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.

Power Watch India - - CONTENTS -

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.

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