Interview: Neha Agrawal
Head of Corporate Strategy & Support Services at Vikram Solar
Energetica India catches up with Ms. Neha Agrawal to know her views about India's Solar Journey
June 27, 2019. By News Bureau
Que: How do you see India's solar journey over the last 10 years?
Ans: India’s solar story has witnessed quite a journey from a mere 10 MW solar capacity in 2010 to 28 GW today. Policy support, reforms, foreign investment, and worldwide acceptability of solar in recent years have all played a major part in leading the country towards this incredible success.
Government policies directed to increase the share of solar power in the country’s energy mix, coupled with falling equipment costs have aided solar growth in India. Moreover, solar power tariff in India has witnessed a drastic drop over the last decade, from INR 15 /Kwh in 2009 to INR 2.44/ Kwh; encouraging nationwide solar adoption.
Other initiatives that contribute to this upward trajectory are- solar park development policies, increased focus on Rooftop solar adoption (net-metering implementation), energy infrastructure development, RPO target improvement, and diversified investment sources amongst others. However, we must also mention that solar deployment rate has considerably reduced in 2018 and this trend is continuing in 2019 despite road bumps with 25% safeguard duty, GST, and continuous module import.
Solar energy transition promises to transform India’s energy scenario and socio-economic stature rapidly. However, for that to happen, India needs to focus and implement strategies for the long-term growth besides focusing on achieving current solar deployment targets.
Que: What kind of challenges do Indian solar panel manufacturers face in the global solar panel export market?
Ans: Although Tier 1 solar manufacturers in India offer high-quality solar equipment matching international quality standards, the primary challenge seems Chinese imports. These foreign suppliers with large manufacturing capacities, disrupt market prices and practically dump solar equipment in the international market, thus eating away Indian solar equipment demand.
Additionally, solar manufacturers in China and other countries have government subsidy support, which encourages them to sell solar equipment at cheaper rates. However, Indian manufacturers lack such backing to compete toe to toe.
In addition to that, the lack of sufficient cell manufacturing capacity in the country leads India to import solar cells. Recent safeguard duty on imported solar cells has made cells expensive, thus increasing module production cost. On the other hand, other Asian manufacturers (Taiwan, Vietnam, China) with sufficient cell manufacturing capacity can sustain at non-tariff rates and create high completion in tariff infused markets.
India needs to focus on domestic capacity expansion by offering subsidies, flexible financing options, and creating demand. It can help India in gaining large market shares abroad, earning profits, facilitating industrial growth, creating jobs, and ultimately serving India’s goal of achieving energy security.
Focusing on exports is a tried and tested way for a country to control its business growth trajectory. However, to thrive in a highly competitive global market a country needs strong domestic manufacturing capacity.
Que: What kind of role would you see Vikram Solar playing?
Ans: Vikram Solar has been at the forefront of the solar industry in India since the very inception of the sector in our country. In 2006, when Vikram Solar was incorporated, solar sector was at its infancy and there weren’t many opportunities around in the country. The Government support, flurry of policies, supportive incentives, and industrial development opportunities that we see today, didn’t exist back then. But global acceptance of solar energy was growing and weighing the benefits of solar as a renewable energy source, a decision was made to venture into this futuristic industry.
Since then the journey has been an incredible one for us!
Vikram Solar has today emerged as one of the top solar module manufacturing and EPC solutions providers in the country. By upholding values like quality, performance, and customer centricity, the company has claimed an integral position in the Indian solar industry. As one of the oldest and longest Tier 1 modules manufacturers, are commitment to quality is paramount and well reiterated. And, we appreciate Government support for our success. The Government of India has truly done an incredible job in supporting solar through policy reform, support, and infrastructure development.
Assessing the growing energy demand, we enhanced our manufacturing capacity from 500 MW to 1.1 GW (annual PV production).
Currently, we stand with 1040 MW*+ of the solar project portfolio, including 65 MW* of rooftop projects. *(Commissioned + Under execution)
Que: What changes in policies would you want to see in the industry for the 100 GW target to be met?
Ans: Domestic solar manufacturing is extremely important to reach the 100 GW target while establishing energy security, as it is the primary reason behind solar adoption. Policies supporting manufacturing, improving energy infrastructure (reducing T&D losses), land availability, flexible funding, R&D investment, skill development, and closer industry-government cooperation is required to meet 100 GW solar installation target.
We also propose the following to the Government-
• All equipment involved in the deployment of solar power plants including work contracts should be categorised under 5% GST bracket to promote solar deployment in India
• National Clean Energy Fund should be made available to solar manufacturing firms to expand their Research and Development in order to produce more cost-efficient energy solutions
• Inclusion of solar power equipment manufacturing under the priority sector lending
• A special fund should be allocated for the development of EV battery ecosystem
• Super-deductions of 200% of the R&D expenditure for new and clean solar technology development (which could be a part of the offset / Make in India arrangement) should be allowed. India already offers super-deduction of 200% of the R&D expenditure in emerging areas such as biotechnology which has led to the rapid growth of Indian biotech and pharma companies
• All equipment required in deploying Floating Solar power projects should be categorized under Concessional Customs Duty Certificate Schem
Que: How do you foresee the synergy between solar industry and the EV niche?
Ans: Global transport system burns the majority of the world’s fossil fuel and spews huge amounts of CO2 in the environment. Since the world is slowly accepting the green energy revolution as a necessity to protect the climate and add sustainability to our future, it is important to bring green energy utilization in transport systems as soon as possible.
Countries with rising acceptability and adoption rate of solar like- China, USA, Canada, Japan and the EU are showing great response in adopting EV to replace their fossil fuel powered transport system. Solar dominant countries like- China are offering Tax credits, Sales tax exemption, Circulation Tax exemptions, Rebates at registration/sale and other similar financial incentives to foster EV growth. This clearly identifies synergy between solar and EV growth.
This presents a great opportunity for India, as a third of PM (particulate matter) pollution in India comes from transportation sources. Focusing on EV market growth depending on renewable energy (especially solar) would help India save billions of Forex outflow, reduce dependency on fossil fuels, and curb pollution.
Acknowledging this need, states in India are showing interest by releasing state policies conducive to EV growth. Currently, National Storage Mission of the Government aims to bring all applications of energy storage systems under one umbrella. This also includes policies for electric vehicles (such as, Faster Adoption and Manufacturing of e-vehicles or FAME), which is becoming popular as the price of Li-ion technology slides down further.
These developments paint a clear picture showing solar and EV completing the circle of sustainability while protecting the climate.
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