SINGAPORE An Indian carbon firm has launched a program to link up developers of costly small-scale solar power projects to help them earn U.N. carbon credits and boost investment returns.
Emergent Ventures India's program is part of a recently expanded form of a U.N. scheme, the Clean Development Mechanism, that aims to deploy clean-energy technology in a big way in poorer nations to cut greenhouse gas emissions.
"It's very new. We've got three projects so far and we've written to about 50 to 60 project developers," said Deepak Verma, chief operations officer and head of EVI's carbon finance and technology solutions.
The aim is to reward investors of small projects that would ordinarily miss out on carbon credit revenues because of the CDM's high auditing costs and lengthy approval process.
EVI has already begun signing up developers of solar panel projects of size from 1 to 2 MegaWatts and hopes to grow that number to at least 50 in a program it believes is among the first of its type in India.
The projects are part of an Indian government scheme to dramatically ramp up solar power generation to 20 GigaWatts by 2021 from about 30 MW now.
The first phase includes a national scheme to support total investment of 100 MW in small solar panel installations of up to 2 MW, with most around 1 MW. Each gets favorable electricity rates as an incentive.
Each megawatt could power about 1,000 homes and a 1-MW ground-mounted solar panel system would cost around $3 million, Verma said in a telephone interview from Gurgaon outside New Delhi.
He said EVI would need between 30 and 40 projects under the small-scale solar program to break even and said each could earn about 1,200 U.N. carbon offsets, called certified emissions reductions, or CERs, per megawatt annually.
Signing up 50 projects could generate up to 75,000 CERs a year, he said. CERs traded on the European Climate Exchange settled on Thursday at 13.68 euros each.
The CDM allows investors in clean-energy projects in developing countries to earn CERs on a project-by-project basis.
The expanded form, called program of activities, or PoA, envisages an almost-unlimited number of similar projects being grouped in a single program, cutting auditing costs, and providing the spur for cheaper technologies to cut emissions in a big way, such as more efficient cooking stoves.
Verma said EVI would cover the costs of program design and auditing fees.
"There are two pricing models where someone pays a modest up-front fee and a certain amount of sharing of the carbon credit benefits with us. In the second model, they pay nothing. Obviously, the sharing ratio is different but they can sign up at no cost."
EVI was also looking at arranging financing if needed, given a number of the individual investors were small companies.
(Editing by Clarence Fernandez)