Indian Solar-Thermal May Follow U.S. in Losing Ground, Enam Says

Solar-thermal technology, backed by General Electric Co. (GE) and Siemens AG (SIE), may concede ground in India like in the U.S. as companies opt for cheaper photovoltaic panels, according to a developer owned by the Enam Group.

Solar thermal, which uses sunlight to produce steam for conventional turbines, has lost the cost and scale advantages it used to have, said Vishal Kedia, director of Visual Percept Solar Projects Pvt., which completed one of India’s largest photovoltaic plants this month.

“In the short-run, it has lost out,” Kedia said in an interview in Mumbai this week. “India will mirror sentiment across the world.”

Solar manufacturers offering competing technologies are fighting for market share as European governments cut back on subsidies and prices tumble on excess capacity from China. In the U.S., developers have ditched solar-thermal for photovoltaic panels whose prices fell 51 percent last year, according to data compiled by Bloomberg. Photovoltaic panels directly convert sunlight into electricity.

Only two of 22 companies bid for solar-thermal projects in a December auction held in India’s Karnataka state. The remainder vied for photovoltaic capacity.

Retrofit Plants

Mumbai-based Visual Percept bid to build a solar-thermal plant in India’s first auction in December 2010. It was out- priced by seven competitors, including Reliance Power Ltd. (RPWR) and Lanco Infratech Ltd. (LANCI), which have ordered turbines from Siemens, GE and Areva for 470 megawatts of solar-thermal plants due to be completed by early 2013.

The technology has a better chance of being adopted in India to retrofit conventional power plants to reduce fuel consumption by running on solar when possible, Kedia said. India is potentially one of the largest markets for such hybrid solar power plants, according to Areva.

Visual Percept plans to bid for more photovoltaic plants in Rajasthan state, Kedia said. It finished its first, 25-megawatt photovoltaic project in Gujarat state using crystalline panels this month.

Enam Group, led by investment banker Vallabh Bhansali, set up Visual Percept to develop solar plants, drawn by a business that offers stable, long-term cash flows, Kedia said. It’s also considering developing wind farms, he said.

Enam’s investment arm doesn’t disclose the size or details of its holdings which are spread across companies in most industries, Kedia said. The group was an initial investor in an early backer of Infosys Ltd. (INFY), India’s second-largest software exporter. Enam’s investment banking business was bought by Axis Bank Ltd. in November 2010.

To contact the reporter on this story: Natalie Obiko Pearson in Mumbai at npearson7@bloomberg.net.

To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net.

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