt PV Solar Power Plants Subsidy regime needs to go: There is abundant evidence to show that subsidy for solar energy is encouraging corruption among officials and middlemen alike. This is true, both in the state as well as the central government. In fact, the current form of subsidy would hurt the cause of non-conventional energy in general and solar energy in particular. Poor quality installations are mushrooming everywhere. Ignorance of the buyers is being exploited by spurious suppliers. Is there any value to a 20 year performance guarantee by a supplier without any base? We would do well to scrap the Subsidy Regime in its present form. It is an evil that breeds corruption. We need to replace it with low interest finance through our banking network. The growth of PV solar industry is hurt primarily due to high capital cost. For healthy growth of this sector of social relevance, we should replace arbitrary cash subsidies with the interest subsidy to be given via nationalised banks for financing solar installations targeting power-deprived rural communities as well as solar installations in private homes, apartment complexes and commercial and industrial establishments. If we can finance Metro Projects with low cost foreign funds, why not finance PV Solar Micro Grids powering small towns and villages? If loan is made available at 4% interest, and if it is given directly to the buyers after being verified by the bank after the site inspection by a bank official, millions of homes would opt for it. The financial load that would be needed at the start for buying a system flat out, and if loans are made available at low interest rates through nationalised banks and monitored through a prescribed mandatory procedure, solar power would indeed become affordable to the masses. Leasing option in case of solar plants, as is done in the US, also hides the fact that the overall financial burden on the customer is actually heavier, while all the subsidies flow to the company making the deal. The achievement of lighting up ‘Dark India’ is indeed a challenge, but not an impossible one. The Photo Voltaic Solar technology can brighten the lives of these people. The government needs to work on a viable solution and prioritise investments in the right direction for providing them with basic amenities through solar power generation. This would have a positive impact on bringing this population into the mainstream. The time has come to erase the darkness from their lives and empower them with equal opportunities HARESH PATEL CHIEF EXECUTIVE OFFICER OF MERCATUS, INC. How Renewable Energy Companies Can Bounce Back from a Stock Market Beating US solar companies that have exploded with growth at the cost of profitability altogether have received a loud message from Wall-Street, “It’s the profitability stupid.” Over the last few months, some of the most prominent US solar companies have experienced a meltdown in their stock prices. In response, solar major SunEdison reset investor expectations by announcing substantial reductions in growth projections and articulated a strategic shift away from their YieldCo, TerraForm. While this costly investor sentiment appears to be a step back for the industry, strategic reforms that address operational efficiency could produce long-term benefits with massive dividends. Fighting for a structural cost advantage would be a giant leap forward that moves the industry toward sustained profitability. The pressure a YieldCo places on its parent company to rapidly grow pipeline can strain operations and the ability to scale in an efficient manner. The requirement of growing a massive pipeline and creating trust and transparency around the underlying value of the assets being fed into a YieldCo can pull corporate resources in opposing directions. Read More here Does this mean that YieldCo’s should be abandoned? Looking at the big picture, public markets are still a relatively untapped opportunity for financing the massive investment into advanced energy technologies that will occur in order to meet growing energy demand over the next 20 years. Seeking low-cost capital will be necessary over the long run. The issue is not with the underlying strategy that the YieldCo serves, it’s about creating execution strategies that can support the pressures associated with growth and transparency at the same time. The problem is not really with growth either. The hard costs associated with advanced energy technologies have been, and continue to be, dropping rapidly; opening new markets every day. The fundamentals of these technologies are extremely strong in many markets. The real issue is that a growthfocused sector has expanded at the expense of efficiency; as a consequence, companies are not improving profitability, which is clearly no longer acceptable to the capital markets. Growth, therefore, needs to be increasingly obtained through an internal focus on business processes that yield structural cost advantages over competitors, as opposed to seeking a cost advantage solely through innovative financing vehicles like YieldCo’s. Companies that can obtain a competitive advantage by running a tighter business with excellence in operational efficiency will be able to penetrate new markets and access low cost capital at the same time 52 energetica INDIA · NOV | DEC15


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