In an exclusive interview with SolarQuarter India, Mr. Gagan Vermani, Founder and CEO, MYSUN threw light on his company’s new venture, opportunities in the rooftop sector in India. We thank him for sharing his views with SolarQuarter.
Mr. Gagan is known for his unconventional and growth-oriented leadership approach, Gagan has spearheaded the journey of MYSUN since its inception in 2016. Gagan has over two decades of rich and varied experience in areas such as Business Development, Strategy, Global Sourcing, Operations, Supply Chain, Cost Management, Capital Markets, and M&A. A member of FICCI’s Solar Energy Task Force, he is a renowned name in the solar industry, policy-making, and financial circles.
1. As a developer how has the year 2020 been for you overall? Any key learnings?
The pandemic year was a year of acceptance and upgradation. There was a drop in the new pipeline as clients were grappling with their own challenges. And the ongoing projects faced initial concerns related to manpower availability, travel, protocols, etc. We managed to complete our pipeline of projects though. We utilized this period to further upgrade our offerings as we launched our asset vehicle during this phase. We also further streamlined our technology tools, processes and systems and re-aligned our resources to key potential markets and industrial clusters. We also raised our pre-Series A funding round during this period and greatly enhanced our prospective client base.
This proved to be of immense help to us as when the 2nd COVID wave hit us towards the end of FY20-21, we were much better prepared. And our pipeline is looking significantly better now with a healthy combination of large C&I, SMEs and individual homes.
The year 2020, towards the year-end, also witnessed a steep rise in the module and BoS costs due to various reasons including commodities increase, raw material shortage and container shortage too. It did impact some existing client orders but were able to work out solutions with most of our customers.
2. Can you brief our readers about the company’s new venture Solar Asset Vehicle MYSUN (Plus)?
Before its launch, MYSUN was always focusing on a highly structured client acquisition strategy backed by technology. But we were letting go of some clients who wanted to work with us but specifically wanted the RESCO model. So last year, we decided that we will leverage our existing client acquisition efforts, project design and execution capabilities and asset management expertise to cater to the RESCO needs of our large C&I clients. And that’s how MYSUN+ was launched. Under this vehicle, we already have a pipeline of projects commissioned as well as under development. And we are also in early stages of development of a few Open Access projects for C&I clients.
We have not only executed a few initial projects under this venture for highly reputed Indian and MNC corporates across Madhya Pradesh, Rajasthan, Andhra Pradesh and Puducherry, we have completed project finance raise for these projects from Tata Cleantech through their Global Climate Fund (GCF) line.
3. What are the current challenges and opportunities especially in the rooftop solar sector in India? How can the challenges be faced?
The distributed solar demand is rapidly growing, driven by the C&I segment followed by homes, primarily due to the huge arbitrage between the DISCOM tariffs and solar energy costs. However, there are certain pertinent challenges that are restricting us to realise the full potential of distributed solar in the country. First and foremost is the regulatory aspect dealing with the lack of support from DISCOMs. However, new draft amendments in the Electricity Act 2003 are quite encouraging. Secondly, the business models of established solar companies are heavily built around the existing RESCO based demand from large C&I. And on the capex side, the landscape is highly fragmented with multiple local solar companies not having the requisite technical capabilities.
With more than 95% of India’s industry falling in the SME/ MSME bracket and with millions of individual homes, the real demand for solar has not even been explored yet. This is where the next big opportunity lies but it requires patience, technology, scale, focus on customer experience and most importantly innovative financing to unlock this huge market. We, at MYSUN, are working on a 3600 approach by investing into developing our business model aligned to this great business opportunity.
4. MYSUN recently tied up with TATA Cleantech Capital for solar portfolio expansion, what capacity do you see being added this financial year?
The recent debt raise from TCCL is a great beginning for us as we are able to give confidence to our lenders in our ability to manage the complete cycle of solar project development and operation. Our target is to become a major distributed solar player in the country and the region. As of now, we are not looking very far. And our target is to first reach a scale of 200+ MWs over the next couple of years while continuing to invest into our portfolio of large Open Access, Rooftop and Financing based offerings and developing our close-to-customer touch-points across the Country.
5. Will further investments by large strategic investors and global power firms etc. will bring about change in the industry? What are your future investment plans?
Further investments by large strategic investors and global power firms will definitely fuel up the growth of solar power. Moreover, the adoption of smart meters, storage systems, and rooftop solar PV systems will bring about a change in the distributed solar industry.
As I said earlier, we aim to invest Rs 600 crore to develop a 200+ MW solar portfolio in the first phase. But over the medium to long term, we plan to be amongst the largest and most credible solar players in the country and the region with a portfolio of solar assets under RESCO through Open Access and Rooftop projects and under our Financing offerings for SMEs and Homes. We are also keenly exploring newer and allied opportunities in the Green Hydrogen and Storage space.
