Mr. Himanshu Mishra talks about global presence of SunSource, how regulatory uncertainty have adverse effect on solar industry in India and more
What are the solar services provided by SunSource Energy in India? What makes you stand apart from other players in the market?
SunSource Energy is a leading provider of solar-based energy and storage solutions to commercial, industrial and institutional clients in India, South East Asia, Middle East, and Africa. With its in-house project finance, EPC, operations and maintenance capabilities, SunSource manages the entire development process of the solar power plant. Since its inception in 2010, the company has developed a portfolio of 300+ high-quality solar power projects across 24 States in India and 6 countries globally. Highlights include the construction of one of the largest solar rooftop projects in Philippines, a floating solar project for India’s largest Oil company, implementation of one of India’s first private solar rooftop PPAs and Solar + Storage projects. The company is an investee of the Neev Fund – a private equity firm backed by the State bank of India (SBI) and UK’s Department for International Development (DFID).
Our focus on delivering quality, innovative and sustainable distributed solar solutions to our customers enabled us to maintain a leading position in the Indian distributed solar industry with a high repeat client ratio when most of the organizations that kickstarted with us have almost disappeared. This was recently acknowledged at the recently concluded BusinessWorld 40 under 40 awards where one of our co-founders, Kushagra Nandan, was conferred with the prestigious award. Further, we are one of India’s first IPPs to have in-built future PV waste management as part of our Project conceptualization and Commissioning activity. For this, we were awarded with the ‘Global Environment Award 2019’ earlier this year.
Give us brief about MoU signed with the Govt of UP for 200 MW power project.
We were among few solar companies that participated in UP Investors Summit 2018, where we signed an MOU for 200 MW Solar Project with the State Government. The project will be developed with an estimated investment of INR 9 billion and will create around 1000 employment opportunities in the state. Earlier this year, the Hon’ble Minister of Home Affairs, Mr. Amit Shah, broke ground for the 1st phase of this project – A 75 MWp openaccess project that is being developed across different locations in the state. The State government has been very supportive in aggressively tackling the practical challenges that the developers face in developing such large scale projects. Uttar Pradesh is now seeing a rapid growth that will further attract investments, especially with the potential industrial development in the Bundelkhand area. We at SunSource are proud to support the growth of the state by providing it clean energy solutions.
How do you plan to achieve global expansion of your company?
At SunSource, we aim to build a strong Indian Multinational institution, creating thousands of meaningful employment opportunities for the youth. Both the co-founders at SunSource spent over a decade in the US, extensively working on almost every aspect of Solar, be it design, financing or installation, before eventually starting this venture in India as a payback to the country. Today, we have a presence across 24 states in India and 6 countries globally and have one of the largest solar + storage portfolios in India.
In terms of international projects, we have completed a large ground-mount solar project in Philippines, developed one of the largest Rooftop Solar Projects in Philippines, developed multiple rooftop projects in the South East Asia and are also installing projects in Kenya. We have strategic tie ups in these regions and our aim to continue building a strong portfolio of quality assets for the C&I clients in India, South East Asia, Middle East, Africa and other emerging nations.
Can you talk about financing of PV Projects in India, and the challenges that developers face?
Most of the challenges that are already known and shared by other solar developers and it has been periodically emphasized from time to time. When we speak of financing challenges, in actual it is a culmination of many other challenges that poses financing risk as well.
Regulatory Uncertainty is the biggest challenge which not only affects the Project financing but also affects the Project Implementation and Operations. India is a country with huge diversity in solar potential and the same is reflected in the formulation of Regulations and Guidelines.
A simple case example is if a project is conceived based on prevailing regulatory benefits and policy guidelines, and there is a change in the regulations and guidelines just before the project Commissioning, it affects the cash flows, sometimes severely. Regulators and Policymakers need to be sentient of such pragmatic issues while designing the policies and regulations. The very core objectives which solar developers keep in mind are to install projects, serve the customers, and meet up the financial obligations. They budget the functions associated for the project accordingly. There have been instances of retrospective revision of banking charges and provisions recently. Such cases develop apprehensions in the minds of financial Institutions for financing projects in that State and other States also. The Indian solar industry has seen tremendous growth in the course of the past 10 years. The government of India has recently started deliberation on further upscaling the RE target from 150 GW to 400 GW by 2030, however without resolving the challenges in financing and Regulatory framework, it will be an uphill task.
Even though the Central Government is highly positive for pushing Solar Capacity addition, there are practical challenges in financing, perhaps maybe because of past experience with conventional thermal generators or past infrastructure financing issues. What we see as an immediate and long term cure for Financing challenges is the enactment of Renewable Energy Act covering comprehensive aspects of renewable energy. This will have its benefit in terms of uniform deployment of provisions across the State and will help in bolstering the trust of international financial institutions to finance RE Projects.
Further, financing support from Financial Institutions is a must, especially for mid-sized and smaller projects. Today, banks are reluctant to finance projects with a rating less than BBB+, and NBFCs which used to provide valuable construction and bridge financing support that are not active. The red carpet should be rolled out by the Government in helping multi-laterals like the World Bank and other climate funds enter into India, and support existing FIs, a case in point being the World Bank funding for solar rooftops.
Fortunately, such issues have not been able to derail our growth story so far. We are an investee company of the NEEV fund – a private equity fund by the State Bank of India (SBI) and the UK Government’s DFID. We have been able to raise capital whenever we have gone out to the market. This can be attributed to our disciplined approach in choosing our customers and bidding tariffs.