In an attempt to keep Infraline Energys’ readers abreast with the key issues and challenges engulfing the sector, Infraline Energy tries to bring forth the opinion of key personnel whose decisions and opinion play a vital role in shaping the sector. Please find below excerpts from the interview that Infraline Energy conducted:
Karunesh Chaturvedi- Head Corporate Affairs, Vikram Solar shares his views on the company’s expansion plans, issues facing the industry and opportunities for domestic manufacturers. Excerpts:
Please share your current presence in the solar rooftop segment. How much capacity is the company eyeing in the near future?
As a solar PV module manufacturer and EPC solution provider, Vikram Solar identified the growing trend in rooftop almost 7 years ago. We executed our first rooftop project in 2010. And within just 7 years, we have commissioned rooftop solar projects in nearly 150 locations within India. We commissioned a 100 kW installation at the Cochin International Airport, Cochin, Kerala, India in 2013. We installed a 2 MW plant at Netaji Subhash Chandra Airport, which was India’s largest rooftop airport installation at the time of its installation in 2015. We have installed rooftop solar plants in educational institutions namely- BRCM Public School- Gyankunj, Gurudas College, Heritage College, ITI Kamadi (Ureda), YVSS, Bankura, NIT Agartala, Dibrugarh University- Admin Building & Engineering Workshop etc. And our commissioned rooftop solar plant capacity stands to be ~18 MW.
Current initiatives like introducing huge tenders on solar rooftop installations (1,000 MW by SECI), opting for 7,000 MW rooftop installation on Government buildings to increase the solar growth in the country, implementing net metering will surely pave path to higher rooftop capacity installation in coming years. And with enhanced solar manufacturing and tested EPC capacities, Vikram Solar will claim a sizable portion in India’s installed rooftop solar capacity.
Talking of solar manufacturing, please share your existing capacity and manufacturing locations. How much capacity addition is Vikram Solar planning in next five years?
Vikram Solar has expanded its solar manufacturing capacity from 500 MW to 1 GW in 2017. The company has two manufacturing units in SEZ, Falta, West Bengal. We have installed finest machinery and equipment imported from United States, Switzerland, Germany and Japan in our manufacturing factories to uphold the quality and performance promise that comes with products and services of Vikram Solar.
Our modules go through rigorous testing and certification process and our modules have IEC (6208, 61215, 61701, 61730, 62716), UL, MSC, CAN-CSA, CEC, JET certifications that uphold quality and performance commitment that we offer. We have signed MOUs with international tech leaders like team technik and Finwind.
We developed an in-house R&D setup that continuously developed test protocols to validate long term reliability of the modules manufactured. Our products are further tested by world-class, accredited testing facilities like UL – PTL labs, TuVRheinland and DNV-GL product test labs. As a result, our products are at par with most Tier 1 Chinese and US module manufacturers. Focusing on innovation and improvement of the solar industry and global energy scene, we have invested more than INR 70 million in R&D and certification.
India has been adding solar capacity at a brisk pace. The country added more than 4700 MW of solar power generation in first half of this year, which is higher than the 4,313 MW installed in entire 2016. In the light of this, do you feel India is on track to achieve its target of 100 GW by 2022?
India’s intention of solarisation is clearly evident in its policies, initiatives, and investments. The target increase from 20 GW to 100 GW has given the industry a well needed boost bringing investment and encouraging private players to contribute. India’s current 13 GW solar energy capacity statuses is proof of Government initiatives and aggressive progress towards the set target. However, more effort in certain areas is needed.
Currently, only 78% of the total households in India have access to electricity. So, Government needs to rationalize power distribution tariff, improve transmission and help DISCOMs to reach rural areas with electricity.
Creating more demand for the domestic manufacturers through introducing more projects, speeding up project awarding timeframe after completion of auction, bringing more DCR-M quota projects, can help the domestic solar industry to compete with foreign players globally.
Although, country has assigned each state an RPO target, most of them have failed to reach it. Enforcing states to buy renewable energy is the best way to make it a mainstream energy, reaching targets. So, India needs to focus on that as well.
Reducing rate of incentives and subsidies, lack of R&D improvements and lack of awareness in the country are coming in the way of solar growth in the country. Favourable policy environment is needed to protect the industry, which will in turn initiate socio-economic growth in India.
Uncontrolled solar module dumping (expending $1.3 billion in FY 15-16 and $2.17 billion within April 2016 and January 2017, 35 times its solar equipment export) has reduced the demand of domestically manufactured modules. With foreign (Chinese) module suppliers claiming 8 out of 10 top positions in India, Indian solar reliance is unrealized. Imposing anti-dumping on foreign (Chinese) module imports is needed to protect domestic interest. Removing these hurdles can correct India’s path towards reaching the 100 GW target while assuring that Indian solar reliance is realized.
The industry has claimed that though the government has said GST would be applied to solar modules at a concessional rate of 5 percent; there is still no clarity on whether it will be extended to other equipment as well. In your view, how will GST impact the solar sector?
We support the implementation of GST in India since it will infuse efficiency in the system and remove any cascading effect of taxes. There has been concerns regarding the impact of GST on solar sector since there will be an upward revision in prices of modules and balance of systems. While the modules will now attract 5% tax from NIL earlier, other BoS may see taxes ranging from 5-28%. This may impact the viability of projects.
Various cases have emerged in recent times whereby state utilities have been renegotiating solar tariffs finalised under PPAs to get better rates. What do you make of this trend? Do you feel it makes sense to opt for fresh biding to reflect current state of affairs and future prices in the offing?
Many states in India have recently asked the developers to reduce the solar power tariffs as the projects reached completion stage, against the agreed agreement earlier. State’s move to renegotiate tariffs after signing PPA’s will damage its credibility and scare off investors, slowing solar growth within the state.
Many states have cancelled bids and with it, the hopes (of securing long-term power supply contracts) are dying down. In some instances, delays in signing PPA after awarding the project is prolonging project completion time frame and scaring off investors by further reducing ROI. Such steps are breach of PPA agreement. Since some of these PPA agreements do not have any clause to penalize entities that are going for re-negotiation, this new trend is becoming a hurdle for solar growth within the country. Government should focus on maintaining consistency in policies and regulations to build investor confidence.
The MNRE recently issued fresh guidelines and order for standard specifications for solar PV modules which will be enforced after August 30, 2018. The order mandates the sellers and makers of solar PV systems to get their products registered under quality parameters set by the Bureau of Indian Standards. In your view, how will these directives impact the solar sector?
While quality measures will avoid spurious material and out of specification products from entering the Indian market, there are few procedural challenges which need to be addressed. Module manufactures like Vikram Solar already have necessary IEC certifications which meet international standards and adding one more certification process which requires similar testing may lead to increase in cost, documentation and bureaucratic hurdles.
We suggest that BIS can approve basis existing certification (IEC) documentation, which will be faster than re-testing, and include additional/new tests as per Indian conditions. The government should also develop standards for balance of system materials like solar cell, EVA, junction box and backsheet. Additionally, suppliers and manufacturers with poor financial health should not be allowed to apply for certification of solar modules and cells in India.
The anti-dumping petition filed by domestic manufacturers against solar imports from China, Taiwan, and Malaysia with the Directorate-General of Anti-Dumping (DGAD) has been accepted. How do you see this impacting import of solar equipment in India?
Re-visiting the recent Anti-dumping issue in the solar industry can bring the results India desperately needs. Imposing anti-dumping on modules will make domestically manufactured modules competitive. It will create demand for the domestic modules, improving manufacturing eco-system within country. More demand for locally manufactured modules will increase job opportunities (estimated to be 5,000 per year) and increase focus on R&D. Imposing anti-dumping duties on imported modules will also save approximately $3bn, which will improve industrial infrastructure within the country.
Although, blocking imported modules to undercut the domestic market has quite a few benefits, imposing similar % of anti-dumping duties on imported cells will increase module prices and show decrease in demand especially in the rooftop segment. Therefore, it is important to impose a differential duty % (duty on imported modules should be at least 10% higher than cells) on module and cells to utilize the enhanced domestic module manufacturing capacity.
Infraline Energy would like to thank the contributor for his/her valuable time and opinion shared on the topic.