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Mr. Ketan Mehta, Director, Rays Power Infra

15 Jun 2015

Indian companies have an edge as they can get work done in less time

With growing demand for clean energy and government’s ambitious initiative, increased number of foreign firm are interested in doing business here. How well equipped are Indian companies to take on the challenge thrown by foreign players, Ketan Mehta, Director, Rays Power Infra speaks to InfralinePlus as to what advantage Indian companies have vis-a-vis foreign players and what are their changes in the clean energy battleground. Excerpts

With government announcing new target of installing 100 GW capacity by 2022, there seem to be a lot of enthusiasm in the solar segment. How achievable is the target considering that earlier target was just one-fifth of the revised target.

This target however ambitious has its pros and cons. The pros are that it has revived the solar sector and sent vibes of rejuvenation among various stakeholders of the sector. It has opened gates for foreign investors by showcasing the seriousness of the government for the solar sector.

The cons are that the existing indigenous capacities of the modules and other equipments for the solar sector are not sufficient for this target. The module manufacturers of India are finding it hard to cope up with the JNNSM VGF demand of modules.

However, keeping in mind the existing policies and tenders floated by the government of India and active participation by states, this target will be achieved within due time.

With this ambitious plan, there would be challenges on several fronts such as technology, raw material, parts used in panels etc, skilled resource to install solar plants. How do you think India will address this issue.

India has to revamp their solar equipment production capacity 10-fold to cater to this target. However, the competitions from Chinese developers are intense and imported modules are preferred due to considerable cost difference. But other equipments like transformers, inverters, etc has to be scaled up on a massive scale to match the target.

There are many companies from outside India, which plan to enter Indian solar power market given the opportunity opened up by the government. What advantage will Indian companies have, if foreign players compete with them on Indian soil?

Indian working environment is very different as compared to European or American working environment. India is a very complex market in respect of doing business and getting work done on ground. The Indian company will get a fair bit of advantage in terms of getting the work done at a quicker pace as compared to foreign companies.

However, foreign companies have an advantage of their access to cheaper finance as compared to Indian companies.

Do you think, ‘Make in India’ campaign will benefit India’s medium and small scale (industries) segment. What role do you see for MSME sector especially in solar power segment.

The ‘Make in India’ campaign will definitely benefit India’s medium and small scale industries. Apart from solar module, which forms approximately 50% of the equipment used in the solar plant, all other equipments are generally sourced locally. These equipment manufacturer will have get a huge push with the Make in India campaign.

Are there any challenges on financing the projects? If yes, what should be done to ease those challenges? What do you think should be done for better grid connectivity of solar power?

Financing of solar power projects is a main hurdle in the installation of large scale solar power plants. The high interest rates affect the IRR projections considerably. The government should provide low rate finances and provide low hedging costs specifically for solar power plants.

The latest plan of the government to introduce dollar-tariff was a step towards the right direction. This step would allow Indian investors to access cheaper foreign finance.

Rays Power Infra advocates for having more solar parks. What are the advantages of solar parks vis- a-vis new green field projects?

Solar Parks provide a plug and play facility wherein the investor will get the land, evacuation facilities, water, electricity, fencing and other related infrastructure readily available for the solar power plant installation.

This not only provides ease of installation but also reduces the time period for installation of solar power plant thereby saving a great deal on IDC.

Any plans to diversify in other segments of power generation?

We are diversifying in the transmission sector as well. We have recently installed a substation and transmission line for 160 MW wind power project in Rajasthan.