Building Competitive Green Industries

FIGURE 4.4. Capacity map for crystalline PV(global, China, India)Capacity volume (GW)45403530252015105041 40Ingots27 27.01 .01WafersCellsModuleslower returns, and had a DCR that covered all PVtechnologies rather than just crystalline.India lacks the same degree of institutionalintegration, has an unreliable electricity supply,has an R&D agenda that is more driven by thepublic sector than the private sector, and has aDCR that covers only crystalline technology (Sahooand Shrimaliy, 2013). For these reasons, the majorequipment stage of the PV value chain is notlikely to gain a significant competitive edge, and isconsidered to be an especially limited opportunityfor SMEs. However, there are particularly strongtechnology-specific innovation opportunities forsolar PV around customization of small systems,including roof-mounted ones and off-grid bespokeapplications for small power requirements. Froman R&D perspective, there is innovation potentialfor solar PV cells and modules to be calibrated toIndia’s latitude rather than the irradiance spectrathat are more common in European markets. ForCSP, innovation is needed to accelerate the timebetween commissioning and operational readiness,since that has been a major stumbling point for theCSP commissioned under Phase I of the NationalSolar Mission. For solar thermal, innovation isneeded to improve integration with other energysources.402238231.7 1.7Global China IndiaSource: Sahoo and Shrimaliy, 2013.Innovative financing arrangements are needed toopen up the market to potential customers withlimited upfront capital. The Asian DevelopmentBank is experimenting with pay-as-you-goschemes in partnership with Simpa Networks,an SME that is helping energy-poor householdsaccess solar energy using a solar home systemand a low-cost prepaid meter connected to cloudbasedsoftware (ADB Knowledge Showcases,2013). Accessing low-cost finance is also importantfor larger-scale projects, especially in the highlycompetitive cost environment that is encouragedby the reverse-auction approach to feed-in tariffs.Innovation is also needed to improve the degreeof technical quality assurance, which would helpbuild trust in a technology’s claimed specificationsso that developers and financiers can reducetechnology risk and financing costs.Indian Clean Technology FirmSurvey ResultsA survey of 50 clean technology firms in Indiasuggests that a large majority of the firms areactive in renewable energy, including solar; 68percent of firms said they worked in renewableenergy, 40 percent are in energy efficiency, and18 percent worked in waste management andpurification (note that firms could select more thanone sector) (see Figure 4.5). These commercialactivities largely reflect the areas of greatestopportunity that were identified through the marketsizing study, and may reflect the fact that firmsare choosing to get involved in sectors that aregrowing.The survey also revealed that clean technologySMEs are already working in the value chainsegments with the most opportunities for SMEs(see Figure 4.6). Most firms said they worked inseveral different parts of the value chain, withover 70 percent of firms working in design and/orO&M, and over 60 percent working in one or moreof installation, manufacture and assembly, and/orR&D.The surveyed firms were also international, andsignificantly more international than non-cleantechnology firms in India (World Bank, 2006).Nevertheless, 70 percent of firms said that morethan three-quarters of their sales came fromdomestic customers. Forty-six percent of firms hadcustomers overseas, 43 percent of those firms hadcustomers in Africa and non-China Asia-Pacific,44 Building Competitive Green Industries: The Climate and Clean Technology Opportunity for Developing Countries