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ANKUR GUPTA HEAD, MARKETING AND COMMUNICATIONS KEN RESEARCH Continuous government support and advent of micro solar inverter to foster future growth The market for solar inverter has been growing at healthy rate over the years at an annualized rate of 61.9% during FY’2011-FY’2015 last five years, due to rising demand for power and the country’s inability to meet this rising demand. Market Evolution and Current Size The Indian power sector achieved radical changes in the past decade. The policy landscape in India progressively evolved since independence. The private sector involvement, policy changes, competition and focus on green energy evolved specially with the passing of Electricity Act 2003. The mounting pressures on the government resources to support the added capacities, the repeated project delays encountered by the state utilities and the surging demand-supply gap urged the government to open the energy sector to the private players in the market. Power cuts or unavailability of power supply is a very common problem in all areas of the country and the best solution is promoting solar and renewable energy. Consumers are expecting their inverters to work for long hours and to carry the entire load in their households, factories and shops. The solar inverter market in India has witnessed a growth in recent years on account of rising demand fueled by the demand and supply gap in electric power supply, expansion of industries and rising income levels of consumers. There are two business models prevailing in the rooftop market for solar inverter in India. First model includes installing the solar PV and inverter at own cost and in the second business model a third party owns, develops, operates and maintains the rooftop solar PV array and inverters i.e. “third party financing”. With the looming power crisis in India, the National Bank for Agriculture and Rural Development (NABARD) came forth for alternative solutions in the state of Andhra Pradesh. To promote solar and help people battle the crisis, NABARD is providing 30.0% subsidy for purchasing solar inverters. Though the solar rooftop segment in India is relatively nascent, it is developing fast, and has a strong growth potential. With rising electricity bills, the power shortage and the ‘go green’ trend, the solar inverter market is gaining greater acceptance at residential level in India. The market for residential solar rooftop inverters is highly fragmented as it has seen entry of large number of player during the last five years. The market for solar inverter has been growing at healthy rate over the years at an annualized rate of 61.9% during FY’2011-FY’2015 last five years, due to rising demand for power and the country’s inability to meet the rising demand. Additionally, the inclination in revenues of the solar inverter market in India can also be attributed to rapid entry of new players such as SMA, Bonfiglioli and others in the market. The residential solar inverter market contributed 2-3%of the overall solar inverter market revenues. The lower contribution of the residential rooftop market has been because the customer base from the residential sector is limited to people who have independent houses. On the other hand, industrial/commercial solar inverters accounted for 30- 33% of the overall solar inverter market in FY’2015. The total installed capacity of the solar inverter inclined at a CAGR of 53.7% during FY’2011-FY’2015. The rising installed capacity has been majorly on account of various government support schemes such as Jawaharlal Nehru National Solar Mission (JNNSM) and many others during the period. Additionally, increase in installed capacity was due to growing awareness, increasing installation of solar inverters in government sector-especially in rural areas. Segment Analysis On the basis of end users, government segment captured dominating share of overall solar inverter market, accounting for 80.0% of market revenues followed by 20.0% being contributed by captive units during FY’2015. Additionally, the market for solar inverters is highly fragmented and includes various numbers of players operating from both public and private sector. The domination of private players in manufacturing of solar inverters has been mainly due to presence of large international players in the market such as ABB India Ltd, SMA, Bonfiglioli, and Schneider in industrial and heavy grid solar inverters. These large players are equipped with latest technology and have experience of manufacturing solar inverters in other countries such as China, US and others. Furthermore, the penetration of solar inverters in rural areas has mainly been facilitated by increasing electrification initiatives of the Government of India. In India solar inverter market, majority of the overall revenue has been derived from rural areas, whereas in case of residential rooftops, over 90% of overall residential solar inverter revenues have been generated from rural region The market for solar inverters in India has been segmented by industry structure on the basis of distribution channel into organized and unorganized players. The SOLAR POWER 28 energética INDIA · MAR | APR16


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