BOOT/OPEX/Pay As You Use Model for Rooftop Solar Projects Workshop on Getting Started on Energy Management & Solar

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1 BOOT/OPEX/Pay As You Use Model for Rooftop Solar Projects Workshop on Getting Started on Energy Management & Solar Photonergy Solutions Private Limited

2 Key Drivers Rooftop Solar-Business Case Rising Grid Tariffs Grid power rates 6-10% YoY Coal prices rise sharply as demand exceeds domestic supply and imports increase DG power costs INR 16-18/kWh (fixed cost excluded) Solar PV Technology Substantial reduction in module costs over the years leading to tariffs inclining towards grid parity Standardized, readily available technology Speed of implementation-within few months Enabling Regulatory Framework/Fiscal Incentives Accelerated Depreciation Feed in Tariffs Gross/Net Metering Regulations Priority sector lending status for lending to renewable energy (bank loan up to Rs. 15 crore for RE generation projects) Renewable Purchase Obligations (RPO), if any Ce tral Gover e t s a itious target to a hieve 40GW of RTS y 2022

3 Rooftop Solar-Busi ess Case Key Drivers Benefits to Consumers Captive energy source at your doorstep No fuel cost Long term reliable source of power (300+ sunny days in a year) For institutional/industrial/commercial consumers as cost is already close to/less than applicable grid tariffs Use idle rooftops/ground productively Modular Construction Ease of scaling up/physical relocation Minimum regulatory and permitting issues Substantial Environmental Benefits Environmental savings (100 kw solar plant) Replaces 15,625 barrels of crude Reduces CO2emission by 3,600 MT Equivalent to planting 12,500 trees

4 Rooftop Solar Solutions Pay As You Use Model/BOOT Model Key Features It works on Build-Own-Operate-Transfer Model PSPL makes the entire investment and owns the plant Electricity generated is sold to rooftop owner under a power purchase agreement for years Tariff is determined upfront for the life of PPA PSPL to be responsible for operation & maintenance of plant during PPA term Plant to be transferred to client at end of PPA term at no Cost Key Benefits No upfront capital investment Saving from day1 over current costs (grid & DG) Typical savings for 100KW system over 20 years~ Rs mill Long term tariff certainty Technology, investment, performance risk-all borne by PSPL-paid only for what it generates Investment free-risk free model

5 Rooftop Solar Solutio s Pay As You Use Model/BOOT Model Scope of Work of PSPL Capital investment Detailed design & engineering Procurement, civil construction Installation, testing & commissioning Operation & maintenance Possible Structures Rooftop Owner is the consumer of electricity and thus PPA is with Rooftop Owner Rooftop Owner provides rooftop area on lease (co-terminus with PPA term) and power generated is sold to third party

6 Rooftop Solar Solutio s Key Features of Power Purchase Agreement (PPA) Duration: Years A pre-agreed tariff for the entire duration: Possible Tariff Structures- -Fixed Tariff with zero escalation during the PPA term -First year Tariff plus fixed escalation during PPA term -Tariff linked to Grid Tariff -A combination of above Solar Plant is transferred to the client at the end of PPA at no cost Suitable provisions for -Future building expansion plans - Having option to buy plant/terminate PPA with suitable payment/termination payment at any time during the tenure -Payment security -Providing roof access rights for installation and operation of solar plant during tenure of PPA

7 Haryana-Net Metering Regulations 2014 HERC (Rooftop Solar Grid Interactive System based on Net Metering) Regulations, 2014 Regulations notified by HERC on Not to exceed connected load and contract demand in case of LT and HT customer respectively Max installed capacity not to exceed 1MWp for a single eligible consumer.. 5% variation allowed. Electricity generated to be capped at 90% of electricity consumption. Carry forward of excess generation allowed for one year. Targeted cumulative capacity of 400MW allowed In a particular area, cumulative RTS capacity not to exceed 15% of peak transformer capacity These Regulations shall not apply to a generator who generates power through rooftop solar system in more than one premises or over a water body, whether moving or static.

8 Haryana-Net Metering Regulations 2014 HERC (Rooftop Solar Grid Interactive System based on Net Metering) Regulations, 2014 In such cases if the power generated is 250 kw or above, the generator may enter into a power purchase agreement with the licensee serving that area or go for third party sale through open access. Such generated power to be injected at one single point into the system without any consumption in individual premises Purchase of such generated power shall entitle the licensee to RPO or to the generator for REC Cost of the additional equipment required for connectivity in such cases shall be borne by the generator. Licensee is obligated to buy such power up to ceiling of solar RPO and at rates limited to or lower than FiT FiT for for RTS is Rs. 7.19/unit. Solar RPO for is 0.75% If less than 250KW, the licensee may purchase the generated power through bilateral arrangement at the mutually agreed tariff For open access consumers, the facility of net metering shall not be available

9 Thank You Sanjay Agrawal Director Photonergy Solutions Private Limited Tel: