Unless there is a policy course correction, the solar rooftop installation goal of 40 GW by 2022 has been viewed as a challenge to achieve by many in the industry, including rooftop installers. To add to the challenges, module prices have increased over the past few months and solar installers are accusing some Chinese module suppliers of backing away from existing supply agreements, delaying shipments, and demanding higher prices.
Mercom had the opportunity to speak with Umakant Shende, chief operating officer of CleanMax Solar, about the issues plaguing India’s rooftop solar sector.
What are your thoughts about the progress that rooftop solar has made in comparison to utility‑scale solar in India?
We cannot compare the two because each one faces different difficulties. Focusing on rooftop solar, I would like to say, ‘so far so good, but there’s room for massive improvement.’ The target of 40 GW, is hard to attain.
Having said that, in the past year rooftop solar growth has been satisfactory. This shows that all stakeholders – including the masses – understand the need for it and its utility. In the past year, more than 600 MW of rooftop solar has been installed.
You said the 40 GW of rooftop solar by 2022 goal will be hard to attain, could you elaborate on that?
I strongly feel that solar roof top is necessary for India considering distributed solar generation and scarcity of non-agriculture land. I initially thought it will happen, but as we go forward I can now say that reaching 40 GW by 2022 is going to be very tough. There are various reasons for this. Rooftop solar is primarily driven by state net‑metering policies and most of these net-metering policies put an upper ceiling of 1 MW on rooftop solar projects. This artificial capping is inhibiting the growth of rooftop solar.
For commercial and residential complexes, and other buildings, the available roof area is much smaller because the roof is being utilized for other activities. These installations are there to fulfill small targets, kW-size targets. But kW size targets won’t help achieve the 40 GW target by 2022.
On the other hand, there are industrial complexes, factory buildings, and manufacturing units with massive available roof areas that are not being completely utilized because the artificial capping prevents developers and firms from using the entire available roof area.
Other than underutilization of roof area due to net-metering constraints, are there any other factors delaying the progress of solar?
The government talks about its goal of installing 40 GW by 2022, but there is no promotion underway for reaching that target. No exclusive policies are in place for that market segment.
Following the imposition of the Goods and Services Tax (GST), module prices have gone up by 5 percent and inverter prices have risen by 18 percent while the accelerated depreciation benefit has been cut in half. The government did not educate the sector about the various tax slabs and which components would fall under each one. That has created ambiguity that hinders progress.
There is also a lack of awareness about rooftop solar among residential customers. Government should create awareness programs so that people understand the benefits of rooftop solar and adopt it in their homes. This is a pre-requisite for residential rooftop solar to gain momentum because everyone in India is used to getting subsidized power and installing a rooftop system is costly.
We have heard complaints that module suppliers are backing out of supply agreements by increasing prices or delaying supplies. Is it true? Have you experienced it?
Yes, it is happening. Yes, again, we have experienced it. Some Chinese suppliers have delayed shipments and even demanded a price differential be paid. In some cases, we paid them in advance for the module supplies and the suppliers delayed them despite already receiving payment.
Do you have any additional comments on residential rooftop solar?
For residential rooftop solar, awareness comes before anything else. These installations are intended for people who earn in the thousands, they are not conglomerates for whom rooftop solar is a cheap energy option. Government should subsidize the residential rooftop segment as it is difficult for the average Indian to bear the cost of an entire rooftop system. Net-meters should be installed as quickly as possible and in this, too, the government must accept the onus of responsibility.
What is CleanMax Solar’s growth plan for India?
We have partnered with conglomerates and large institutions, have a healthy project pipeline, and are executing our projects in full tandem. We are participating in government tenders, too. We plan to increase our rooftop portfolio to over 150 MW (installed) by the end of 2017.
In July, CleanMax raised $100 million in equity financing, what are your plans for the funds?
We are focused on rooftop solar. The entire fund will be utilized to consolidate our position in this sector so that we can emerge as the largest rooftop project installer. We plan to take few projects on our books of account. A part of the fund will also be used to expand in newly emerging markets in the Middle East and Southeast Asia, where we have setup offices.
In May, Hitachi entered the Indian market in a collaboration with CleanMax, are there any other similar partnerships in the pipeline?
We are proud to collaborate with Hitachi. It is our plan to form new partnerships with expert companies in other segments, too, to provide the best service. There are few more such partnerships in the pipeline, but I cannot reveal them now.
Saumy is a senior staff reporter with MercomIndia.com covering business and energy news since 2016. Prior to Mercom, Saumy was a copy editor at Thomson Reuters. Saumy earned his Bachelors Degree in Journalism & Mass Communication from the Manipal Institute of Communication at Manipal University. More articles from Saumy Prateek.