Great union budget 2010-11, but very little (or nothing) for semicon!

The Union Finance minister has tabled the Union Budget 2011-12 this morning in the Indian Parliament. Some of the key features include:

* Hike in exemption IT limit from Rs 1.6 lakh to Rs 1.8 lakh.
* Air travel expensive — service tax increased.
* TV, mobile phones cheaper.
* Battery-operated hybrid vehicles cheaper.
* Plan to provide rural broadband connectivity to all 250,000 panchayats in the country in three years.
* Connectivity to all 1,500 institutions of higher learning and research through optical fiber backbone to be provided by March, 2012.
* Special grant provided to various universities and academic institutions to recognise excellence.
* From 1st October, 2011 10 lakh Aadhaar numbers will be generated per day under the UID program.

IT infrastructure
* Various IT initiatives taken for efficient tax administration. These include  e-filing and e-payment of taxes, adoption of ‘Sevottam’ concept by CBEC and CBDT, web based facility for tax payers to track the resolution of refunds and credit for pre-paid taxes and augmentation of processing capacity.
*„ Under Mission mode projects, funds released to 31 projects received from States/UTs for computerisation of Commercial taxes. This will allow States to align with roll out of GST.
*„ Bill to amend the Indian Stamp Act proposed to be introduced shortly.
*„ A new scheme with an outlay of Rs. 300 crore to be launched to provide assistance to States to modernise their stamp and registration administration and roll out e-stamping in all the districts in the next three years.
*„ A new simplified form ‘Sugam’ to be introduced to reduce the compliance burden of small tax payers falling within presumptive taxation.
*„ Three more benches of Settlement Commission to be set up to fast track the disposal of cases.
* Steps initiated to reduce litigation and focus attention on high revenue cases

Environment
* Full exemption from basic Customs Duty  and a concessional rate of Central Excise Duty extended to batteries imported by manufacturers of electrical vehicles.
„* Concessional excise duty of 10 percent to vehicles based on fuel cell technology.
*„ Exemption granted  from basic custom duty and special CVD to critical parts/assemblies needed for hybrid vehicles.
*„ Reduction in excise Duty on kits used for conversion of fossil fuel vehicles into Hybrid vehicles.
*„ Excise duty on LEDs reduced to 5 percent and special CVD being fully exempted.
*„ Basic customs duty on solar lantern reduced from 10 percent to 5 percent.

Besides mobile phone and TV, several other components have been made cheaper. These include laser printers, solar lanterns, hybrid vehicles, LED lights, etc. Air travel, hotels and getting treated in big hospitals have become expensive owing to service tax.

There is also a proposal to launch a National Mission for hybrid and electric vehicles. That should be interesting!

As of now, there is nothing on the Indian semiconductor industry.

What's happening with Indian solar/PV industry?

I’ve just returned after attending the Renewtech India 2011 show in Mumbai, on behalf of Trafalgar Media. I am very pleased to report that there were two sessions that I was able to attend — one on “Financing of Renewable Energy Projects” and the other on “Solar Energy & Hybrids.” Besides, I made a new friend in Sarita, my associate at the show.

To read more, you’d need to go to the website titled Global Solar Technology! I will, meanwhile, attempt to put down some of my own thoughts here!

First, the show itself! I am told there were many more exhibitors in the previous edition than this year’s edition. Now, I don’t know whether that is correct, but one got the feeling that this show was small! Two, the sessions were really lively! At least, that’s what I thought! Three, there was a strong German presence at the show. Four, on a lighter note, Yingli came to the show with a large booth, but also ended up doing a raffle draw on day 2!  😉

As for the conference, there were ‘moderate’ attendances for both the  sessions mentioned above. ‘Moderate’, because I felt that the venue, or the room that showcased the conference, was too small! Now, I may be wrong in my assessment.

However, these odd things did not have any negative impact on the sessions themselves. All speakers went full  blast at their topics, as did the audience, which, for a change, asked several interesting questions.

What was my impression about the show? It so appears that the Indian solar PV industry is well on track to perform well. However, there are some reports that not all licensees have managed a start, post the granting of 37-odd licenses by the NVVN.  What’s being done to support or help the guys who have won the NVVN licenses?

Also, there seemed to be a lot of discussions focused on solar thermal, rather than on solar PV technology. Now, why is that so? Perhaps, Solar Thermal Federation of India (STFI) has a larger role to play here!

By the way, there was a Bangalore-based supplier of LEDs, which had quite a few visitors at its booth.

And now, I am looking forward to attending the ISA Vision Summit, to be held on Feb. 21st and 22nd. Let’s see if something good comes out of this edition. Not to worry, you’ll hear from me, right here! 😉

Quite a few challenges before Indian semicon industry!

Anyone, who has the slightest interest in the Indian semicon industry, will agree with my statement. As of now, there are multiple challenges facing the Indian semicon industry. That’s where the India Semiconductor Association’s (ISA) Vision Summit comes into play! It assumes much larger importance!

Right now, there are no fabs or foundries in India. There aren’t even too many fabless companies. Okay, let’s face it! There aren’t even that many locally bred LCD or OLED or PDP players. Are there?

Let’s refresh your memory once again! Back in September 2007, the Department of Information Technology, Ministry of Communication and IT, Government of India, came up with the Special Incentive Package Scheme (SIPS) to encourage investments for setting up semicon fabs, and other micro and nanotechnology manufacturing industries in India!

The “ecosystem units” were defined as units, other than a fab unit, for manufacture of semiconductors, displays including LCDs, OLEDs, PDPs, any other emerging displays; storage devices; solar cells; photovoltaics; other advanced micro and nanotechnology products; and assembly and test of all the above products.

What has since happened? There has been a spiralling growth of solar PV firms — that too, largely owing to the Indian government’s Jawaharlal Nehru National Solar Mission (JN-NSM)!  Now, that’s not semiconductors!! I know there will be some disagreements with several folks, and so be it!!!

Recently, the ISA organized a one-day workshop on the Karnataka Semicon Policy. There was a presentation, which proposed the following features for 2010-11:
* Semiconductor focused school and research lab in IIITB: Rs 650.00 lakhs.
* Augmenting orchid tech space in STPI to characterization lab: Rs 200.00 lakhs.
* Implementation of agreement with MATIMOP, Israel (Fund for Semiconductor Excellence): Rs 100.00 lakhs.
* Various subsidies/incentives/concessions under industrial policy 2009-19: Rs 50.00 lakhs.

Perhaps, Israel will help out India for the time being. However, the Indian industry needs to closely look at itself and start to stand up and be counted!

What's happening with Karnataka semicon policy?

What’s happening with the Indian semiconductor industry? Rather, what’s happening with the Karnataka semicon policy? I was rather surprised to receive an invite to an event held last Friday at Bangalore’s The Lalit Ashok Hotel.

First, I did not make it to the event! However, one finds that the India Semiconductor Association (ISA) has organized an event, along with the Government of Karnataka, and that too in early 2011!

Excuse me, what is the Government of Karnataka doing in 2011 with a policy, which it is itself responsible for placing late! Okay, even if it is doing something, or well, trying to do something, why not in 2010 itself, especially when the Karnataka semicon policy was announced!

Now, the focus of the policy is:
a) Retain its edge in design by attracting fresh investments and expansion by existing companies within the state.
b) Attract manufacturing related investments by focusing on three key activities.
I. Promote Karnataka as a semiconductor design hub.
II. Attract investments in high-tech semiconductor manufacturing.
III. Promote generation and use of green energy, specifically, solar energy.
IV. Focus on manpower development.

All of this is fine! It is very well known and quite clear to the Indian semiconductor industry as to what’s required to be done in Karnataka.

Unless, the government of Karnataka found out that there have been no takers for the state semicon policy so far!

It seems to be the latter case!

Top 15 producers of c-Si and thin film solar PV modules, and outlook 2011

Fig. 1: Top 15 global crystalline module producers. Source: iSuppli, USA.

I am extremely grateful to Stefan de Haan, senior analyst, Photovoltaics, iSuppli Corp., for sharing with me the top 15 global producers of c-Si and thin film solar photovoltaic (PV) modules, respectively during Q3 2010.

First, the top 15 global crystalline module producers (see Fig. 1) — who are the standout performers and why?

He said: “It is still the Chinese integrated suppliers, above all Trina and Yingli. They benefit from a highly competitive cost structure. However, this need not be the most successful business model in future. With increasing cell and module efficiencies, and an increasing need for full automization, European and Japanese companies may gain ground again.”

Now, on to the top 15 global thin film module producers (see Fig. 2)– who are the standout performers here!

Fig. 2: Top 15 global thin film module producers. Source: iSuppli, USA.

de Haan added: “Still, it is First Solar, the company with lowest production cost in the industry and the biggest module producer. CIGS is upcoming, in particular. Solar Frontier also has to be watched.”

Global PV installations to grow significantly in 2011
It is said that global PV installation will likely witness moderate growth in 2011, and that, concerns of oversupply remain. de Haan agrees only partly.

He said: “Global PV installations will again grow significantly in 2011 (2010: 16 GW and 2011:  22.2 GW). Oversupply will not be dramatic in 2011, but in 2012 and 2013.”

Further, if the pressure from decreasing solar cell price continues to increase, will solar cell makers be forced to reduce prices of wafers and poly-Si to reflect costs? According to Stefan de Haan, prices will drop across the entire solar value chain in 2011!

Solar PV likely showstopper at electronica India 2010 and productronica India 2010

Don’t be surprised that given the major strides undertaken by India in solar PV,  this industry and its pavilion could well turn out to be the showstopper or the lead attraction, besides LEDs and other electronic components, at the upcoming electronica India 2010 and productronica India 2010 – which will be held in the sprawling Bangalore International Exhibition Center on Sept. 7-10.

For those interested, since its debut in 2009, this show has been split into two sections – productronica India — devoted to production technologies, SMT and EMS/contract manufacturers, PCB, solar and PV, laser, etc., and electronica India – focused on components, semiconductors, assemblies, LEDs and materials.This year, there are going to be three added attractions or special exhibit areas, namely:

* Solar pavilion.
* LED pavilion.
* Laser pavilion.

Solar PV main attraction
A report on the ‘Solar PV Industry 2010: Contemporary Scenario and Emerging Trends’ released by the India Semiconductor Association (ISA) with the support of the Office of the Principal Scientific Advisor (PSA), lays out the strengths and challenges of the Indian solar PV market:

* Even though the industry operates at a smaller scale as compared to other solar PV producing nations, production in India is very cost effective as compared to global standards.

* With Government initiatives such as the SIPS scheme and JN-NSM in place to promote application of solar PV in domestic market, the Indian solar PV industry is likely to gain further edge over other solar PV producing nations.

* There is no manufacturing base in India for the basic raw material, that is, silicon wafers.

* Over the last five years, China has emerged as the largest producer of solar cells in the world. The country currently has about 2,500 MW of production capacity for solar PV as compared to India’s 400 MW.  Taiwan, with annual capacity of 800 MW, is also emerging as a major threat to the Indian industry.

* Price reduction is another major challenge for the industry as this would have greatly impact the future growth of the market.

The recently concluded Solarcon India 2010 threw up several interesting points as well. Industry observers agreed that the timely implementation of phase 1 of the historic Jawaharlal Nehru National Solar Mission (JN-NSM) is going to be critical for the success of this Mission.

The MNRE stressed on the need to develop an indigenous solar PV manufacturing capacity in solar, and build a service infrastructure. Strong emphasis is also being placed on R&D, and quite rightly. Notably, the Indian government is working toward tackling issues involved with project financing as well.

All the right steps and noises are currently being taken and made in the Indian solar PV industry. If these weren’t enough, the TÜV Rheinland recently opened South Asia’s largest PV testing lab in Bangalore!

This year, an exhibitor forum on PV and solar will also take place at the Solar PV pavilion during  electronica India 2010 and productronica India 2010.

TÜV Rheinland opens South Asia's largest PV testing lab in Bangalore

TÜV Rheinland has opened India’s first and South Asia’s largest photovoltaics (PV) testing lab in Bangalore, India.

Just last week, Deepak Gupta, secretary, MNRE, had mentioned during his valedictory address at Solarcon India 2010 that an international lab was due to start a facility in Bangalore, and here you go! But first, a bit on TÜV Rheinland.

TÜV Rheinland has the expertise of testing PV modules, having been in the solar business for over 30 years. It has a market share  over 70 percent, and has seven PV labs spread across Germany, China, Taiwan, the US, Japan (two labs), and now, India. Its testing focus is on safety, efficiency, quality and durability of solar systems.

According to the TÜV Rheinland official, the total global investment in solar PV reached a record $40 billion in 2009. The PV cells production capacity is likely to exceed 33GW in 2011. Most importantly, 78 percent of manufacturers will be located in Asia. Further, the installed capacity of global solar panels is likely to reach 33.4 thousand MW by 2015.

Business prospects in India

TÜV Rheinland is well focused on the Indian solar PV market.

TÜV Rheinland obviously has been closely following the Indian solar PV market. India boasts of over 250 clear sunny days in year. Also, India’s solar potential is estimated at 600 TW per year. The PV industry output between 2002 and 2007 was said to 335 MW, with an export rate of 75 percent.

Coming to well known Jawaharlal Nehru National Solar Mission (JN-NSM), the Indian solar PV industry is estimated to grow to 100 GW by 2030. Also, 5 percent of the total power plant area will be used for PV power plants. The Indian government is promoting roof top solar generation.

TÜV Rheinland’s test laboratory in Electronics City, Bangalore, is spread over an area of 20,000sqft., including 5,000sqft. outside exposure testing area. It has invested close to $3 million in setting up the lab, thereby indicating a very deep interest in developing the Indian solar PV industry.

This PV test lab in Bangalore also happens to be India’s first and South Asia’s largest such facility. It has some unique facilities such as five climatic chambers and two sun simulators. With the inauguration of this facility, the availability of local testing and certification will now plug a key gap for the Indian industry.

TÜV Rheinland is offering the following PV services in India – PV module testing, PV module certification, PV power plants, conventional power projects, welding and non-destructive testing, installations, material tests and third party inspections. For the statistical minded, 70 percent of PV modules go through one of the TUV Rheinland labs worldwide.

The group’s global management is well focused on the Indian market and this PV test lab is a reiteration of an ongoing, long-term commitment to India.

Friedrich Hecker, CEO, TÜV Rheinland AG, said: “With the ambitious Jawaharlal Nehru National Solar Mission being operationalized, India is poised to take a huge leap in solar/PV. Module manufacturing, a key component of the chain, is largely domestically manufactured and offers a great export potential as well.

“The setting up of the PV lab by us today in Bangalore not only addresses the lack of such a facility in India but actually enables Indian module manufacturers to eye markets beyond India. India has always been a key strategic market for the group and all our different business units and this marks another step forward in that commitment.”

Andreas Höfer, chief regional officer, TÜV Rheinland (India, Middle East and Africa), said, “With abundant sunshine and high quality of radiation levels combined with focus on both grid and off grid applications, there is every possibility that India will be the market to watch out for in the region. We see a lot of overseas players investing here and setting up facilities or licensing technology for local players to manufacture with. In that way, both our entry and the setting up of this lab is timed well.”

Enrico Rühle, MD, TÜV Rheinland India, added: ”The Indian PV lab will be tightly interlinked to the other six laboratories across the world and will employ over 200 experts across functions. The lab which has facilities unheard of in the region like climate chambers and sun simulators will reduce the time for testing for Indian manufacturers.”

TÜV Rheinland India is part of the TÜV Rheinland Group, a leading provider of technical services worldwide.

Pressing need to address solar project financing in India: D. Majumdar, IREDA

During a session on financing solar PV in India at Solarcon India 2010 in Hyderabad, Debashish Majumdar, chairman and managing director, Indian Renewable Energy Development Agency Ltd (IREDA), said that India is facing a major problem — that is, how do we get the financial community to seriously look at solar!

He touched upon the three schemes that Dr. Bharat Bhargava of the MNRE had spoken about earlier. These are — NVVN scheme — typically 5MW/100MW schemes, rooftop component, and off-grid component.

Majumdar said that each one of these schemes has to be looked at differently. Two things will be important — generation and tariff. Tariff is derisked. All are going to look at the prediction and the forecast of generation. You will need good data to forecast for your project.

Power purchase agreements (PPAs) are signed in terms of MW. A change in mindset is also required. There are areas we often neglect. For example, the quality of water at site can create a lot of distortion in forecast generation. Or, how do you decide one module is better than the other?

On the 100MW scheme on power projects, Majumdar added that the entire history of what the distribution center becomes at downtime will be important. On the off grid component, Majumdar said that today, it looks small. However, it has the largest significance. Its impact is tremendous.

“Solar financing is tough. However, we will try to make it easier and show the financial institutions that it is possible to de-risk projects. We will get the lending community to activate itself,” he added.

Earlier, Dr. Bharat Bhargava, director, solar PV, MNRE, mentioned that the JN-NSM offers opportunities to invest in grid power projects, off grid projects and manufacturing. He added that the enabling polciy and framework is in place. Aggressive R&D and local manufacturing are necessary to achieve grid parity. He also outlined the R&D strategy. It includes:

* Research at academic/research institures on materials and devices.
* Applied research on the existing processes and developing new technologies.
* Development of CoEs on different aspects of solar energy.
* International collaborations.

Dr. Bhargava also mentioned the HRD strategy. It includes:
* Develop specialized curriculum for teaching solar energy at B.Tech, M.Tech and IIT levels.
* Announce fellowship for education and research.
* Provide training in grid and off-grid power projects.
* International training via bilatera programs.
* Testing and training institute.

India has bright future in solar PV, other RE: Stan Meyers, SEMI

According to Stanley T. Myers, president and CEO, SEMI: “India has a bright future in solar PV and other renewable energies. India should also acquire and develop the best research.” Meyers was speaking during a media interaction at the Solarcon India 2010 in Hyderabad.

(L-R): Daniel D. Martin, executive VP, PV Group, SEMI, Stanley T. Myers, president and CEO, SEMI, and Sathya Prasad, president, SEMI India, at SOLARCON India 2010, Hyderabad.

He said: “The NSM is the change in India. You try to look for simplicity, see what’s going on, and speed. We hope that happens in India.”

Meyers added: “We see SEMI playing the role as a ‘connector’ in markets where technologies are emerging. Two things need to happen in emerging technologies as well as regions. One, there has to be a roadmap — clear and defined. Two, there has to be standards development. SEMI is already playing a key role in  the standards for PV manufacturing equipment and materials. It will extend that activity into India as well.

“Our experience in standards in semiconductors has shown that standards results in cost reduction and the net benefit of cost savings is passed on not only to the consumer, but this also allows the savings to be ploughed back into R&D by the industry.”

Phase 1 of NSM critical for success

Meyers said that phase I of the JN-NSM is extremely important for India as it is in now in the execution level. He added: “Significant accomplishments made in this phase may set the parameters of Phase II of the NSM. SEMI will work with the PV industry in India in the execution of NSM and will collaboratively work with the regional associations/industry members and other stakeholder to help achieve the goals of NSM.”EHS (Environment, Health and Safety) and industry standards are two aspects SEMI has always been focusing on. We look forward to the opportunity to do the same in India.”

Is there a case for polysilicon manufacturing in India?

Lanco Solar's Alok Nigam speaking at Solarcon India 2010 in Hyderabad.

Friends, is there a case for polysilicon manufacturing in India? Would like to hear from you!

This post is based on a discussion at Solarcon India 2010 on polysilicon manufacturing in India by Alok Nigam of Lanco Solar.

The case!
According to Nigam, there is considerable polysilicon market potential in India. The inevitable dependance on other Asian countries in the absence of any sort of domestic capacity will only worsen the balance of payments (BoP) situation.

Upstream integration will help derisk business. Even in the absence of policy (JN-NSM) support, the impact on system cost will be marginal.

Now, as per the current manufacturing trends, polysilicon production remains concentrated with the top six players holding 70-80 percent of market share and new, large players emerging in China.

Technology has also enabled cost improvements across value chains — such as increasing furnace/reactor size, use of diamond wire for slicing, efficiency gain in cells, economy of scale in modules, etc. More incremental capacity is said to be coming up in Asia, which includes players such as SunPower, MEMC, First Solar, etc.