Que: What, according to you, are the biggest operational challenges Indian solar companies are currently facing as they scale?

Ans: India’s solar manufacturers face three critical hurdles: supply chain vulnerabilities, technological lag, and policy inconsistency. Despite the PLI scheme’s INR 24,000 crore allocation, 80 percent of PV modules still rely on Chinese cells, exposing manufacturers to geopolitical risks and price volatility. Land acquisition remains a hurdle—projects often stall due to unclear titles or community pushback, inflating costs by 15–20 percent. States must adopt Rajasthan’s model: auction solar parks with pre-cleared titles, slashing project setup time by 9–12 months.

Moreover, inconsistent quality in locally produced cells forces firms to invest in costly third-party testing. Operational costs remain 20-25 percent higher than Chinese counterparts due to expensive raw materials like polysilicon and ingots, which India imports entirely.

Additionally, the ALMM list’s frequent suspensions (e.g., March 2023 and February 2024) create uncertainty, delaying project timelines. Quality control is another issue –defect rates in Indian modules exceed 8 percent, compared to China’s 3-4 percent, impacting long-term reliability.

Addressing these requires backward integration, state-led land banks, and R&D incentives to bridge the technology gap with global players. Lastly, defect rates reflect deeper R&D underinvestment—India allocates 0.3 percent of solar revenue to innovation vs. China’s 2.1 percent. Without tripling R&D budgets, quality parity is a pipe dream.

Que: Solar manufacturing is capital-intensive and the technologies keep changing fast. From Mono PERC, the industry is shifting to TOPCon. HJT and Perovskite technologies are on the horizon. How should manufacturers approach the selection of technologies?

Ans: The TOPCon vs. HJT debate mirrors India’s broader industrial dilemma: short-term pragmatism vs. long-term vision. The RBI should mandate priority-sector lending for HJT adoption, mirroring Japan’s 2000s solar push. While TOPCon offers immediate ROI, HJT’s 25-year LCOE savings (INR 0.4–0.5/kWh) could redefine energy economics. Yet, manufacturers lack access to low-interest green bonds (<6 percent) to fund CapEx. With PERC (60 percent market share) giving way to TOPCon (25 percent efficiency) and HJT (26 percent+), manufacturers must balance current ROI with future readiness.

I would advise a phased approach: adopt TOPCon for its 1-2 percent efficiency gain over PERC and compatibility with existing infrastructure, while investing in HJT R&D for 2026–30 scalability. For instance, TOPCon’s 18-month payback period suits firms targeting utility-scale projects, while HJT’s higher upfront costs align with premium rooftop markets.

We also conduct granular TCO analysis, factoring in regional subsidies and labour adaptability. Due diligence involves assessing energy yield projections, Capex (INR 4-5 crore/MW for TOPCon vs. INR 3.5 crore/MW for PERC), and degradation rates. Independent audits, like DNV’s technical evaluations, mitigate risks by validating plant designs and component reliability. Recently, a Tamil Nadu-based client avoided an INR 50 crore misstep by pivoting from perovskite R&D to TOPCon, leveraging PLI incentives for immediate scale.

Que: What are some of the most common gaps in sales or operational efficiency plaguing Indian solar manufacturers?

Ans: Indian manufacturers often lack data-driven sales strategies and struggle with inventory turnover (45 days vs. global 30-day benchmarks). Operational inefficiencies, such as underutilised capacity (60-70 percent vs. China’s 90 percent), stem from fragmented supply chains and poor workforce training.

SECI’s 12–18-month bidding cycles force manufacturers to overproduce, fearing order droughts. A national solar exchange, akin to power trading platforms, could match real-time demand, cutting inventory costs by INR 800–1,000 crore annually. For example, 22 percent of defects trace back to untrained cell handlers.

We address these through digital twin simulations, which optimise production layouts, and AI-driven CRM tools that boost lead conversion by 25-30 percent. One Gujarat-based client held INR 18 crore excess stock of Tier-2 modules, unaware that developers now mandate Tier-1 for SECI bids. Through digital twin simulations, we rebalanced their production mix, aligning 80 percent capacity to Tier-1 and dedicating 20 percent to O&M spares, boosting utilisation to 85 percent. Operational tweaks, like predictive maintenance, cut downtime by 30 percent.

Que: Though domestic solar manufacturers enjoy protection from global players with ALMM and Custom Duty, still cost optimisation is key to sustainable business growth. What are the aspects solar farms need to look into?

Ans: Vertical integration is overhyped without scale. A 500 MW solar farm saves 18 percent via in-house EVA sheets, but SMEs lack capital. Domestic manufacturers must reduce reliance on Chinese ethylene-vinyl acetate (EVA) sheets, which still account for 70 percent of inputs (ICRA, 2023). Backward integration into encapsulant production, coupled with robotic automation, can lower labour costs by 25 percent.

We advised a PLI beneficiary to repurpose 30 percent of Capex towards local EVA manufacturing, slashing logistics costs by INR 7.5 crore annually. Prioritise vertical integration – Tata Power’s 4 GW cell/module facility reduced costs by 18 percent through in-house production. Leverage PLI incentives (INR 6/Watt for integrated units) and adopt TOPCon to lower LCOE (INR 2.4/kWh vs. PERC’s INR 2.6).

Our Lean Six Sigma frameworks have helped clients cut material waste by 15 percent via predictive maintenance and just-in-time inventory. Cluster manufacturing—10 firms pooling INR 500 crore for shared encapsulant plants—could democratise savings. Also, India’s INR 2.4/kWh tariff is a mirage; hidden costs (grid balancing, land) add INR 0.8/kWh. Transparent auctions with “true cost” benchmarks would force innovation, not just undercutting.

Que: How do you see the potential of niche solar markets for emerging players?

Ans: Niche markets are a double-edged sword. Agri-solar’s 15 percent yield boost sounds lucrative until land leases spike 300 percent post-success. SMEs should adopt cooperative models—let farmers own 10–15 percent equity, aligning long-term interests.

BIPV’s growth hinges on urban bylaws; Mumbai’s revised FSI norms (extra 0.5 for solar integration) show the way. Emerging farms in Karnataka are tapping Agri-solar markets, offering farmers 15–20 percent higher yields through microclimate optimisation (CEEW, 2023). Others target commercial complexes with Building-Integrated PV (BIPV), an INR 3,200 crore niche growing at 22 percent CAGR. Strategic alliances—like a Punjab SME partnering with a drone startup for panel cleaning—can also enhance margins.

Que: The lack of skilled manpower in the renewable energy sector is another challenge. How do you think companies should address the issue?

Ans: The “skilled worker” deficit is a misnomer—India has a surplus of engineers, but curricula ignore solar’s interdisciplinary needs. AICTE must mandate “Solar MBAs” blending tech, finance, and policy. Germany’s dual-training model won’t scale here without wage subsidies: INR 15,000/month stipends for apprentices could attract talent. A one percent GST cess on module sales could generate INR 320 crore/year for NSDC-led upskilling, turning semi-skilled labour into an asset, not a liability. NSDC estimates a 300,000-worker deficit by 2030, particularly in high-tech roles like cell line operators.

Leading firms are adopting Germany’s dual-training model: Rajasthan’s Adani Solar Academy partners with ITIs to offer 6-month apprenticeships, reducing onboarding time by 40 percent. Upskilling existing staff is equally vital—we helped a Maharashtra manufacturer reduce module rejection rates from 9 percent to 3 percent via AI-driven quality control training.

India’s renewable sector faces a 1.2 million skilled worker deficit. Bridging this requires:

● Upskilling: Partnering with NSDC to certify 50,000 technicians annually in module assembly and BOS installation.
● Academic tie-ups: IITs and NITs introducing TOPCon/HJT-focused curricula.
● In-house training: Maruti Suzuki’s model, training 10,000 EV technicians, can be replicated for solar.

Lastly, stop glorifying “jugaad”. Precision manufacturing demands cultural rewiring—celebrate SOPs, not shortcuts.