India’s solar energy sector is witnessing new churn with Reliance and other companies expanding their portfolios and presence in it. Among the lot is Vikram Solar, one of the oldest solar energy players in the country. In an interview, Vikram Solar’s managing director Gyanesh Chaudhary talks to Jyotika Sood of Outlook about the sector and new disruptions. Edited excerpts:
1. How do you see the solar sector with stalwarts like Reliance, Adani planning their expansions?
India is endowed with vast solar energy potential, which is still untapped. India’s solar potential is ~750 GW and we are currently at ~42 GW installed solar capacity. This offers immense potential for all players to harness and grow. Scaling-up domestic solar manufacturing is the need of the hour, and we firmly believe in 'more the merrier' to build a robust manufacturing ecosystem in India.
The demand surge for solar energy coupled with a clarion call globally to diversify trade markets and supply chain presents a huge opportunity for indigenous solar manufacturing. We have seen exponential growth in solar in the last decade with 35-40 GW capacity addition. In my view, technology will be the key enabler and Vikram Solar will continue to focus on leveraging technology to bring down Levelized Cost of Energy (LCOE).
2. How will the solar sector be impacted with 40% basic customs duty on solar modules and 25% on solar cells to be imposed from April 2022?
The implementation of Basic Customs Duty (BCD) by the Ministry of New and Renewable Energy (MNRE) on imported solar cells and modules is a testament to the government’s intent towards enabling Aatmanirbhar Bharat and making India the global manufacturing hub for solar energy. These duties will create a level playing field and enable cost competitiveness of domestic module and cell manufacturers. It is a step in the right direction to create a self-sustaining ecosystem for solar equipment manufacturing in India, job-creation, and reduce solar imports.
However, we urge the government to consider exempting BCD on manufacturing units located in Special Economic Zones (SEZs) aligned to the Aatmanirbhar Bharat vision. We also request the government to allow deemed pass-through for DCR Modules when BCD is implemented.
Vikram Solar will remain at the forefront of partnering with the government in building the new, energy-rich, and self-reliant India with our state-of-art technologies, manufacturing prowess, and diversified product portfolio.
3. Do you think solar companies have started to pass on the prices?
The input cost such as glass, back sheets, aluminum frames for modules has risen significantly. The solar glass price has gone up between ~100-130 % since June 2020. Additionally, the prices for polysilicon and silver have also witnessed sharp increases. This sharp rise in raw material cost has caused an overall module cost increase by about 35%. Additionally, the freight rates have also increased substantially due to a shortage of shipping capacity under COVID-19 regulations, thus increasing module prices further. Solar panel manufacturers are unable to fully absorb the steep rise in upstream costs.
4. What kind of technology innovations do you think are required in the solar sector?
The technology should be mainstream and scalable. Technology advancement has been the key enabler of the declining cost of solar. Today, India is amongst the cheapest producer of solar energy as a result of indigenous technology developments
At Vikram Solar, our R&D efforts are focused on bringing down the Levelised Cost of Energy (LCOE). We continue to focus on introducing technologically superior solar products to reduce space requirement, increase energy efficiency, offering a faster ROI with increased longevity and performance. In the last couple of years, we have launched the Monocrystalline module SOMERA, smart module SOLIVO, High-efficiency Multi Bus Bar half-cell modules, and first bifacial PV modules along with half-cell module series. Recently, we became the first Indian company to introduce PV modules with higher efficiency, more bankable, and reliable M6 cells.
Solar technology is evolving at a rapid pace, hence, CAPEX investment in solar manufacturing should be planned to integrate future technology developments. Aligned to the same, our new manufacturing unit at Chennai has forward compatibility with upcoming technologies such as M10 & M12 cell modules, high-efficiency bi-facial & smart modules. It is capable of handling module wattage up to 640 watts.
We recommend few policy interventions such as allowing a super deduction of 200 % for R&D expenses for new and clean solar technology development and the “Technology Upgradation Fund Scheme” to further boost R&D in the solar sector.
5. What are your plans?
We see demand increasing domestically as well as internationally. The pandemic is a huge opportunity for India. Globally, countries are looking at India to diversify their imports and supply chain. In India, the green energy target of 450 GW encompasses solar power generation of 280 GW by 2030. Thus, the domestic demand will witness a huge surge across segments from the PSUs, private institutions, and retail adoption. At Vikram Solar, we see the supply to increase both domestically and internationally in the future. Our focus will be on high-growth markets with ample development potential, i.e. India, USA, Europe, Southeast Asia. To meet the increasing demand, we have significantly enhanced our manufacturing capacity by another 1.3 GW with our new manufacturing in Indospace Industrial Park, Oragadam, Tamil Nadu. This new capacity expansion has made Vikram Solar the largest solar PV module manufacturer in India with a 2.5 GW capacity. We plan to further double our cumulative capacity to 5 GW in the next 5 years which will include expansion of our Tamil Nadu unit to 3 GW integrated module, cell, and wafer.
Our new facility in Oragadam, Tamil Nadu will also be the incubation center of next-generation solar technologies. On the technology front, we will continue to focus our R&D efforts on bringing down LCOE. The new unit has forward compatibility with upcoming technologies such as M12 cell modules, high-efficiency bi-facial & smart modules. The facility will produce mono PERC modules with a peak output of up to 640 watts. We are working on M10, M12 solar cell technologies after bringing M6 cell-based modules in India as the first Indian manufacturer to do so.