'Domestic manufacturing couldn't support current solar generation growth'

Govt needs to reserve capacity to push indigenous manufacturing: Tata Power Solar

At a time when the solar power capacity addition has grown leaps and bounds, touching 10 GW in last fiscal, domestic solar cells and modules manufacturing has taken a backseat. While the government initiated some support to protect it against the flooding of cheap Chinese counterparts, the domestic industry continues to face demand glut.

In a conversation with Business Standard, Ashish Khanna, executive director and CEO of Tata Power Solar, said the domestic sector was never in a position to support the kind of growth he solar capacity addition witnessed in past 3-4 years.

“There was never a time to prepare ourselves to match the growth of solar capacity, coupled with the fact that Chinese products entered in the Indian market. They have the capacity to support any exponential and explosive growth like that happened in India,” said Khanna.

Contrasting it with Indian industry, he said, in India, it’s the other way round. “We have an explosive growth which has not taken into consideration the constraints of the manufacturing.”

Not blaming reverse bidding, Khanna said the rate at which tariffs for solar power fell was supported by low-cost Chinese equipment. However, the question over quality and costing remains. “These are aggressive bids and they (project developers) are taking aggressive steps. None of them has bid for the projects to not build them; they are serious about these projects. What can go wrong is if their projections are positioning towards module in their costing and it doesn’t come true,” he said.

Quoting international reports, Khanna revealed that one out of five companies in China is going off the radar every year. “So there is a possibility that all five of them go off radar in 5 years. Where will you catch them?” The solar module typically comes with a performance commitment of 25 years.

He added, “This particular country (China) has added close to 5.5 GW in our explosive growth of 10 GW. Now, we are going to add 100 GW. So we have to be conscious of what legacy we are building on,” said Khanna.

Tata Power Solar has a manufacturing facility of 300 MW cells & 400 MW modules. Khanna said the domestic industry will grow with the demand which needs to be reserved. “If we can reserve rooftop only for Indian manufacturers and with quality standards, you have a self-sustainable business model. Thus, when the rooftop industry would grow, the domestic solar sector would also grow with it. We need to be encouraged by policy. Of the 100 GW solar capacity target by 2022, 40 GW is the rooftop. But the target of 40 GW is not important, acceptance of rooftop and quality of equipment is,” said Khanna. He said strict quality standard would keep out domestic and imported inferior equipment.

Tata Power Solar has executed 605 MW of projects in the utility space till date, out of this rooftop projects are 140 MW. It has commissioned 305 MW of utility scale projects in FY 2017, earning a revenue of Rs 2,262 crore.

Khanna added, similarly, the government should also encourage solar based irrigation pump solutions without the subsidy model. “We have to invest in technology so that there is no need for subsidy. Then, you will have a long lasting solution for power needs,” he said.

Tata Power Solar, India's largest integrated solar company, is also the oldest solar manufacturer in the country with a legacy of 27 years.