The domestic solar manufacturing industry has received a major fillip in the past two years, partly due to supply chain issues during the pandemic and various government initiatives. This has led to a flurry of projects being announced and executed by both new and established manufacturers. Waaree, an early mover in the solar module manufacturing space, is now focusing on the entire solar manufacturing value chain as domestic procurement is gaining traction. Against this backdrop, Vivek Srivastava, chief executive officer, Waaree Group, discusses the domestic solar manufacturing landscape and highlights the company’s future plans…
What have been the key hits and misses in the domestic manufacturing space over the past year?
It is a matter of immense pride for every Indian, and the manufacturing sector, that India has achieved a historical milestone of 60 GW of installed capacity in high-end solar manufacturing. The persistence of first-generation entrepreneurs is commendable, considering the rapid increase in capacity from 10 GW of low wattage polycrystalline modules to 60 GW of high wattage, technologically advanced modules in just two years. Besides the scale, what is remarkable is the extent of backward integration and the success of the “Make in India” modules, which have made a mark in the most demanding markets of North America and Europe.
The Indian government and the Ministry of New and Renewable Energy have encouraged domestic manufacturing through several initiatives, the most notable being the production-linked incentive (PLI) scheme in two tranches, imposition of basic customs duty and mandates for the usage of locally manufactured modules. However, capacity utilisation continues to suffer due to unrestricted imports from China and duty-free imports from Southeast Asian countries with free trade agreements. The deferment of the Approved List of Models and Manufacturers (ALMM) by a year has created a situation where imports far exceed local deployment, effectively depriving Indian manufacturers of the local market. The flip-flop in the implementation of well-thought-out policy measures creates uncertainty, which is best avoided. Continued insistence on the procurement of Chinese modules, both by developers and CPSUs, even when modules made in India are available at attractive rates (Rs 16/Wp) that give fantastic returns on projects, is a matter of concern and needs to be halted immediately.
What were the major achievements of the company over the past year? What are the other emerging segments that the company is focusing on?
Moving beyond the stellar financial and operational metrics of performance, I would summarise the achievement in one sentence: “Sure-footed march towards becoming the leading player in energy transition and the preferred supplier of products and solutions in the new energy space for our esteemed customers.” Waaree has always been recognised as a leading manufacturer of solar modules, a position further strengthened by being the top player in both the domestic and export markets. We take pride in delivering consistent quality, continuous improvements, new variants and enhanced certifications which enable us to offer the same product across 20 countries as well as in India. This is reflected in our healthy order book, which is a mix of different markets and segments. Waaree continues to expand the reach and availability of solar solutions through the country’s largest network of franchisees and a unique programme/initiative called “Waaree Experts”. This initiative has helped electricians and tradesmen to considerably augment their earnings while enabling the customers with robust deployment and O&M.
Our EPC business, Waaree Renewable Technologies Limited, continues its march among the top players, with sizeable repeat orders from – an ode to our customer-centric execution. Last year, we completed some large and challenging projects that involved round-the-clock grid integration, 220 kVA line evacuation, etc., all within the agreed/contracted timeline. Customers have rewarded us and showed their faith with a sturdy pipeline.
The energy storage system and advanced cell chemistry business has gained traction, with a growing number of certifications in mobility and stationary storage, positioning us to serve demanding customers across segments. The commercial and industrial footprint was further expanded with in-house design for a 720 Volt system. Currently, 30,000 two- and three-wheelers run on lithium-ion batteries supplied by Waaree. Further, we are at advanced stages of augmenting our battery manufacturing capacity by 1 GW. We received wide media coverage for our strides in green hydrogen by securing a tender, devising plans for electrolyser manufacturing and making efforts to serve the entire value chain. Readers can look forward to exciting news on this front.
What is your take on the recent policy interventions for solar manufacturing? What is the status of the company’s upcoming projects?
The support for manufacturing is substantial and praiseworthy. Regarding solar manufacturing, stakeholders should seize the once-in-a-lifetime global opportunity presented by the “China Plus One” paradigm to de-risk supply chains and the impending run rate of over 1 TW globally per annum. India can become the global supplier of choice for 60 GW per annum, a potential $12 billion-$14 billion opportunity.
While the central government has been proactive, state governments can establish manufacturing hubs by setting up industrial parks in proximity to geographies with large-scale deployment with ready to move infrastructure to promote large-scale integrated solar manufacturing. This will result in significant savings in logistics costs, usher in economies of scale, reduce time to market and generate significant employment. Electricity and utility costs should be competitive and be achieved without subsidies by implementing measures to promote 100 per cent renewable energy without restrictions. Waaree has a module manufacturing capacity of 12 GW, with ongoing augmentation, including a plant in the US. The cell manufacturing plant of 5,400 MW capacity will be commissioned in March 2024. Additionally, Waaree has commenced work on the greenfield expansion of manufacturing 6 GW (ingot-wafer-cell-module) in line with the PLI secured in the second tranche.
How is the company addressing supply chain and logistics issues?
A reliable and resilient supply chain has become the topmost agenda globally, as witnessed during the deliberations at the G20 summit. This is crucial for accelerating energy transition and achieving net-zero goals. The skewed nature of the value chain, from processing rare earth metals to manufacturing, is currently unsustainable. Collaboration across geographies to achieve better economies and strengthening of local supply chains, even at a premium, are already under way. Technology-led innovations in material science will reduce dependency on scarce materials, known for their substantial carbon footprint and detrimental impact on communities. While the efficiencies of existing technologies will continue to improve, the dynamics of Moore’s Law and Eroom’s Law will drive newer technologies for generation, storage and distribution.
At Waaree, we are working with missionary zeal to maximise localisation through backward integration, collaborating with vendors from ancillary industries, broad-basing supply chain and simultaneously keeping the focus on quality and competitiveness. Optimising logistics is a key element, and we are exploring multimodal logistics and process efficiencies.
How does India compare with other nations in terms of its manufacturing-related incentives?
The concerted efforts to make India a manufacturing hub in select strategic sectors is laudable. The participatory nature of stakeholder consultations, openness and transparency in incorporating industry suggestions, inviting global expertise and conducting reviews for mid-course corrections during the roll-out of the PLI scheme is testament to the spirit of “Make in India” and “Atmanirbhar Bharat”. There is ample evidence to indicate that riding on robust local demand and harnessing export potential, India can soon achieve manufacturing leadership. We must also be cognisant of the changing nature of support from countries such as the US and blocks like the European Union towards sunrise sectors, especially new energy. The Inflation Reduction Act in the US and the proposed measures in the European Union are prodigiously incentivising local manufacturing and deployment across the value chain to reduce dependency on one country.
Do you think India will be successful in achieving its 2030 targets?
I believe that we have done quite well in the journey so far. Despite obstacles, which everyone is working to overcome, we are on the cusp of unprecedented and phenomenal growth. What gives me confidence is a combination of factors, starting with a vision enshrined in the bold declaration of “Panchamrit” at COP26, the ever-evolving policy framework, sustained growth in demand for energy driven by a robust economy, a resilient power grid, willingness to explore newer business models and the zeal of corporate India to become global leaders in new energy. The conversations around net zero and leveraging it not just for ESG compliance but as a mission, executed with healthy returns, are heartwarming. As we progress expeditiously, we must be mindful of the massive capital requirements in this gigantic energy transition.
