Interview – Krishnendu Mukherjee, COO – Sova Solar Limited
What kind of growth opportunities do you see in the Indian solar power market? How well are you prepared to take advantage of the same?
India, a tropical country, has the tremendous capacity of solar energy power generation and it is expected that within a few years India will be one of the world’s major solar power producers in near future. The energy consumption of India has continuously risen since year 2000, according to energy statistics. It is expected from the trend that the consumption will be more than doubled by 2040. The capacity of our plant is 200 MW which we want to increase up to 1 GW by the year 2022. In this financial year, we have a target to reach 500 MW to contribute in the solar target taken by the Government of India.
Could you throw some light on the impact of imposed safeguard duty on your business as well as the overall solar segment?
Solar safe guard duty is the most highlighted topic for the Indian solar industry. In relation to import safeguard duty gives domestic producers a period of grace to become more competitive. As an Indian manufacturer Sova Solar is determined to do their business in India. We hope the decision of the Government and MNRE will be beneficial for the Indian Manufacturer.
How do you see the equipment price movements from here – over the next few years?
We think that as there is a competitive market in India for solar module, therefore there is a possibility of falling of the price of the solar equipment. Though the demand of the solar electrification is increasing but as the competition among the companies remains in the market, it is expected that the price will be decreased over next few years.
What are some of the biggest challenges faced by the solar power segment in India? Also could you pin point to the policy and regulatory gaps that need urgent attention in the solar power segment?
There is very little per capita access to land in India. Due to this reason, land area for exclusive installation of the solar panels might have to compete with other necessities of the required land.
Besides this, National Solar Mission is under constraints due to the inadequate financial support. It is also to be noted that consumer awareness is necessary about the technology, its economies and right usage.
What are your views on the current solar tariff levels under prevailing scenario of newly imposed safeguard duties, falling rupee value and uncertainty over GST? Do you feel the falling tariffs will have an impact on the quality of solar projects?
Directorate General of Trade Remedies imposed solar safe guard duties on solar panels, imported from China and Malaysia, which is the cause of raising tariffs in future solar power projects. It might be the cause of slowing down India’s ambitious solar programme. Besides this, the devaluation of rupees has an impact investor’s return in the bidding of the solar power project.
If a rupee increases in rupee-dollar exchange rates, it leads to a 2 paisa increase in per unit tariff. In last 4/5 months rupee depreciates 64-65 to 74-75 per USD but it was regaining its value at 71-72 USD after a certain time period. Therefore solar market faces 4 paisa per unit reduction in margin. This exchange rate contributes more than 50 % in the total cost of solar project. Due to this reduction of the value of the rupee, execution of the solar project becomes delayed.
What kind of growth and capacity additions do you see in solar power sector in India, over the next few years?
Solar power is attractive and it is abundant. It offers a solution to fossil fuel emission and global climate change. In India, National action plan on climate change make the India’s economic development energy efficient. Currently India ranked fifth in world with 26 GW installations in various locations in India till 30th September, 2018.
Government of India’s initiative of 100 GW of solar energy is very prestigious target for us. As solar power helps in meeting the rural needs of the electrification, it is expected that in our country this solar power sector will grow indisputably.
