India’s impressive solar power growth has so far hinged on imports of solar cells and modules. However, as the country moves closer to achieving its renewable energy ambitions, there is a major government focus on Make in India projects. In light of this, solar manufacturing has emerged as an attractive opportunity for not just established domestic manufacturers but also for players planning to foray into this space. Industry major Reliance Industries Limited (RIL) is focusing strongly on this segment as well as on storage and green hydrogen. Dr Milind Kulkarni, President, PV Manufacturing, RIL, spoke to Renewable Watch about the company’s plans in the solar manufacturing space, the key technology advancements and the future outlook. Excerpts…
What have been the major highs and lows for the company in the renewable energy sector over the past one year?
I would not describe our journey in the past one year in terms of highs and lows. We have made a strategic decision to set up a unique integrated solar manufacturing ecosystem, from quartz to modules, to complement our overall renewable energy goals. We are living through an energy revolution. Therefore, these are exciting times for all stakeholders in this sector. Reliance, with its rich history and diverse resources, has an opportunity and responsibility to be a leader in this sector in India as well as overseas. We have developed a strategic plan and are in the process of executing it. The key to executing our strategy was to develop key technical and strategic partnerships and collaborations. We have acquired or invested in key companies working on cutting-edge technologies, developed a clear road map, and are executing our ambitious solar plans.
RIL has made a series of announcements with regard to expanding its solar manufacturing capacity. What are the company’s short- and long-term targets?
Everything we do in the short term is to achieve our strategic long-term goals. Our long-term goals are clear. We want to be a leading renewable energy player in the world with a strong manufacturing base in India. We want to support India’s goal of net zero by 2070 by achieving it well in advance by 2035, at the company level. We also aim to have 100 GW of installed solar capacity by 2030. In manufacturing, we will start with 10 GW module and cell capacity in 2024 and expand it to 20 GW by 2026. This will be complemented by backward integration to crystal growth and wafering, polysilicon, MGSi and quartz. It will be a unique business proposition with the company having complete vertical integration not just in the silicon products value chain, from quartz to modules, but also in the supporting ecosystem that includes glass, aluminium, and POE. Skill acquisition and development will be an important area. We are already working on bringing the right talent into the company while we work on local skill development.
How have the Russia-Ukraine conflict and the current global inflationary tendencies impacted your operations and approach?
At the strategic level, there has been no impact of this war, as we believe our strategy is robust and is part of meeting both India’s and global clean energy needs. However, the war has impacted the global economy and there is a significant slowdown. Many countries may even see recessions. Commodity prices have increased but we expect them to come down in the future. All companies, including Reliance, will have to deal with these problems and we will make necessary tactical adjustments, without impacting our strategic imperative or project timelines.
In solar photovoltaic, which technologies is the company focusing on? Which technologies in your view have the most potential to grow?
In short, solar energy has become commercially attractive on the back of modified semiconductor polysilicon, crystal and wafer processing technologies, complemented by the emergence of efficient cell technologies founded on unit operations well-established in the semiconductor industry. This has led to a rapid reduction in the cost of solar energy. This reduction will continue in the next five years and beyond. Hence, a strategically accurate cost and performance road map for the solar segment can be developed for the next five-year horizon.
In polysilicon, we have adopted the Siemens technology platform. In crystal growth, it is the recharge Czochralski platform. Diamond coated wire (DCW) slicing is the industry standard for slicing the crystals and we are adopting the state-of-the-art DCW technologies. There is still significant cost and productivity improvement possible on these platforms, which requires both continuous development and innovative research. We aim to nurture the essential innovative culture to differentiate on these platforms. We have also invested in direct wafer technology that allows the production of single crystal silicon wafer by eliminating many unit operations, from polysilicon deposition to crystal slicing. For cells and modules, our view is clear. High efficiency technologies that offer the lowest levelized cost of energy will gain market share. Both heterojunction (HJT) and TOPCon platforms will gain market share. We have chosen the HJT platform for implementation, as it offers an attractive road map for all energy generation sectors – utility-scale, C&I and rooftop solar. The most promising future technologies include perovskites and silicon perovskite tandems. The HJT platform fits nicely in the tandem architecture. There are other proprietary technologies also that we are considering.
While these technologies will reduce the cost of producing DC electricity, it is necessary to have effective and efficient energy storage solutions. We have made strategic investments in various energy storage technologies. Energy storage is an integral part of the solar ecosystem.
What is your take on the current solar power prices?
The cost of solar modules will continue to decrease because of continuous improvements and new technology platforms. The current solar power prices are higher because of a temporary increase in polysilicon prices resulting from supply shortage and other supply chain issues. This situation is not going to last forever. Significant new polysilicon production capacity is expected to come up in the next few years and polysilicon prices will come down significantly. Even with the current module prices, the solar bid tariffs are holding at Rs 2.50-Rs 2.60 per kWh. In the future, we can see these prices come down to historical lows close to Rs 2 per kWh. After polysilicon prices stabilise (they will start decreasing from next year), wafer prices will reduce, in turn, bringing down module prices. We should expect solar bid tariffs to decrease. Over a period of time, when India achieves scale and efficiency, these prices will be significantly lower, at or well below Rs 1.50 per unit. BOS cost, the cost of land, and the cost of capital need to improve along with module costs for this to happen. We have already seen solar power prices at this level in some parts of the world supported by a very low cost of capital and attractive government policies. What I am suggesting is that in many low-cost countries, these tariffs can be realised even with a reasonable cost of capital and minimal policy support. However, this will take time.
Despite the recent policy push from the government, which aspects of solar manufacturing policies are currently acting as constraints to growth? What policy changes would you recommend to overcome the constraints?
Government policies have played a major role in accelerating activity in the solar segment. The first tranche of the production-linked incentive (PLI) scheme focused on integrated solar activity from polysilicon to modules. The second tranche is more balanced and supports various levels of integration. India will take some time to achieve globally competitive costs. This long-term support can be provided by the basic customs duty, if it is maintained over a sufficiently long period. The PLI scheme complements this, I think these policies are well structured. What would be good, in addition to this, is assurance of long-term support to both big and small players as well as support to the broader solar ecosystem, beyond the vertical silicon value chain. Making available land with proper infrastructure for installation of modules will complement the manufacturing activity.
What strategic approach would you recommend to help India meet its 2030 targets?
In this industry, both scale and technology play important roles. Many new technology platforms do not mature to high volume manufacturing because state-of-the-art platforms continue to push the cost and performance boundaries using advantages of economies of scale and learning. Hence, any strategic approach should help the Indian solar segment achieve the large scale required to be globally competitive. This will take time, patience and sustained support. As mentioned earlier, support for the entire ecosystem, not just the silicon value chain, is important. It is also necessary to encourage the continuous pipeline of “concept to commercialisation” in partnership with the private sector. In order to stay competitive in the solar segment, private corporations need to execute the road map that involves continuous innovation and commercialisation of system breaking technology platforms. The government can play a role in supporting long-term solar research programmes that are not typically undertaken by private companies. For the solar manufacturing segment to thrive, it is essential that energy storage and installation costs come down. Hence, strategic support to the storage segment is very important. A plan to support the C&I and rooftop segments that are still struggling in India is critical. Achieving the 500 GW renewable energy goal by 2030 requires balanced support to the utility-scale, C&I and rooftop solar segments. This will also enable right manufacturing platforms to evolve in India.