India is 4th most attractive Renewable Energy Investment Destination

Ernst & Young’s (E&Y)Renewable Energy Country Attractiveness Indices puts India as the 4th most attractive market for renewable energy investments; with China leading the list followed by the US and Germany. The Index rates national renewable energy markets, renewable energy infrastructures and their suitability to individual technologies. Though the indices take a generic view, special attention is given to the factor in the priorities of investors.

India, China and South Korea are projected to continue to lead on the back of technological and cost advantages. It’s also partly because developed countries are focusing on higher technological solutions, which are costlier. For example, Spain and Australia are focusing on concentrated solar power (CSP), France on integrated solar PV, and the US on thin-film solar.

As far as economics is concerned, PV is expected to achieve grid parity by 2012-2015 in US/UK, if retail electricity prices continue to rise as anticipated. CSP may take longer. Similarly, the UK and Italy may achieve grid parity in onshore wind in 2017 and Germany and Spain in 2025. Offshore parity would come later. E&Y sees smart grid as an emerging priority and biomass as a potential resource, depending on land availability, for both developed and developing countries.

India held on to its previous position with focus on wind and solar energy. The government’s solar initiatives stand out at a time when Germany & Spain have cut their solar PV tariffs , thereby increasing the regulatory risk for investors. Solar Power Generation projects in India work out an IRR of 17%-20% depending on the location, State policy and technology.

We look forward to working with Indian and foreign Financial Institutions, Renewable Energy companies looking at building a portfolio of renewable energy assets in India  and investors looking at IPO exists in 3-5 years from now.

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