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Tarun Agarwal, CEO, Ecco Electronics

20 Feb 2013

The multipurpose portable solar lighting systems by Ecco Electronics are likely to change the perception of Indian households towards solar energy. Working as a CEO at Ecco Electronics, Tarun Agarwal, has gained experience in the sector that is in its nascent stage. Speaking with InfralinePlus’ Priyanka Singh, he shared a litany of challenges the Indian solar industry is currently facing.

Where do you see the solar industry going in the next five years? What are the current challenges and how is the industry coping with those challenges?

The industry will be showing an increase in the power generating capacity between 200-400 per cent over the next five years. The industry has a promising future with more investors understanding and investing.

The solar industry in India is still in its nascent stage and faces many challenges such as high costs of solar power generation. Solar projects are capital intensive, and the lack of an effective financing infrastructure for these projects is another major factor impeding growth in this sector.

Another challenge faced today is the disparity in solar potential across states. A major factor restricting the growth of this sector is the lack of standards, resulting in the fragmentation of the market among manufacturers and suppliers. Standardisation of systems will lead to rationalisation of cost, as companies can invest in R&D and newer technologies to meet common specifications.

Can you also compare the industry within India vis-à-vis companies operating outside India? Do we also face challenge from oversupply from foreign players, as they have already build huge capacities anticipating rich growth in the sector?

The truth is, when it comes to technology, the U.S. remains fiercely competitive. While it’s true that China is the leader in solar manufacturing, where do you think that technology was invented?

And if you look at much of the R&D being done in the solar space today, nearly all of the major disruptive technologies being uncovered are coming from the U.S. labs. From solar sprays to cost-cutting designs, the United States continues to lead the pack. Even in the utility-scale solar space, American know-how is enabling new large-scale solar developments all over the world, the most recent being a 250 MW project in India.

Although Areva is a French company, its solar division is essentially a U.S. startup called Ausra that was acquired by Areva in 2010. You know the saying, “If you can’t beat ‘em, buy ‘em”... well, that’s exactly what Areva did. The result: Today Areva — using American ingenuity — is building what will soon be one of the largest solar power plants in Asia. The project will be completed in phases, with the first phase coming online next year, and the second phase coming online in early 2015. Of course, it doesn’t hurt that India is becoming increasingly aggressive with its renewable energy policies these days.

You see, back in 2010 the government announced its National Solar Mission, which calls for 22 gigawatt of solar energy by 2022. India has plenty of reasons to embrace solar power.

As far as challenge from oversupply from foreign players is concerned it is not a challenge as due to the oversupply, prices for cell manufacturing have seen a drop in the past two years by nearly 50 per cent.

India is a country that has tremendous solar energy potential. As the nation is facing an increasing demand - supply gap in energy, it is important to tap the solar potential to meet the energy needs. The solar energy potential in India is immense due to its convenient location near the Equator. India receives nearly 3000 hours of sunshine every year, which is equivalent to 5000 trillion kWh of energy. Considering India’s solar potential, the government has rolled out various policies and subsidy schemes to encourage growth of the solar industry, which is expected to experience exponential growth in the coming years.

What is the support, Industry seeks from government side. How do you view the current import duty affecting the domestic industry (on supply side)?

Currently, research and development (R&D) in this sector is on a slow track due to lack of collaborative and goal-driven efforts on this front. Technological innovations that improve the efficiency of current solar energy systems are necessary to exploit the solar energy potential in India. In order to facilitate this, government has to frame comprehensive R&D schemes and provide incentives along with the current subsidy schemes.

Secondly, standardisation of systems by the government will lead to rationalisation of cost as companies can invest in R&D and newer technologies to meet common specifications. Facilitating closer industry – government cooperation and increasing consumer awareness about the benefits of solar energy are some of the other main challenges currently faced by the industry.

I would also add that policy measures such as JNNSM, aimed at encouraging investment in the solar energy sector, shall help develop a market for solar energy in India, thereby driving down costs. Increasing public awareness about issues such as energy scarcity and environmental preservation shall also fuel the demand for eco-friendly power, hinting at growth opportunities for solar power.

Due to the current import duty policies, the prices of solar panels have fallen by 60% in 2011 due to a number of reasons such as cheap raw material polysilicon prices and high competition between major module manufacturers dropping processing costs. The biggest reason for the solar panel price crash has been the support of the government to the domestic solar industry.

How do you see your company growing in both short-term and long-term?
Solar energy in India has a great future and a rising tide will lift all boats. Note the list of solar power companies is growing by the day. Solar products in India are all set to grow at a tremendous rate in the future, driven by the declining costs of solar power and the increasing price of fossil fuel energy products. It is because of global competition and innovation that solar in India has been growing at exponential rates. The solar power industry will face the facts in short term and smell the roses in the long term.
What is the scene on employee side (in terms of skill)? Do we have adequate skill-set which companies can absorb? What is the attrition rate, and what are the measures companies are taking to offset attrition challenges?

The solar industry will require 60-65 per cent electrical engineers, 20-25 per cent mechanical engineers, 10 per cent electronics engineers and remaining civil engineers in areas where technical expertise is required. Even now, there is tremendous dearth of experienced hands as well as entry-level resources in the solar sector. Solar companies are poaching talent from top conventional power companies in the public and private sectors. Experienced professionals are hopping from one company to another every six months for better compensation packages.

The key to a successful career in the solar industry is “Learning by doing.” 

(InfralineEnergy thanks Tarun Agarwal, CEO, Ecco Electronics for sharing his valuable insights with our readers. The column 'In-Conversation', is a platform to engage experts from various sectors to share their views on the different transformations happening in the Indian energy sector.)