Sustainability and balancing profitability with cost structure is going to be a major concern, says Krishnan Rajagopalan, Head Solar Business, Anchor by Panasonic, in an interview.
Says Krishnan Rajagopalan, Head Solar Business, Anchor by Panasonic, in conversation with R Srinivasan.
Kindly elaborate on issues, challenges and potential of the solar engineering, procurement and construction (EPC) business in India going forward.
The Solar Engineering Procurement and Construction landscape is dominated by large and organised players as well as small players. This highly disparate landscape also fuels growth of the industry as well as both its positive and negative implications. The large organised players bring in standardisation in the business, for example Anchor by Panasonic follows global EPC standards when it comes to EPC. Various factors such as BOS as well as project sustainability are taken into consideration. Panasonic Corporation itself being a solar panel manufacturer with vertically integrated factory, brings advanced technology in this blend. Going forward sustainability and balancing profitability with cost structure is going to be a major concern for the EPC business as the quality of BOS components matters as well.
Comment on how the solar rooftop market space in India fared during 2016-17.
While there was a spike in demand of the solar rooftop market during 2016-17, Chinese modules penetrated the solar rooftop market as well. Panasonic markets high efficiency solar PV modules and the technology is expensive as compared to Chinese or locally manufactured modules. However, impetus of the present government on renewables has definitely boosted rooftop sales as well. The National Solar Mission expects 40 GW of the 100 GW target to be accomplished through off-grid rooftop by 2022. BNEF’s report, titled Financing India’s Clean Energy Transition, states that rooftop solar has already become the fastest-growing renewable power sub-segment in India’s clean energy market, growing three-fold from 72 MW per year to 227 MW per year since 2013. One of the main issues for solar rooftop space developers is financing, second being ensuring sustainability in terms of service offerings.
The ambitious targets for the solar rooftop market seem great on paper but what will be the reality in terms of issues and challenges and what ought to be done?
The solar rooftop market currently faces two key challenges - the first being the cost of investment and its return. A typical rooftop project can deliver returns on investment in 10-12 years depending on various other factors not just the EPC or the panel or project design. Achieving a perfect balance of system and optimising space utilisation will be an area of concern for developers. While obtaining finance is one of the major hassles as well, the quality of panels and components used needs to be standardised as well. Net Metering Policies of various states again need to be standardised.
Kindly suggest what ought to be done since as per MNRE, about 113.5 million solar panels that India imported in 2014-15 were from China - about 70% of total import quantity (161.5 million). Comment on import of such solar equipment and its allround ramifications on India.
Low cost Chinese panels when used in public infrastructure may damage the project’s sustainability as the cost of power is bound to go high. MNRE needs to offer lucrative incentives to establishments willing to develop high efficiency
technologies that can benefit India on a longer end. Reliability of panels matters and so does the reliability of other components. Using a low costlow energy generating panel will not just waste space but also increase the cost in the long run as panel degradation is usually high, which ultimately reduces capacity to generate power.
Your views on solar power equipment manufacturers who are concerned about GST and how it would ultimately burden consumers.
GST may come as a boon to solar power equipment manufacturers, particularly domestic manufacturers as ancillary taxes would go away. Typically solar rooftop is mainly in the infrastructure and B2B space so end consumers most likely will not be burdened with the implementation of GST.
Solar has picked up pace but distribution companies (discoms) are reluctant to purchase solar in light of low power demand and cheap power availability on exchanges. MNRE is mulling a $400 million fund to protect clean energy producers from payment delays by discoms. Will this suffice or suggest what the govt should do to restore confidence among developers and investors.
Ideally the government should offer subsidies to industries who aim to become IPP’s. The $400 fund may fall short as the discoms are not in great financial shape. It is important that fair pricing is assured to solar power producers with standardising net-metering policies of various states.
Kindly comment on the benefits of low-cost solar powered irrigation pumps (SPIP) as compared to diesel-powered pumps also in terms of savings in diesel costs.
Diesel powered pumps have extra fuel costs to be borne every time they are operated. Solar is pretty much a one-time investment as once the system is designed and the project is executed it requires virtually zero maintenance apart from some ancillaries such as cleaning of panels etc. Typically, a 1000 Wp solar water pump is capable of drawing and pumping approximately 40,000 litres of water per day from a source that is up to 10 metres deep. This is sufficient to irrigate about 2 acres of land with regular crops. A 1000 Wp solar water pump helps save up to Rs 45,000 when compared to equivalent use of a diesel-operated pump over a year. Again the topography and water levels differ from place to place. So it is an important factor to be taken into consideration and the company has fuelled some pivotal projects in the remote district of Jawahar, where solar-fuelled pumps are used to transport water to a tank for supplying to smaller villages called Padas. The said Project ‘Jaldoot’ also won a CSR award at the recently-held World CSR Congress.
Solar pumping technology is still out of reach for most farmers who do not have the financial means to pay upfront for such equipment. Which financial model (grant model, grant-cum-loan model or the pay-as-you-go model) would be most suited to scale-up adoption of solar pumping sets?
The farmer cooperatives can look towards making a consolidated payment towards the initial expenses. The government can offer them a subsidy for clean energy. The grant model will work but it is important to ensure that timely maintenance of projects is undertaken.
Your views on large-scale deployment of electric vehicles (EVs) in India in view of insufficient EV charging infrastructure to support it.
The govt should first look at EV charging infrastructure. EVs are not really finding takers in society. While its plan on making India a 100% EV nation by 2030 is ambitious, the practical aspects need to be looked into more seriously. One of the major hurdles of EVs is charging. It is not feasible to take an EV for a long-distance journey due to lack of sufficient charging stations; also, some EVs are not as fast as conventional fuel-powered vehicles. And while companies are working to resolve issues on the automobile manufacturing front, the government should look into building the necessary infrastructure.
Consulting firm Bridge to India termed the recent low winning bids for solar power projects in India “unsustainable” and warned that “inadequate risk pricing poses a severe viability challenge for the sector”. Your views on the same.
The firm is absolutely right, eyeing the fact that infrastructure may use modules with low efficiency and the equipment as well as project design standards may not be up to mark. Yes, the viability challenge does exist.
Are module prices expected to extend their drop in 2017 as global supply exceeds demand? Your perception of solar in 2017 and going ahead.
We are expecting prices to stabilise this year. While module technology is taking new strides year-onyear, it is important that prices do not drop. While we do not see an immediate drop in the highefficiency space, there may be a slight price impact in the overall market.