The following is from a conversation Mercom India had with Sunil Rathi, director of sales and marketing for Waaree Energies on the current state of Indian solar market.

What do you have to say about the Indian solar sector right now?

It is tough, full of surprises, and promising. It’s tough because growth has come in spurts, it’s full of surprises because it is still developing and we’re seeing new policies (state and central), and it’s promising because the government has set a clear target and the growth we’ve seen in the past two years gives hope to everyone.

We have grown exponentially in the past three years and – here I am quoting your (Mercom) numbers – solar prices have declined by more than 70 percent. New policies are being developed to tackle these new challenges.

Despite the exponential growth of the Indian market that you pointed out, we see that you are exporting a good portion of your manufactured products. Why is that?

There is a supply shortage in China as well as heightened demand in China, the U.S., and Europe. So, we are supplying them.

What are the major challenges you face when competing with Chinese suppliers in India?

The competition is not fair. It is not a level playing field when someone is dumping goods at cheap prices. If they are sending supplies to India at less than the manufacturing cost, how are we supposed to compete with them?

They have kept their module prices high in other markets, which compensates them for the cheap prices in India. These companies aren’t even dumping at a loss in India because this cross subsidization balances out their costs.

Are there any plans for scaling up further in India?

Yes. This year our manufacturing will be a minimum of 1.2 GW and a maximum of up to 1.7 GW. In the past four years, we have spent a substantial amount on R&D. We want to lead the sector and that is only possible by investing in cutting-edge technology in order to develop high-quality products. We are also setting up an inverter manufacturing unit in India.

Do you have any comments on the anti-dumping case?

This should have been done a bit earlier. We are late as a nation in this. But, now, the government has started the requisite procedure.

You said we are late as a nation. What about in 2014 – when anti-dumping petitioners took back their petition?

In 2014, the sector was not as developed as it is today. It could not supply itself. Back then, anti‑dumping (tariffs) would have slowed down growth because local manufacturing capacity was negligible – hence the petitioners saw logic and took back the petition.

Now, we have set cell and module manufacturing capacity that can be scaled up within months to consistently supply close to 8 GW of modules and 6-7 GW of cells. There’s no backing out of the petition this time around.

How has the Goods and Services Tax (GST) affected the sector?

The GST has created a lot of uproar in the sector, and the ambiguity that surrounds the applicable rate slabs isn’t helping the sector.

Even now, as a module manufacturer, the GST is straight-forward 5 percent. But, as an EPC (engineering, procurement, and construction) developer, even now I’m not sure regarding the various applicable GST rates for various components like inverters, BOS (balance-of-system equipment), etcetera.

What do you think about the viability of low solar tariffs?

Yes, these tariffs are viable. If companies are bidding that means they have done their math and it makes sense to them. Solar projects are more of financial engineering. If interest rates go down by 0.25 percent or 0.50 percent, then tariffs at ₹2/kWh can be viable for few players. The ease of borrowing has increased in India.

World Bank Group members, ADB, Middle East financial institutions, and others are looking at the Indian market as a new avenue and this has made huge funds available to developers.

What will Waaree’s strategy be in the face of increasing market competitiveness?

Quality services and tariff competitiveness are where we will be ahead of the rest. We believe in delivering quality products at the right price and providing credible services. Doing this will ensure that we stay ahead of the pack.

We have a good customer base and we will grow with our customers.

What about the proposed 7.5 GW Central Public-Sector Unit (CPSU) program?

It is a good initiative that provides visibility to local manufacturers. It is easy to invest when one has a visibility of three years.

This target will also lead to reduced prices for modules and cells because firms can plan for long-term investment when they are sure there will be demand. This will allow them to scale up according to a set plan.

What are some of the other challenges you have experienced?

Tendering should be consistent. Government tenders take place in bursts with long lulls in between. There’s activity for three- or four-months, then no tendering or auctioning for a quarter. The lack of consistent demand affects manufacturing.

Do you have any other comments?

The government of India should impose an anti-dumping duty as soon as possible, this will also bolster the Make in India program.