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Moser Baer to invest $1.5 bn in solar power

February 11, 2008 (The Economic Times) – Betting big on power generation through solar energy, Moser Baer India is investing about $1.5 billion in increasing its thin-film photovoltaic capacity to 600 mega watt (MW) over the next two years from the existing project capacity of 40 MW.As part of the expansion plans, a Moser Baer wholly-owned subsidiary, PV Technologies India, has signed a memorandum of understanding (MoU) with a leading US-based equipment supplier to secure supply of critical equipment.

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“This is a step towards realising Moser Baer’s objective of emerging as a technology leader in the global photovoltaic business,” Moser Baer executive director Ratul Puri told ET.

The capacity expansion would make Moser Baer one of the leaders in the thin-film PV business globally. The global thin-film PV market is expected to grow to 2 giga watt (GW) by 2010 or about $5 billion, with Moser Baer targeting a 30% share of it. Global thin film capacity currently stands at around 250 MW.

Thin-film PV modules, which use a variety of light absorbing materials like cadmium telluride, are a cost-effective way of converting solar energy into power than the traditional method using crystalline or multi-crystalline silicon wafers.

Even though the efficiency of thin-film solar modules is 50-70% lower than silicon wafers, meaning it takes 50-70% more surface area to produce the same amount of power, the cost reduction can be as high as 50% through thin-film.

The proposed capacity expansion will take place at Moser Baer’s manufacturing facilities at Greater Noida and Chennai. Moser Baer Photo Voltaic (MBPVL), another arm of the company, is on track to increase the crystalline silicon capacity to 80 MW by the end of the current fiscal.

In fact, MBPVL had recently raised $100 million from a clutch of private equity investors, which had also set a minimum threshold valuation of the photovoltaic business at $1 billion. The $1.5-billion thin film expansion plan would be financed through a mix of debt and equity.

Thin-film technology is not deployed as much globally as silicon-based modules or crystalline silicon. Mr Puri says Moser Baer is betting on thin-film technology because of its greater suitability to warmer climes like that of India.

“Not only is thin-film growing much more rapidly than crystalline silicon, it is also ideal for India. Crystalline silicon tends to degrade with higher temperature,” he added.

According to research by BCC Research Analysis, the global PV market stood at $12.9 billion in 2007 and is projected to grow to $32.2 billion by 2012. Silicon technology, which accounted for about 89% of the market in 2007, will represent 79% percent of the market by then.

The research firm said thin films, which accounted for 10% of the PV market in 2007, will grow at a 45% rate through 2013, driven by improvements in efficiencies and the use of these materials on flexible substrates. Thin films will account for almost 19% percent of the global PV market by 2012.

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