SolarQuarter India magazine interviewed Mr. Umakant Shende, Country Head, India at Cleantech Solar. He spoke about how the current budget would help the solar sector, policy implementation and requirements to ease financing and bright future of solar in India. He also shared key learnings from the year 2020.
1. As a developer how has the year 2020 been for you overall? Any key learnings?
Undoubtedly, all business establishments, irrespective of their strength and type of industry, have been affected by the coronavirus pandemic. The lockdowns and restrictions in the wake of the pandemic have had an effect on economies across the globe, such as disrupting supply chains, delaying projects, and creating a shortage of labour. The solar sector has not been left untouched by this unprecedented crisis, but it is encouraging to see the robustness and resilience of demand from customers.
At present, the solar industry imports 80 percent of its primary solar value chain supplies from China. The pandemic has drastically affected the solar supply chain. The availability of shipping lines and containers has been a constraint, increasing shipping costs. We believe that the current situation is expected to further impact capacity and future bids. Furthermore, it will become difficult for developers to control price surges, as the cost of supplies from other sourcing nations has gone up by 15-20 percent.
As this pandemic has made work from home the new normal, IT has played and will continue to play a major role in documentation and virtual meetings. In the absence of personal meetings and co-working, collaborating with various stakeholders effectively through virtual platforms has been a key learning experience.
2. What is your take on the current budget? How do you think the budget would help in improving the Solar game in India?
As per the current budget, customs duty on solar inverters has increased to 20 percent. Although inverters have a much smaller share in overall project costs, it is likely to lead to a net 2-2.5% increase in overall project costs. The budget is focused on realizing the goal of ’Aatmanirbhar Bharat’. This push for self-reliance will not only promote indigenous manufacturing of inverters but will also lead to job creation in the manufacturing sector.
3. According to you, what more needs to be done on the policy front to ease financing for solar energy projects in India?
India has immense potential for producing solar energy and this provides a clean and attainable replacement for the harmful, polluting and rapidly depleting conventional sources of energy. Development of policies for the practical utilization of solar energy can help India emerge as a leader in the global arena.
Policy implementation must be easy, straightforward and stable, without frequent changes. The government should implement ’One Solar + One India + One Policy = One India Solar Policy’. This will enable investment in solar projects in India.
In the case of rooftop solar projects, there should be more clarity towards the requirements of net metering, net billing, behind the meter and gross metering for commercial and industrial segments, as the policies vary across states. The choice of behind the meter for captive rooftop solar projects should be left to the consumer. I strongly believe that rooftop / distributed solar is good for the grid and consumers in the long term. Rooftop solar allows consumers to convert unused roof assets into green electricity generating power plants. The consumers are then able to utilise the same amount of electricity that is generated on-site, thereby diminishing the transmission and distribution loss. In this sense, rooftop solar is not only better for the environment, but it also reduces grid stress during peak hours and results in electricity cost savings.
The lack of solar-friendly policies and their inconsistencies have also had an impact on solar industry investments. The industry wants consistent solar-friendly policies for a few years at least. Abruptly changing or discontinuing policies like net metering or imposing surcharges have a negative impact on industry sentiment. All state and central agencies responsible for the implementation of renewable energy programs, along with the state distribution companies, should come under one common consensus and finalise targets in line with Government of India’s renewable energy targets.
4. What according to you has been the biggest milestone on your path in the Solar journey?
Despite various challenges in solar policy and financing, India has been able to achieve competitive solar tariffs, which have in turn provided a cheaper, cleaner and greener power resource to the country.
5. How do you think the solar sector is going to progress in India in the next few years? How do you see Cleantech Solar contributing towards the same?
The solar sector has enormous potential in India. India is blessed with abundant sunlight in all seasons and we must use the same judiciously. Cleantech Solar is committed to continuing the investment and development of more solar projects across the country, thereby enabling greater adoption of solar power and contributing to nation-building.
6. Lastly, please tell us what we can look forward to from Cleantech Solar in 2021?
Cleantech Solar is well capitalized and focused on the C&I sector. We continue to deliver the best value to our customers in meeting their carbon reduction goals whilst achieving maximum savings on power costs.