With near-buoyancy in solar power development, solar photovoltaic (PV) manufacturers have been gearing up for a spike in demand for quality products made domestically. The challenge to most such manufacturers come from Chinese PV units that are cheaper.
FE’s Sumit Jha spoke to Gyanesh Chaudhary, CEO and MD, Vikram Solar, on the solar market and the company’s plans. Excerpts:
Does solar power generation carry an inherent risk of being unaffordable, considering the poor state of discoms?
Every business should make commercial sense and in that sense the apprehension (of solar power being hard to sell) is right. But given that the cost of solar power is coming down and its being funded all across the world, solar is likely to be a sustainable and perennial source of energy in the near future.
Since Vikram Solar manufactures PV modules and takes up installation (EPC), what kind of cost advantage/disadvantage you face vis a vis PV modules made abroad, especially in China?
I don’t think we are more expensive than comparable products manufactured anywhere in the world. The module is 70% of the cost of a project and is the heart of any installation. Our job is ensure that the modules are of high quality. As an EPC player, we are agnostic with modules and we go by consumer preference.
What is the expected cost trajectory for solar power to consumers?
The cost to consumers is now half of what it was in 2006. I do not see any major price revision taking place due to technical upgrades but some movement will happen due to business and market dynamics. Internationally, the China factor is looming large over the industry. Its going to be more about demand-supply mechanics rather than material price changes.
How has been the experience in rooftop installation? What were the hurdles in attaining scale?
We have been active in the rooftop business but its true that the scale has not yet been achieved. The scale comes only from either incentives or subsidies to consumers, and significant returns delivered to consumers. As far as the subsidy goes, the new government is not keen on subsidy-based promotion, and it wants a merit-based system to prevail. The lack of clarity on subsidy, which would make developers wait for months on end to get the subsidy, has now been done away with. The second aspect of creating value proposition for customers is being tried out through policies mandating a certain amount of solar power in the energy mix. The combination of factors is likely to deliver dividends in the coming quarters. This is just the start of rooftop solar revolution.
Will you continue to focus equally on manufacturing and EPC, going forward?
We have always maintained our strength as a hardcore manufacturer. Having said that, EPC is very vital division for us, which brings in the pipeline and also creates a position in the market of project excellence.