Mr. Shashi Shekar, Vice Chairman ACME shares his valuable insights on India’s innovative trends, challenges our domestic solar industry faces and much more…

1. What are the latest worldwide innovation trends has India been able to keep pace with the same?

India has limited solar cell manufacturing capacity and they are not following the international benchmark of efficiency. Though we have decent capacity of module manufacturing, the country mostly imports modules for setting up power plants. The current protectionism measure on components of modules has made module manufacturing nor being able to compete with China, Korea, Taiwan etc.  

What are the main challenges domestic solar industries is currently facing and where do you see the future of the Indian PV market?

India has a great solar potential and had commissioned about 30 GW cumulative capacities so far. India Government is promoting all renewable energy but solar is surging due to its efficiency, scalability and amenability for better forecasting.

Its scalability is determined by the continued reduction in tariff, so as to economically displace variable cost of thermal power. Tariff is dependent on the price of solar panels, GHI, interest rate and taxes & duties. Cost of solar panels is coming down and likely to continue. GHI is natural to a locality and is a given situation. High interest rate with unfavourable lending conditions by public sectors financial institutions, frequently changes of taxes & duties structure, absence of land leasing framework, lack of robust payment security mechanism,  are some of the important challenges being faced by the solar power sector. Regional or National level of load dispatch adopting merit order dispatch, will enable Discoms to absorb more cheap RE that will reduce their financial losses. Transmission capacity constraints of ISTS located in high GHI areas are yet another challenge. 

Despite the above factors, India has made rapidly added solar power capacity to achieve 100 GW by 2022. 

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What pipeline of projects do you currently own, kindly specify the size of the project, its location, tariff, scheme, timeline of completion, its viability

From a humble beginning of 15MW solar company in 2011 to being India’s largest solar energy company contributing 5500 MWp (DC Capacity) today at 2019. This tremendous growth can be attributed to its technology and costing, innovation to successfully bidding for projects and timely commissioning. 

ACME started its solar power journey from first solar project in Gujarat and then expanded to multiple locations. After Gujarat, second and third state to venture was Madhya Pradesh and Odisha, and then successfully we made our presence in all major states like Rajasthan, Chhattisgarh, Bihar, Uttar Pradesh, Punjab, Uttarakhand, Andhra Pradesh, Telangana and Karnataka. 

Currently we have an operational solar capacity of 2500 MWp and the balance 3000 MWp (DC) is likely to be installed in Rajasthan. ACME growth is also virtue to its hard working and penchant employees who have set industry benchmarks for maintaining quality in their work, and also incorporating best industry standards for safety, environment and security during project execution. 

Has the safeguard duty led to any significant positives for manufacturers?

Safeguard duty (SGD) was imposed on 30 July 2018 on the imported solar modules. The purported intention was to protect domestic manufacturers. There seems to be no perceptible help to the manufacturers, though it has resulted in an increase in tariff and created an uncertain environment for investment to take place. 

For long term profitability, ensuring good asset quality is very important. What are some key areas which directly impact the life and performance of large scale solar assets?

 We cannot allow slippages in any sphere whether it’s BOM like Module, Inverters, or Projects processes, ACME has a clear and defined focus on each activity of the project. Once specification is defined, it is obligatory for us to honour it and make sure that there is no threat in terms of generation and reliability.

ACME had performed really well in the tenders last fiscal. As Head Quality, how have you managed to be aggressive in bids while ensuring high quality of solar assets?

High price does not necessarily mean good quality and vice versa. We believe in working with our partners, finding ways of doing new innovations and then do round the clock monitoring to make sure there are no compromises in implementation. 

Kindly enlighten on “Energy Storage as Game Changer”…Technology & Cost Trends, Incentives and Government Support needed

Lithium-ion Battery is the new storage technology after Lead Acid that is slated to grow very fast in the coming years. Currently, these are being deployed for various applications such as Home lighting Solutions, Microgrid/ MiniGrid and some of EV’s (Electric Vehicles) applications though the mass application is yet to come. 

Lithium-ion battery price is witnessing rapid fall in price and the technological development is further increasing storage capacity without adding to size and weight. It is expected that the cost of Energy Storage System (ESS) will reach a low level by 2025 that would make stored energy cost very competitive. It is expected by 2025 Energy Storage System (ESS) would become a very big market.  

After use in Electric Vehicles, Lithium-ion battery can also be used for storage application and power supply. The cost of such power would further get cheaper as cost of battery would have been recovered in running EV’s. 

Mr. Parag Sharma, Chief Operating Officer ReNew Power shares his views on India’s ambitious target, upcoming RE hybrid opportunities and more.

Where do you see the Solar Energy industry in India poised vis a vis the Government’s ambitious target @ 100 GW by 2022?

The Central Govt. in 2015 revised the Solar Power installation target from 20 GW to 100 GW by 2022. Over the last 5 years, the solar capacity installation in the country grew at CAGR of 60%, and as on March 2019, it stands at ~28 GW, as a result India is now the 5^th largest nation in terms of solar capacity installation. The exponential growth has been achieved on the back of precipitous drop in solar tariffs. 

The solar industry has seen favourable push from Indian Govt. as a result the country almost doubled its solar installation from FY 14-15 to FY 17-18. The momentum can be built upon through consistent regulatory support, timely implementation of grid infrastructure and roadmap of future tenders is paramount to achieve solar target of 100 GW by 2022.

Against the backdrop of the recently concluded Green Bond Issue, how do you perceive Renew Power in furthering its growth with additional capacity build-up of new RE projects?

ReNew Power has since its inception invested in high quality assets and created value for all stakeholders. The recently concluded green bond issue of $435 million allowed us to make our capital structure more efficient by refinancing a portion of existing debt and also finance high quality greenfield projects. Although, we have been active in participating in tenders in last financial year, we exercised prudence in picking tenders. Having said that, we were also able to build up a stable pipeline of 3.5 GW Wind & Solar projects to be constructed in next 2 years at relatively better price. 

Also, we have been growing inorganically, we have successfully completed 4 brownfield acquisitions on varied sizes in recent past. We will continue to seriously evaluate the future renewable tenders as well as high quality assets on sale to deliver better value to our stakeholders and also strengthen our position as the leading renewable Independent Power Producer. Further, we are planning to diversify in allied new technologies in renewables to replicate our success in solar and wind businesses.

How has the last FY 2017-18 been for your company? Has the temporary slowdown in the growth of solar sector impacted your company?

During the last financial year 18-19, we achieved several important milestones that further strengthened our position in India’s renewable energy landscape:

• Our total capacity (both commissioned and under construction) is touching 8 GW, which is the largest in India. Now, we are contributing 1% to India’s overall energy generation.
• We completed acquisition of Ostro Energy (1.1 GW) in April 2018, which is India’s largest M&A deal in renewable energy sector.
• Canada Pension Plan Investment Board (CPPIB) increased its stake in our company by investing an additional $144 million last year.
• We successfully commissioned our largest solar project of 300 MW at Pavagada, Karnataka.
• We successfully commissioned wind project of 250 MW (in Kutch, Gujarat) won under the first SECI ISTS reverse auction in India.

During the FY 18-19, ~13 GW of solar capacity was awarded which is double of the previous year, out of which ReNew Power won more than 1GW of solar capacity. 

What are your views on the new government policy of Anti-dumping duty?

The recent move to impose anti-dumping duty of up to $1,559 per tonne on solar cell component Ethylene Vinyl Acetate (EVA) sheets for 5 years from China, Malaysia, Saudi Arabia and Thailand is another step to promote domestic manufacturing of solar modules after imposing safeguard duty in July 2018 for 2 years on solar cells and modules. 

While we are in complete support of Govt. effort to promote Make in India, but such support should be in the form of tax breaks and capital subsidy rather than tariff barriers. We believe levy of Anti-dumping duty on EVA sheets is counterproductive as currently there are not many domestic players who manufactures quality EVA sheets, which could lead to supply constraint in the domestic market. Further, this may also lead to increase in domestic solar module manufacturing cost pricing them out of competition. Therefore, the tariff barrier might have negative impact on the overall solar manufacturing base in India.

What are your views on emerging RE Hybrid technologies such as Wind Solar and do you also plan to allocate investment in this sector given the fact your company has a good mix of Solar and Wind assets?

Hybrid renewable energy systems usually consist of two or more renewable energy sources utilizing common infrastructure together to provide increased system efficiency as well as greater balance in energy supply. The most common of them are the Wind Solar Hybrid projects that may also couple with storage to provide a stable power output. This in turn partially address the concerns of distribution utilities over grid stability arising due to the intermittent nature of wind or solar. Following are some suggestions which can make the opportunities more bankable:

• Clarity on regulations – Metering mechanism, Renewable Purchase Obligation accounting, Scheduling and Forecasting etc.
• State Revenue land use to be permitted for Hybrid projects.
• Tendering authorities should understand that while there are marginal savings due to cost synergies, the impact of poor resource of one of the technologies has a much larger negative impact on project economics. Therefore, a ceiling tariff for the bid shall be accordingly determined.

ReNew power continues to seriously evaluate new upcoming RE hybrid opportunities.

1. Mr. Harjinder Kamboj, Head-Quality Azure talks about future of India’s solar industry and quality parameter that should be maintained.
3. Where do you see the Solar Energy industry in India poised for the next 10 years?  

Solar Energy Industry is expected to grow at a very fast pace in India owing to majorly four positive factors: 

1. Robust demand due to good economic growth.
2. Increasing investment because the sector has become quite attractive for both foreign and domestic investors.
3. Policy support as Government has ramped-up target to achieve 100GW solar installation by 2022. Hopefully, this trend will continue beyond 2022 as well. 
4. Competitiveness advantage that India has because of the availability of sunlight throughout the year.   

We have seen that in recent years, growth of solar energy in emerging markets had been phenomenal. India has already overtaken the US and has become the second largest solar power market in the world, in terms of solar power installations. 

The country currently stands at almost 25 GW of grid-connected solar power capacity as compared to 9 GW in 2015. Large scale solar installations in India account for 87 percent of solar capacity while rooftop sector has also picked-up. Last year, solar accounted for nearly 53 percent of new energy capacity additions in the country and this is great news for solar sector.

For a developing country like India, where electricity for every home was once considered a dream is now close to reality. The government initiative of ‘power for all’ is changing the socio-economic structure of the country. In fact, people are demand 24×7 power supply and Government is also working tirelessly to fulfil their demand.

The sector also has immense potential to create new jobs; 1 GW of Solar manufacturing facility generates approximately 4000 direct and indirect jobs. In addition, solar deployment, operations and maintenance creates additional recurring jobs in the sector.

Are we seeing a major push towards better & smarter technology in solar sector by the EPC contractors? 

With power tariff hitting all time low, developers are under tremendous pressure on cost. So, at present, more focus is on reduction of project cost per KWp, while maintaining quality of equipment and construction at the same level.  

However, a lot of developments have been seen in this regard, like; 

• Development and use of new construction machinery and tools for a quick project handling. 
• Optimization of efficiency and reliability of photovoltaic systems.
• Use of String Inverters rather than Central Inverters in order to minimise the mis-match losses and to maximise the output.  
• R&D of utility-scale energy storage systems for stabilization of regional power grids. 
• Combination of Wind, Solar and even fuel-based energy sources in Hybrid Power Plants.
• Co-operation with energy suppliers and grid operators for an utmost environmentally-friendly and inexhaustible source of energy. 
• Remote installation monitoring by drone-based system.

Solar project should be designed for a life of 25 years. What quality parameters should mounting structures adhere to, in order to sustain over this period?  

Solar Mounting Structures are critical components in solar power plants, which support the solar panels on the ground or on rooftops. They ensure the structural stability of the solar system.

Solar panels need secure fastening to the roof or ground to protect against high velocity winds. Moreover, solar panels also require protection against water logging and other elements that gather on the ground or on the roof. Mounting structures must adhere to adverse environment conditions. 

The Mounting structure shall be so designed to withstand the speed for the wind zone of the location where a PV system is proposed to be installed. 

It may be ensured that the design has been certified by a recognized Lab / Institution and submit Wind Load calculation sheet to MEDA. 

Suitable fastening arrangement and grouting should be provided in order to secure the installation against the specific wind speed.

The mounting structure steel shall be as per latest IS 2062: 1992 and galvanization of the mounting structure shall be in compliance of latest IS 4759.

Structural material shall be corrosion resistant and electrolytically compatible with the materials used in the module frame, its fasteners, nuts and bolts.

Aluminium structures also can be used, particularly in rooftop installations which can withstand the wind speed of respective wind zone. 

Apart from design and selection of suitable steel grade, it is also necessary to protect the structure parts from rusting either by coating or anodization. 

Suppliers, having robust manufacturing and Coating facilities should be selected for supply of structures. 

Do We Need Stricter Product Certification Guidelines And Quality Standards For The Solar Sector?

Yes, off course. As I said earlier, there is tremendous pressure on the cost of the projects. So, wherever possible, component manufacturers would try to optimize the cost. 

Therefore, in order to ensure the desired Quality of the components, stricter Product Certifications and Quality Standards must be implemented on all critical equipment, like PV Modules, Transformer, Inverters, Cable, Panels, Module Mounting Structures etc. 

Inspection and Testing must be ensured at factory before these components are shipped to sites. 

As we know that PV module being most expensive and critical items in the PV Plant, so special focus must be given on selection and qualification of module suppliers through review of IEC / BIS certificates, factory audits, close monitoring of quality parameters during production and pre-shipment inspection according to relevant standards.  

In order to ensure reliability of PV Modules, sequential testing methods need to be incorporated.

List some of the challenges you come across while developing a project?  

Despite tremendous efforts from Government to promote Clean Energy in India, Solar industry has been facing a lot of barriers, like: 

Training and development of human resources to drive industry growth and PV adoption. 

The lack of closer industry-government cooperation for the technology to achieve scale.

Land allotment & PPA signing is a long procedure under the Generation Based Incentive scheme. 

Lack of better financing infrastructure, models and arrangements. 

Lack of collaborative, focused and goals driven R&D to help India attain technology leadership. 

Domestic manufacturing failed to take advantage of Safe-Guard import duty imposed on PV Solar Modules, even after one year of imposition.  Government should consider some other way-out in order to help the domestic Solar manufacturing sector. 

There is a need for more promotional incentives by Government and better industry-government co-operation in order to give a further push the Solar Industry in India.  

• Give us a glimpse about your company presence and offering in the solar sector?
• Kalpa Power is an end to end solution provider of solar power plant projects. Kalpa prides itself in being able to develop solutions which are highly customised, user oriented and seek to maximize benefits through cost effective technology deployment with least operational overheads. Our team of experienced professionals make sure installations across India occur seamlessly at the same high standards ascribed by us to achieve maximum benefits from any given locations. We have achieved a capacity of 16 + MW in solar generation across India and have another 15 MW in India and 3 MW in West Asia in the pipeline.  We are in the business of solar power for the last 5 years and have the necessary experience and expertise in Design, Procurement of quality products and project execution, along with an excellent Finance and Administrative teams which manages the day to day operation and fund requirement of the company. This results in making timely project execution and commissioning. Apart from EPC team, we also have strong Operation and Maintenance team which ensures proper monitoring of installed solar power plant and aims for zero break down, by having real time monitoring system as every single unit generation from solar power plant count

Where do you see your Kalpa Power 10 years from now?

 Without subsidies, in 2016, globally solar became more competitive than the coal based or thermal power plants. Since then, the solar prices have come down substantially. In 2012, less than 10% of the annual capacity added in the world came from solar. Last year, it was over 25%. Hence there are huge growth opportunities. You have got a situation where the market is projected to grow fast and by 2022 , approximately 2% to 3% of the electricity will be generated by solar globally. The opportunity over the next 10 years is immense because this number will have to go up and become a substantial number for the world energy market.  As we are expanding our operation on a global level, alongwith current projects in pipeline we are optimistic we can make a remarkable achievement in the field of Renewable energy globally in the next 10 years. We have cumulative target of 50 MW in next 2-3 years.

Taking forward our knowledge and expertise in solar, we are venturing into solar powered Electric Vehicle supply equipment (EVSE). Traditional electricity sourced from conventional sources is expensive, and losses are high to convert electricity from AC to the required standards for EVSE for charging. Hence solar and EVSE are a natural fit. We’ve already received an EoI from large corporate and government entities in this regard. We have started development in this sector by designing and manufacturing of efficient smart chargers for electric vehicles which are expected to hit the market by the end of FY 2019 or by early FY 2020.  

What are the key drivers of growth in the solar rooftop segments?

Solar power provides a decentralized option to address growing power needs of a vast-expansive country like India. Kalpa power envisions to fulfill the needs of the country by providing cheap and affordable power. Solar power can be designed to size so as to meet the needs and requirements of the urban as well as the rural people of India by providing independence from foreign sources of energy, thus enabling stable energy prices for the future. Increasing the supply of renewable energy would allow us to replace carbon-intensive energy sources and significantly reduce India’s total CO2 emissions.

High energy cost and tariffs usually affects the operating margins of many manufacturers, industry and commercial complexes. Green and clean energy being a prime objective and step towards sustainable development, has been a major key drivers in the solar rooftop segments. This initiative is taken by many leading industries. Another key driver for growth is net metering policy, which encourages end consumer to take benefit of excess generation from solar power plant.

How has GST impacted solar rooftop industry in India?

GST has indeed made an impact on capital cost of solar project. According to a recent study published by the Council on Energy, Environment and Water(CEEW) and the International Institute for Sustainable Development (IISD), the introduction of GST has led to an increase in cost of generation of solar power by almost 6 per cent. The current GST structure discourages a potential client to go for solar . With the government aiming for ambitious target of 100 GW  and with current market scenario GST for solar need a relook from government. If you observe last three quarters, capacity addition of solar project have been declining. Cut down of GST on Solar rooftop should be major objective of MNRE, that will boost up solar capacity addition. It is important to continuously monitor and examine if fiscal measures are being effectively wielded, to support India’s larger national objectives with implications for sustainable development. The introduction of the safeguard duty on solar panels has compounded the uncertainty, resulting in delays in deployment of solar projects. Combined with the imposition of safeguard duty (making majority of the PV panels used expensive) and the cap on solar power tariffs, the GST impact may have a bearing on the profitability of companies in this sector.

What according to you is the biggest strength of Hero Future Energies in the solar sector?

Hero Future Energies (HFE) is the renewable energy arm of the Hero Group, which is an extremely diversified industrial conglomerate. The group’s flagship company is Hero Motocorp but we also have auto component company, finance company, electronic company, university and of course renewable energy.

We are one of India’s fastest growing renewable energy developer. The “Hero approach” of owning a renewable energy project is based on business case certainty of 25 years or more, this in turn helps to bid and build robust assets with the right HSEQ standards in a time bound manner.

How significant is energy storage for the development of solar sector?

One of the distinctive characteristics of the electric power sector is that the amount of electricity that can be generated is relatively fixed over short periods of time, although demand for electricity fluctuates throughout the day. Energy storage can assume a larger role in matching the demand and supply. At the same time, technological development, better utilization of transmission assets and rapid price reduction of other technologies like thermal storage and battery energy storage along with rapid penetration of intermittent renewable energy like solar and wind, have created a renewed demand for energy storage technologies.

Energy storage will also support buyers by supplying power during peak period along the day at competitive prices against the power from conventional sources during such period which is procured by paying premium charges.

What do you think are the untapped opportunities which needs to be explored in the solar sector?

Solar sector has evolved from being focused on heat transfer-based method of power generation to solar photovoltaic based power generation during the last decade under the JNNSM and it’s still evolving as we speak.

Thus, we see very high opportunities in the fields of domestic solar PV module manufacturing with integrated supply chain of polysilicon to PV modules instead of cells to PV modules to cater the demand of both domestic and international market (100+ GW per annum).

Technological development in battery-based energy storage system clubbed with solar/ wind energy generation has huge potential in the coming years. A shift to green alternative will be attractive as compared to conventional power based on pricing.

India has ~ 36 GW of installed wind capacity. Most of these farms also happen to be in high solar insolation zones and if proper hybridization is done even to the 50% (i.e., 18 GW) of such installed capacity along with solar and energy storage solutions, it will result in better utilization of existing transmission systems along with increase in capacity utilization factor and reduction in variability of power from renewable sources. Also, it means that about 18 GW capacity can be added in a short span of 1 year to the country’s overall renewable target.

A lot has been done to improve the policy and regulatory framework for the sector. What are the problems that persist with in the sector?

In FY18 capacity addition in renewables was 2.5 times the capacity addition in conventional energy generation during the same period. This sector has seen numerous off takers in the bids conducted by SECI, NTPC, MSEDCL, GUVNL and other nodal agencies during second half of 2018 and so far in the first half of 2019, thus we expect considerable capacity addition in the years ahead.

This wave of optimism coupled with strong regulatory framework is the need of the hour. However, challenges to be dealt includes outstanding overdues with DISCOMs, slower augmentation of transmission infrastructure, threatening and challenging the sanctity of long-term power purchase agreements by state government, uncertainty of waiver of transmission charges beyond March 2022 etc.

Additionally, to spur investment in this sector few more challenges namely mismatch in timelines of solar projects, deemed non-agricultural conversion of land for use in solar projects, curtailment of power from renewable sources and non-adherence to “Must Run” status for renewable projects need to be addressed.

It is worth mentioning that union government had already taken cognisance of situation and invited RE developers in recently conducted Chintan Baithak by MNRE to address the challenges faced by the sector. Let 2019 be the time when leaders in government and business of renewables can jointly drive sectoral growth, create employment and transit towards a carbon free economy.

What more can Indian government do to propel the growth of the sector?

To improve the bankability of projects, the government should focus on the following pointers, which might seem micro in nature but is of utmost importance to gain confidence of any investor or banker.

• Development of single window clearance for all requisite approvals
• Flexibility in terms of size and timing of equity infusion
• Deemed generation compensation at 100% of applicable tariff in case of grid curtailment
• Time bound adoption of tariff discovered under tariff based competitive bidding by ERCs without any re-examination of such discovered tariff
• Timely payment to renewable generators
• Extension of financial closure and commissioning timelines for actual/ genuine delays in government approvals
• Pre-defined formula for calculating impact of new duty on cell and modules
• Increase the duration of PPAs from existing 25 years to 35 years for solar, wind and storage-based hybrid projects