Historically, India has been largely dependent on imported solar modules. However, the Indian solar industry suffered from significant supply chain issues owing to the Covid-induced lockdown. This has highlighted the need for a domestic manufacturing base. Vikram Solar, a leading domestic solar photovoltaic (PV) module manufacturer, has been pushing for the expansion of India’s solar manufacturing capacity in recent years and is set to significantly increase its manufacturing capacity supported by government policies. In an interview with Renewable Watch, Saibaba Vutukuri, Vikram Solar’s chief executive officer, talked about the company’s current state of operations and the additional efforts that the government could make to promote domestic manufacturing. Excerpts…
What is Vikram Solar’s overall portfolio across the various segments it operates in? How has the past year been for the company?
Vikram Solar has continued to stay true to its mission of creating a climate for change and increasing solar adoption across the globe. With a 1,355 MW engineering, procurement and construction portfolio, 1.2 GW of manufacturing capacity, a 660 MW operations and maintenance (O&M) portfolio, and a presence spanning six continents, we are well poised to capitalise on the opportunities available in both the domestic and international markets. The year 2021 also marks 15 years of Vikram Solar delivering excellence, and we stand ready to write the next chapter in the solar revolution. We have shouldered utility-scale projects such as a 200 MW project for the Andhra Pradesh Power Generation Corporation, a 140 MW project for NTPC Limited in Uttar Pradesh, a 130 MW project for NTPC Limited at Bhadla (Rajasthan) and an 80 MW project for Gujarat Industries Power Company Limited at Charanka (Gujarat). We have given India many firsts, such as its first floating solar plant and its largest rooftop airport solar plant, thus creating an impressive portfolio.
There was an estimated 30 per cent fall in electricity demand in the country from mid-April to May 2020 due to the impact of the lockdown on industrial and commercial establishments. This has adversely impacted the revenues and cash collections of power discoms. Further, as a result of the manufacturing contraction in China, the solar segment witnessed temporary supply chain disruptions, a slowdown in project execution, reduced manpower availability, payment delays from government agencies impacting cash flows, etc. Input costs for materials such as glass, backsheets and aluminium frames for modules have also risen significantly. The price of solar glass has increased by 100-130 per cent in the past three to four months. However, the government has focused its attention on boosting domestic manufacturing through policy interventions such as supporting force majeure, reducing the repo rate, extending the deadline for enlistment in the Approved List of Models and Manufacturers, making solar plant O&M an essential service, and offering performance-linked incentives to solar manufacturers. Aligning with the government’s vision of Atmanirbhar Bharat and “vocal for local”, we took another step towards manufacturing capacity expansion. Vikram Solar signed an MoU with the Tamil Nadu government to set up a 3 GW integrated solar manufacturing facility in the state, including wafer, cell and module manufacturing, over a period of five years.
At Vikram Solar, we fast-tracked our digitalisation and automation plans to uphold our commitment to quality and customer-centricity. As a domestic solar manufacturer, we are certain that with continued support from the government, we will see more opportunities for growth in 2021.
What are the key trends in PV technologies?
The global demand for solar modules is expected to rise from 121 GW to over 135 GW in 2021. Today, polycrystalline solar panels have an efficiency range of 16-18 per cent. With monocrystalline panels offering up to 24 per cent efficiency using the passivated emitter and rear cell (PERC) technique, it is easy to say that monocrystalline panels will claim a larger market demand in the next few years in India and the world. During 2021, the global demand for p-type mono PERC modules is expected to grow from 89 GW to 110 GW, pushing the market share to a new high of 80 per cent.
At present, Tier 1 cell and module manufacturers are actively promoting bifacial modules, and the test results seem promising for end users. Projections show that annual global bifacial module capacity will exceed 21 GW by 2024, accounting for 17.2 per cent of the total installed capacity in that year and quadrupling the share of bifacial solar from that in 2019. A wider understanding of the fact that PV modules made of large wafers, such as the M6 format, could reduce the capex of a utility-scale solar project, will result in a consistent rise in demand for larger cell-based modules. Predictions show that the total module manufacturing capacity of M6 wafer-based modules will reach 28-30 GW globally by the end of 2021.
What technologies is the company planning to focus on in the near term? In which areas has the company been concentrating its R&D and innovation efforts?
Technology and innovation are the bedrocks of our business. Further, we are embracing new-age technologies such as artificial intelligence, cognitive modelling, machine learning, deep learning, virtual reality, augmented reality, and robotic process automation to enhance our agility and efficiency in operations. Bringing down the levellised cost of energy is at the heart of the design and manufacture of our products.
Vikram Solar began 2021 with the launch of the Series 6 modules – Somera and Prexos – with next-generation M6 cells, which are superior, advanced technology modules. These M6 cell-based modules are available in both mono and bifacial module types, with mono PERC technology and multi-busbars features. The new Series 6 modules will provide a higher power output of up to 505 Wp, with over 21 per cent efficiency. These modules are also cost effective as they reduce the overall project cost and increase project-level cost savings. Further, in the last couple of years, we have introduced the monocrystalline module SOMERA, the smart module SOLIVO, high efficiency multi-busbar half-cell modules, and the first bifacial PV modules, along with a half-cell module series.
Our R&D team conducts collaborative research programmes with leading laboratories such as the National Solar Energy Institute, France, and the University of New South Wales, Australia. Our current solar technology innovations for modules are focused on offering excellent low-light performance, performance guaranteed in partial shadow, reduction in hotspot temperatures, better microcrack tolerance, reduced power loss, design using circular ribbons, and high-reliability features.
What is your perspective on the evolution of module prices over the years? How do you expect prices to change over the long term?
Module technology prices have fallen by 90 per cent in the past decade. They are expected to fall further as the pursuit for higher efficiency solar technology intensifies the solar transition process. However, to enable the transition, India needs to invest heavily in domestic solar manufacturing, solve PPA renegotiation issues and create in-house R&D facilities. Offering deductions as R&D taxes and creating demand can also encourage manufacturers to produce globally competitive, superior technology solar products, maintain investor interest, save billions in forex outflow and speed up the green energy transition.
What are the key issues that module manufacturers face in India?
The majority of the existing solar energy capacity in India has been built on imports. One of the world’s largest glass makers is in India, but we import glass from China, Indonesia and Malaysia. Similarly, even though India is one of the largest aluminium producers in the world, we import aluminium frames. There is an immediate need to develop a robust ecosystem for indigenous solar manufacturing in order to achieve the government’s vision of Atmanirbhar Bharat and its target of 450 GW of renewables by 2030. This will have a multiplier effect on the economy in terms of creating jobs, increasing exports, saving approximately $50 billion in imports, achieving energy security and ensuring overall socio-economic development.
What are the major interventions needed to increase the scale of domestic manufacturing?
India has a solar energy potential of 1,000 GW and in the last six years it has increased its installed renewable energy capacity by two and a half times. With policy support, policy certainty and a focus on manufacturing, India can become a global manufacturing hub for clean technologies. We need a comprehensive policy framework, encompassing both tariff and non-tariff barriers, long-term financial support and direct incentives to make the domestic solar industry cost competitive. The finance ministry should consider a 5 per cent interest subvention on term loans and working capital, and an upfront central financial assistance of 30 per cent on capex, while also increasing the export incentive from 2 per cent to 8 per cent under Remission of Duties or Taxes on Export Products, which will aid indigenous solar manufacturing.
Further, there is a need for expeditiously implementing basic customs duty with an exemption for special economic zone-based solar manufacturers. We believe this will not only encourage economic recovery amidst the pandemic, but will also provide an enabling ecosystem to make India a global manufacturing hub for solar.