There has been a lot of talk lately echoing the sentiment that the next big market in India at the residential level will be solar integrated with power back-up technology. Mercom India recently sat down with Sachin Bhalla, vice president of marketing for Luminous India, during the Renewable Energy India Expo 2018, to discuss the effects of a plethora of issues affecting the solar industry right now like rupee depreciation, market competition, pace of innovations, government support and policies. Luminous India is a subsidiary of Schneider Electric, one of the largest inverter suppliers in India.
Here is the edited excerpt from the interview:
Is there an impact of rupee depreciation on your business?
Some electronics will get impacted but not a lot. If we look at panels, yes, solar cells are coming from China and there would be some impact, but it wouldn’t be a lot because like the Indian rupee, Chinese currency is also depreciating. So, the dollar is not that significant. For us, what we should focus on is depreciation of rupee versus renminbi, which is not too much.
What about the trends in inverters in India? Which is the preferred inverter type – central or string?
We are more focused on homes, but we are seeing traction in every kind of inverter. Less than two kW has the biggest market, but we are also observing that a lot of people are putting up six kW and ten kW plants at their homes very easily. They understand that solar power is different from normal power, so the installed capacity is witnessing an increase. But, what happens is that while grid tied system saves more power, they are also very difficult to install with respect to working with state electricity boards for approvals. The full installation process can take 2-3 months. But if you install solar power with a battery system, that can be installed in three days, people have a choice. If there is no power cut, people are going with grid tied, if there is more power cut, for example more than 3 hours, then they are going with storage.
What about the solar kit system market?
If we look at the consumer perspective, buying inverter, battery, panel from different vendors does not make sense because if one product fails, he wouldn’t know what has failed. Inverter will not show anything. He doesn’t know whether wire has broken, or panel has a fault. But if a consumer is buying the entire package from us, then he is assured that our service engineer will check the entire system, and this gives consumer peace. We have service personnel, who are experts in everything. So, from the consumer perspective, if they install our products, everything is taken care of.
There is not enough insurance in the sector. So, Is there any guarantee from your side?
We are going to give insurance on the projects installed by us. We have launched a new portal where a consumer can check what type of projects they want to install, then there will be a survey and we will get a partner to install it. So, this kind of a model will offer 5-year warrantee free of cost to the customers. Warrantee is unconditional, and we have insurance partners to back it up.
We are going to give insurance on the projects installed by us. We have launched a new portal called www.solarbyluminous.com . A consumer can come on this website and check what type of projects they want to install, then there will be a survey and we will get a partner to install it. So, this kind of a model will offer 5-year warrantee free of cost to the customers. For example, if it is because of strong storm, we will give the warrantee.
What is your market share in India currently?
I don’t know about the market share, but we are growing at more than 50 percent. This has happened because we have increased our distribution. Earlier, 80 percent of our sale was coming from north India but now it has come down to 60-65 percent and the rest is coming from south, west, and the east. We have enrolled a lot of partners. We have trained 10,000 dealers on solar and have done advertising campaigns. Apart from that, we have also launched a lot of new products. We didn’t have grid-tied inverters, so we have launched that too. Regalia is another product we have launched, which is a true innovation. This is solar inverter with in-built lithium-ion battery. All you need to do is connect the panel to this and nothing else is required. It will take care of everything. It has touch screen, wi-fi control, you can see all the power generated on your phone, it charges from the grid and solar panels. You can set the priority. This makes solar simple for the home user.
We are growing at more than 50 percent. This has happened because we have increased our distribution. Earlier, 80 percent of our sale was coming from north India but now it has come down to 60-65 percent and the rest is coming from south, west, and the east. We have enrolled a lot of partners. We have trained 10,000 dealers on solar and have done advertising campaigns. Apart from that, we have also launched a lot of new products.
Do you have any competition in this segment?
Not as of now. In the U.S., it would be Tesla, but that is designed keeping the U.S. in mind, which is 10 kW. Ours is simple system with 1 kW load capacity with a two-hour back-up. We have a lot of competitors but then we have innovative products like Regalia, which is a solar ready lithium ion enabled power back up system, for which we don’t have any competition in India. In the U.S., it would be Tesla, but that is designed keeping the U.S. in mind, which is 10 kW. Ours is with 1 kW load capacity with a two-hour back-up.
How is the response for these products in India?
We are currently selling 100 a month. These products are a little expensive. There are two variants- one is 900 VA which costs ₹59,000 (~$811.735) and there is another 1,500 VA which costs ₹79,000 (~$1,086.90). This price is without the solar panels.
How do you see increased competition in the light of foreign players starting manufacturing in India? Is market ready for competition or still needs some hand-holding from the government?
What we are looking for from the government side is that it should make rules but not dictate too much. Because what happens is that the government is trying its best but at the same time industry is moving so fast that the government is not able to keep up. Policies are lagging. So, it shouldn’t happen that with more policies, we don’t have a level playing field. And it also creates disturbance in the strategy. For example, safeguard duty may be good for the domestic manufactures but at the same time it was not clear for three months if it was there or not.
What do you expect in terms of policy from the government?
The whole process of inter-connecting grid-tied inverter with the grid should be made very simple. There should be transparent ways in which we go to a DISCOM and say we want a grid-tied inverter installed here, and they should have a defined timeline to install it. Because right now, we don’t know what time-period I should promise to my customer, and if I will get the permission or not. If I get the permission, I am not sure how much time it will take for the inter-connection to happen. So, in this case, I can’t promise anything to the customers. When the bill will come, what charges will continue, what charges will be waived off. For example, some DISCOM has a meter charge, but nobody tells us. Within the city sometimes 3 different people from same DISCOMs do different billings. Because they themselves are not clear on how to bill in a solar situation. It’s very new for them. For commercial structures, they understand but for homes, there is still lack of clarity in state DISCOMs.