“Staying ahead on the innovation curve”

Interview with First Solar, India’s Sujoy Ghosh

First Solar, a leading thin-film solar manufacturer, has steadily grown its presence in India. It is now also broadening its exposure in the segment by developing solar power projects. Excerpts from a recent interview with Sujoy Ghosh, country head, First Solar, India….

What are the key emerging trends and opportunities in the Indian solar power industry?

The solar industry continues to scale up capacity as the demand for solar energy grows with declining tariffs. While in 2016 the rooftop segment attracted significant investor interest, in 2017, the utility-scale PV segment will witness high growth, driven primarily by strong policy initiatives like renewable purchase obligations and solar parks. Another area that is expected to create demand is decentralised and distributed generation projects.

How has the policy and regulatory environment changed over time? What are the key issues that need to be resolved?

Central regulations and policies have been extremely favourable for increasing the penetration of renewables. With the execution of the nationally determined contributions in 2016 as a part of India’s COP21 commitments, the government has indicated a clear path and commitment to a low-carbon-energy future. However, given the federal structure and the fact that power is a concurrent topic, the alignment of state governments with this objective is important as the states are the largest consumers of power. Therefore, the number one priority is to improve the financial health of state utilities such that they have the capacity to pay for the energy they procure through long-term power purchase agreements (PPAs). Unless this happens and financially sustainable demand is created, the addition of any form of generation capacity would potentially remain a high risk to investors. In addition, creating and implementing true market-driven power tariffs is very important for attracting fresh investments in generation.

The segment is unlikely to meet its capacity addition target for 2016-17. What are your views on this? How much capacity is likely to be added during the year?

The stakeholders did an excellent job of allocating new capacity in 2016. However, the implementation of such large-scale projects in 12 months from the signing of PPAs is not an ideal timeline, given the constraints in land acquisition/conversion, and transmission connectivity permits. Therefore, 18-20 months from the time of executing PPAs would be more realistic.

How has First Solar’s journey in India evolved since its entry into this market? What have been its key achievements over the past year?

First Solar continues to broaden its value chain in the Indian market. While we began as a module supplier in 2011, today we have the capacity and capability to develop, finance and operate utility-scale PV assets against long-term PPAs. Specifically in 2016, the company achieved an important milestone of shipping/installing over 1 GW of its CdTe thin-film modules, making it one of the top three PV module companies to do so in India. It also completed the successful commissioning of 180 MW of its self-developed projects (in Telangana and Andhra Pradesh), taking its total operating asset portfolio to 200 MWac till date.

How is First Solar’s project portfolio distributed geographically? What has been the project development experience in various states?

Our operating assets are in Andhra Pradesh and Telangana and we have 60 MWac of projects under development in Karnataka. Our experience so far has been positive, especially with regard to the land acquisition and permitting processes in Andhra Pradesh and Telangana. However, we do feel that there is scope to further streamline the process of transmission permits. The state transmission utilities need to be in sync with the capacity expansion plans and optimise their approvals and permitting procedures to  be aligned with the fact that solar projects take far less time to be constructed as compared to thermal or wind projects.

What is your view on the growing competition faced by thin-film technology from crystalline technology? What are First Solar’s strategies to deal with it?

The single biggest challenge we face from polycrystalline silicon module manufacturers is their overcapacity and consequent tactics to resort to dumping in certain markets. Our response has always been to stay ahead on the innovation curve and improve the reliability and energy yield of our CdTe thin-film modules to deliver lower life cycle costs to our clients. Thin-film technology inherently has a lower cost structure when it comes to manufacturing, given that the entire upstream polysilicon/ ingots and wafer process is not required. However, recently there has been more pressure on polysilicon module prices due to the demand-supply imbalances in its value chain as compared to any technology innovation. In the long run, we see CdTe thin-film technology being in a position to lower the LCoE for customers, especially in hot and humid climates.


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