Interview with Gyanesh Chaudhary: “India is expected to play a larger role in the global supply chain”

“India is expected to play a larger role in the global supply chain”


Gyanesh Chaudhary, Vice-Chairman and Managing Director, Vikram Solar

The Indian solar manufacturing segment has received a significant boost in recent months with the launch of the second auction under the Production-Linked Incentive (PLI) scheme, the imposition of basic customs duty (BCD) and the revision of the Approved List of Models and Manufacturers (ALMM). Against this backdrop, Gyanesh Chaudhary, Vice-Chairman and Managing Director, Vikram Solar, talks about the key achievements and plans for his company as well as his views on the solar manufacturing industry…

What have been the key highs and lows in the solar segment in the past year?

The Government of India under the leadership of Prime Minister Narendra Modi has accelerated the transition to clean energy with solar adoption. This is evident from the achievement of the COP21 target of 40 per cent renewables by 2030 nine years ahead of schedule. Solar has been at the forefront of the transformation of India’s rene­wable energy landscape. India ranks fifth globally in terms of solar power dep­loyment and is am­ongst the lowest-cost producer of solar energy.

As India’s green energy sector moves forward with incredible strides, the reforms undertaken in this sector have paved the path towards a clean energy future. India’s total installed renewable energy capacity has doubled in the last five years. Although close to 60 per cent of India’s power sector is controlled by fossil fuels, it is quickly moving towards renewables. Investment in the country’s renewable energy sector grew more than 125 per cent year on year to touch a record $14.5 billion in FY2022. In 2021, India added a record capacity of 10 GW in solar, a 200 per cent growth from 2020, and in 2022, it has already crossed 11 GW of capacity installation in the first nine months of the year. Currently, India has 60.8 GW of installed solar capacity.

The support allocation in tranche two of the PLI scheme, the ALMM and BCD on solar cells and modules have renewed focus on the Aatmanir­bhar Bharat scheme. Meanwhile, the announcement of the net-zero emission target by 2070 and the enhancement of the renewable energy target to 500 GW by 2030 at COP26 have given the industry a big leg-up.

The growth is primarily being led by the solar utilities sector, which is currently at 85 per cent of its target. Although rooftop solar has only ac­hie­ved 18.8 per cent or 7.5 GW of its goal, with new initiatives such as the national roof­top solar portal, better results are under way. How­­ever, ch­allen­ges like solar imports, lack of clarity in po­licies, un­­availability of flexible fi­nan­cing and de­lays in the disbursal of subsidies remain. With con­tinued fo­cus on Aatma­nir­bhar Bharat initiatives, policy re­forms and leadership in climate action conversations (at the Conference of Parties), India is ex­pected to show incredible growth.

What have been the key achievements for the company over the past year?

We are one of India’s largest domestic solar PV module manufacturers with an operational capa­city of 3.5 GW. Our expansion plans are driven by the expected growth in demand (both domestic and international) and the government’s target of 280 GW of solar capacity by 2030.

We claimed a 19 per cent share in India (by manufacturing capacity) and won the PVEL top performer mantle five times in the past six years. We introduced advanced monocrystalline PERC M10 cell modules in the market. This year, we also received 350 MW of solar module supply orders in the US. We maintained our position as one of the top five EPC players in India by ins­talled base and maintained a presence across 32 countries. We also commissioned a 56 MW solar plant for NTPC Limited at Kawas, Gujarat. The project is unique, with a combination of a 31 MW ground-mounted solar plant and a 25 MW floating solar plant. We continued to strengthen our retail presence. Our robust distribution network connects more than 40 cities, ensuring the availability of solar pro­ducts and solutions ac­ross over 600 locations in India.

What is your perspective on the government’s recent Make in India policy?

The target of 500 GW of renewable energy by 2030 and India’s net-zero emission target by 2070 announced at COP26 bring incredible new opportunities for green en­ergy growth. Over 60 per cent of this 500 GW target capacity, that is, 280 GW would come from solar. Considering India currently has about 60 GW of solar installations, we need to install 25-30 GW of solar energy per year over the next eight years.

A key enabler to achieve this target is to scale up and build a robust domestic re­ne­wable energy manufacturing ecosystem. This will have a multiplier effect on the economy in terms of creating jobs, in­creasing exports, attracting investments, upgrading technology, and ensuring energy security. The government’s consistent and focused policy initiatives to strengthen India’s renewable energy manufacturing sector, boost the domestic solar eco­system and reduce import dependence will accelerate the clean energy transition. The PLI scheme, the BCD on solar modules and cells and the ALMM, amongst other such policy initiatives, are a testament of the government’s resolve to boost domestic solar manufacturing.

Which technologies will you be focusing on in the near future?

Solar technology in India is evolving rapidly owing to the acceptability of bifacial modules, higher Wp modules with larger cells, advanced cell modules offering lower LCOE, and a consistent fall in prices due to technology growth and increased demand.

As one of India’s largest domestic solar manufacturer with capacity of 3.5 GW, we continue to invest in R&D and introduce next-gen technologies in the market. At Vik­ram Solar, we are currently working on de­veloping solar PV modules with higher efficiencies using cell types such as PERC, bifacial, Tunnel Oxide Passivated Contact (TOPCON). TOPCON is a further higher effi­ciency technology which is naturally bi­fa­cial and superior in performance to the existing technologies. We intend to continue to invest in R&D and obtain product certifications to offer the latest and most efficient products and services to customers.

What are your expansion plans in the short and long terms?

Our expansion plans are driven by the ex­pected growth in demand (both domestic and international) and the government’s target of 280 GW of solar capacity by 2030. We plan to enhance our manufacturing ca­pacity to 4.5 GW by H1 2023. This will be substantially enhanced to a higher integrated capacity aligned to the new PLI scheme.

What are the challenges and solutions in solar domestic manufacturing?

According to IEEFA, India is expected to install close to 20 GW in 2023, the highest ever to be installed in a year. With sche­mes and initiatives such as PLI, BCD, ALMM, and the focus on green hydrogen, which will require 26-30 GW of solar capacity to produce 1 million tonnes per year of green hydrogen, solar is going to be the centrepiece of future energy technologies.

The policy impetus by the government augurs well for the growth of the renewable energy sector. The policy interventi­o­ns should continue to focus on eliminating the following challenges:

  • Continued solar imports (80-90 per cent still imported and $3.2 billion in 2021-22)
  • Expensive raw material (50 per cent price rise in domestic panels)
  • Hike in shipping costs adds to module and overall project costs
  • Indian rupee falling against the US dollar will lead to exchange rate variations be­t­ween bidding and finalisation of projects
  • Lack of flexible financing solutions
  • Lack of tax exemptions and subsidy availability for R&D.

To encourage domestic solar manufacturers to build scale with quality and reduce our import dependence, the government should consider the following:

  • Allowing clearance from special economic zones (SEZ) units to domestic tariff areas (DTAs) on a duty forgone basis. Additionally, allowing the conversion of SEZ units to DTAs and permitting them to continue operating from the same infrastructure with enabling policies
  • The additional PLI allocation of Rs 195 billion announced in Union Budget 2022 for manufacturing high-efficiency so­lar modules should be awarded to the existing waitlisted PLI bidders
  • A capital subsidy of 50 per cent for setting up R&D and quality testing infras­tructure within the manufacturing unit and super deduction of 200 per cent for R&D expenses for solar technology development.
  • A technology upgradation fund for existing investments in cell and modules
  • Bringing in flexible financing solutions to finance projects
  • A price variation clause should be in­cluded in solar tenders
  • A payment security mechanism to co­ver the risk of default by state utilities/discoms
  • Reducing solar project tender cancellations and speeding up the project-awarding-process
  • Avoiding PPA renegotiations
  • Investment in energy storage is needed
  • Need to promote more decentralised re­newable energy such as rooftop solar
  • Unburdening discoms and enforcing green energy purchase through them.

To sum it up, we can say that although the challenges are there, the growth story presents a compelling argument for domestic manufacturers like Vikram Solar to focus on innovation and capacity expansion.