In an exclusive conversation with SolarQuarter India, Jay Kumar Waghela – Head BD (West and East Region), Fourth Partner Energy spoke about the performance of the rooftop segment and likely trends, the company’s current portfolio size, and upcoming projects. He also told us about how the present situation is with respect to rooftop financing.
How have things shaped up for the rooftop segment in India in the year 2021? What trends are we likely to see this year?
• 2021 is a landmark year as India crossed 100GW of installed capacity of renewable energy.
• As per the market research reports, the installed rooftop solar capacity in CY 2021, will be close to 2 GW which is better than the peak of 1.8GW achieved in 2018, thereby reversing the slowing downtrend of the rooftop market despite the challenges faced due to Covid-19 in last 2 years.
• High module prices due to supply chain constraints at module OEMs end and Uncertainties in Net Metering policies at the State level were some of the factors which impacted the rooftop market negatively, however, driven by sustainability mandates and cost reduction goals, the C&I customers have shown more interest and intent to adopt renewables both rooftop and open access.
• In our view CY2022 will continue to witness similar trends – module prices will remain high and volatile due to implementation of BCD from 1st Apr 2022 and the recent announcement of using modules approved under ALMM for Open Access and Net Metering projects, C&I segment will continue to push for increasing their share of renewables. We could also see an increase in the absolute number of solar + storage projects, especially in states where commercial tariffs are higher than Rs 10-12/kWh.
How has your rooftop solar segment performed overall in the ongoing pandemic scenario? What have been some key takeaways from the situation?
• At FPE, the rooftop segment continues to remain resilient. Since we have our presence across pan India with offices/warehouses across 10 states, working relationships with I&C contractors across 25 states the impact due to lockdowns and supply chain disruptions were limited.
• Sufficient provisions in the contracts to protect the developer/EPC contractor in case of delays in execution and obtaining statutory approvals from Discoms/Govt Authorities due to Force Majeure like situations caused by Pandemic/Local Lockdowns etc, having multiple suppliers/contractors across major geographies, increasing use of technology to communicate and collaborate with the team members, using advanced analytics to schedule preventive maintenance, providing employees and their managers the flexibility to decide work from home/office schedule – were some of the key takeaways from the pandemic which can help us going forward too.
What is the current project portfolio size of your company? What new projects are you coming up with in the near future?
• The overall portfolio of FPE is close to 800 MW with rooftop comprising approx. 500MW and Open Access being close to 300 MW. We have operating assets in 5 countries – India, Sri Lanka, Bangladesh, Indonesia and Vietnam. In India, we would be having the largest asset base in the rooftop segment.
• In 2021 we implemented a few Floating and Solar + Storage projects for some of the C&I customers in addition to the regular rooftop/ground mounted behind the meter projects. In 2022 we would like to increase the number/size of floating and Solar + Storage projects. We also aim to implement Solar + EV charging projects for some of our C&I customers.
• As far as large-scale open access projects are concerned, in CY 2022, FPE will be commissioning multiple solar projects in Maharashtra, Karnataka, Tamil Nadu, and Uttar Pradesh and initiate construction of Wind Solar Hybrid projects in Gujarat and some other states.
What is the present situation with respect to financing rooftop solar projects in India? How can it be improved according to you?
• In CY2021 most of the major developers raised equity including us, which is a very encouraging sign. It’s a reflection of investors’ interest in India’s green economy. Developers have adopted innovative methods to access cheaper funds via green bonds, foreign listing, etc. The sector is poised to attract large investments from Indian corporate giants like Reliance, Adani, Vedanta, etc., and attract a lot of foreign funding too.
• Looking at the target of 450GW by 2030 set by Govt of India, the renewable energy sector will need $35 Bn per year, which is 60% higher than the current rate of $14 Bn per year. This gap will need to be filled in by cheaper and longer tenure loans provided by multilateral organizations like the World Bank, Asian Development Bank, etc and financial institutions of developed countries in the form of climate financing.
What are the new capacity addition plans you have for this year?
• FPE is well poised to cross 1GW of operational assets across rooftop and open access portfolios in CY2022. We will continue to expand our footprints in Maharashtra, Karnataka, and Uttar Pradesh in the Open Access segment. We will construct Wind Solar Hybrid projects in Gujarat and a couple of more states. We are working on developing ISTS and RTC RE projects in CY 2022. On the Rooftop segment, we would like to retain our leadership position in the market and expand the portfolio to solar + storage and solar + EV charging projects in CY2022.