Pashupathy Gopalan is the Managing Director, South Asia and Sub-Saharan Africa Operations for SunEdison. Responsible for building SunEdison’s solar energy services business in India, Saarc, South East Asian region, and Sub-Saharan Africa, he led the team that managed the acquisition of SunEdison by MEMC in 2009. Here, in conversation with Ankita Sharma he shares his views on why it is wrong to say that solar power generation has not taken off in India and how the first phase of Jawaharlal Nehru National Solar Mission has been a success. Excerpts:
With bright sunny almost throughout the year, India at one point in time was considered to be a hot destination for solar energy generation. Companies even made investment plans but they could not translate into reality to the extent one had expected. What according to you went wrong?
From August 2011 to July 2012, India went
from 2.5 mw of grid-connected solar photovoltaic power (PV) to over 1,000 mw.
This is a significant achievement for any country just starting to develop its
solar programme and policies. And this is just the beginning. Therefore, I
wouldn’t say anything went wrong. Definitely, with one of the best insolation in
the world, 300+ sunny days and cost of deployment rapidly coming down, solar is
on its way to becoming the key source of energy in India.
With policies having shown the way,
this number will only increase steeply in the coming years. After information
technology (IT) and telecom, India will witness the solar boom in the next few
years as this form of power will eventually attain grid parity.
The country has a potential to harness about 20,000 mw energy through solar route. But the current installed capacity is little over 1000 mw only. What kind of policy spur do you think is required in this sector?
Solar sector in India is just beginning to
grow now and we are destined to hit the 20 gw mark for solar power generation.
As the industry is evolving, it is essential that the government accords
importance to sufficiently developing the manufacturing and servicing ecosystem
for solar power in the country.
Specifically for solar power
development programmes, policies should focus on further strengthening of
payment security mechanisms in order to attract more investment in the sector.
How do you see the input cost (equipment and photovoltaic panels) panning out in near future. How far would India benefit from the competitive market?
The cost of equipment has substantially come down in the last two-three years since the Jawaharlal Nehru National Solar Mission (JNNSM) was announced. Costs have not stabilized yet and we’ll see them decline further in the coming few years. This provides great opportunity to develop solar projects. India will benefit from the competitive market as competition enables price discovery and inspires companies to focus on quality in order to differentiate.
How well do you think phase I of the National Solar Mission performed? What will be the repercussions of phase I? Any learning from there (for the industry)?
The first phase of National Solar Mission
is a very successful programme which has shown the way for solar power
development in the country. The support from MNRE and various state governments
is very encouraging and we are thankful to them for developing very well-thought
out solar programmes in the country.
Awarding projects in a phased manner
is a great initiative as it allows the developers to build more economical
projects by taking advantage of the continuously declining project costs.
Competitive bidding is a great means of price discovery in the market.
What is the industry expecting from phase II? Any specific demand as the government would soon start preparations on the Union Budget?
Phase I of JNNSM has been a very well
managed, transparent and organized programme and we are thankful to MNRE and
NVVN for that. We have been awarded projects in both batches – 5 mw in batch I
and 20 mw in batch II. We have great expectations from phase II and are
confident of its success, just like the first phase.
While the policy has been extremely
encouraging and supportive, it would help the industry grow if phase II focuses
on development of solar parks in states where infrastructure like land and
evacuation is provided to the developers once the project is awarded.
Additionally, maximum size of projects eligible for capital subsidy under the
off-grid solar programme should be increased to 1 mw. There are large rooftops
in India which can really benefit from this. Lastly, the true potential of solar
power lies in remote electrification. Concrete proposals for village
electrification should be included in phase II which enable developers to
responsibly deploy village electrification projects.
What major reforms are required in the present policies to ensure a better future for the industry?
We greatly applaud the policymakers in
India for developing the comprehensive Jawaharlal Nehru National Solar Mission
for the country and the various other state solar policies. These programmes
have provided the much needed impetus for development of solar power in the
The true potential of solar lies in
the fact that it can be quickly deployed anywhere and is a reliable source of
energy. Therefore, we need to give a greater push to decentralized model of
power generation to fully realize the benefits of harnessing the sun. While the
policies have shown the way for utility scale grid-connected solar parks, some
suggestions that will help provide a boost to the captive residential and
commercial rooftop solar market – introduction of reforms like net metering and
time of day pricing will help customers realize actual monetary savings on their
electricity bills and make these business models viable.
Which are some of projects that you plan to do?
We are currently implementing a 20 mw
project in Rajasthan which was awarded under the JNNSM programme Phase I, Batch
II. SunEdison is also one of the winners of the nation’s first roof-top solar
program (2.5 mw) in Gandhinagar, Gujarat. We are deploying solar PV projects on
over 50 rooftops, making Gandhinagar the first solar city in the country. Apart
from this, we are also developing several large-scale rooftop projects for
universities in Tamil Nadu and commercial and industrial customers in NCR, Tamil
Nadu and Rajasthan.
Under the ‘SunEdison Eradication of
Darkness’ program, we are developing solar powered micro-grids in 29 villages in
India and are deploying solar water pumps to aid farmers in agriculture in many
states such as Rajasthan and Tamil Nadu. This will result in additional income
and ease of operations for them.
In South Africa, our team is
implementing 60 mw projects.
Why is Gujarat so attractive for companies in the sector? Can other states replicate Gujarat’s model?
Gujarat’s solar programme is an extremely
well managed and well structured programme. The vision to become a solar state
in India is exhibited well in the state’s initiative to develop one of Asia’s
largest solar parks. Facilities and infrastructure ecosystem for land and
evacuation are provided for in the solar park which makes it very easy for
developers to execute effectively and on time.
Yes, other states can definitely
learn from and replicate Gujarat’s model and in fact many states such as Tamil
Nadu and Andhra Pradesh are alreadey moving in that direction with their state
What is the scenario at lending front? Are banks and institutional lenders willing to lend money given that it is a capital intensive sector?
Compared to other industries, risks in this industry are well defined and there are not many variable factors. Indian developers face the off-taker risk as lenders are hesitant to fund projects due to the risk of payment security. As the industry is maturing, everyone is learning and becoming more comfortable with the technology. This is a positive sign and is definitely going to result in more comfort and willingness on part of the institutional lenders to invest in solar sector.
As some experts feel that India requires euro 30 billion investment to develop 20,000 mw of grid connected solar power by 2012. Is that kind of money available for investments in India?
SunEdison has a stellar reputation among PV
lenders worldwide. Globally, we have the experience of raising $5 billion
finance for solar energy projects. In India, we are grateful for the support
extended by IFC, OPIC, IDFC, L&T Infrastructure Finance, Reliance Capital and
State Bank of Mysore for financing our projects.
Solar projects in India will
definitely attract more investments as more and more financial institutions gain
the confidence that these projects are economically viable and sustainable.
What is the current project pipeline and what is the capacity that you plan over the next two years? Also share the current capacity.
Globally, SunEdison has deployed 1000 mw of
solar PV systems across over 960 projects. In India, we have installed more than
55 mw across 16 solar PV plants. We design, develop, finance and operate both
large-scale utility projects as well as smaller commercial rooftop plants. In
the region, we have built over 35 mw in Thailand, distributed over four
grid-connected utility-scale power plants. Now we are implementing 60 mw
projects in South Africa and over 25 mw in India.
SunEdison has a strong commitment
towards pioneering innovative affordable solutions and making them available in
all parts of the world. In the next two to three years, we will continue to
strengthen our leadership position in the world. We see a great potential in
deployment of distributed solar, as solar power is available at or lower grid
rates in many areas of the world today. With policies having shown the way for
deployment of utility scale solar, we are extremely encouraged by interest shown
by companies and investors in the development of solar farms for wheeling in
power for captive consumption or for sale to third parties. With our relentless
R&D efforts and business model innovation, SunEdison is in a position to provide
solar energy at less than INR 7/ unit for rooftop installations today. Our plan
ahead is to make rooftop solar widespread and within the reach of common man.
(InfralineEnergy thanks Pashupathy Gopalan, MD, South Asia and Sub-Saharan Africa Operations, SunEdison 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.)