Mercom India interviewed K. N. Sreevatsa, Vice President and Head – Business Unit Power Conversion at ABB Limited, to get his views on the state of the solar inverter market in India.
What do you think about the Indian solar market, the present situation, and the future ahead?
The market has slowed down a bit in the recent past, but it has huge growth potential. At present, there are concerns and uncertainty regarding GST rates and module prices in the wake of the anti-dumping investigation.
This is a short cycle and as we saw in the recently conducted 500 MW solar auction in Gujarat, prices will settle down and the sector will move ahead. A price of ₹2.64/kWh is commendable in these uncertain times and shows the resilience of the Indian solar industry.
What factors will aid in the growth of the market?
The market will grow as there is a clear mandate – 100 GW by 2022 – that in itself is sufficient to push the market in the coming years. There is government support for the target and it has shown in the initiatives being taken [by the government].
There yet exists uncertainty regarding the GST rate for inverters in India, what is ABB’s stand on this?
Since ABB is a manufacturer, not a trader, we don’t have any ambiguity regarding GST rates. ABB inverters are subject to a GST of only 5 percent.
Companies that buy elsewhere and supply here [in India], their inverters are subject to different GST rates and that is where the uncertainty remains.
What can the government do to help the growth of inverter manufacturing in India?
We are missing a few things here in India. When it comes to taxation of goods, as of now, it is favoring suppliers rather than manufacturers.
Currently, we are at a disadvantage making in India. I want to impress upon the government of India that fully built inverters when exported to India attract a lower duty than the components we import to manufacture our inverters in India. A fully built inverter when exported to India attracts 5 percent duty, whereas the components we import for our manufacturing facilities attract 10 percent duty.
This is not supporting the “Make in India” mission. The government should levy an anti-dumping duty on inverter exports to India. We have a market (home-grown) in India, where there are strong players manufacturing inverters. We have the manufacturing capacity for inverters that can fuel the GWs of installations each year.
How will the anti-dumping duty on inverters help Indian market?
An anti-dumping duty will promote Make in India as more and more players will invest here, creating jobs for the indigenous workforce. Currently, inverter suppliers are selling at a higher rate in their country than in India. If an anti-dumping duty is imposed, these inverter suppliers cannot do that under the new regulations.
What do you think is the best inverter for India and why, keeping in mind project cost?
String inverters are okay for small-scale or distributed generation projects below 5 MW. But when we talk of utility-scale projects, central inverters are best.
The use of central inverters reduces project costs, as it has low maintenance costs and high reliability. If string inverters are used for utility-scale projects, the project cost increases because it takes many string inverters to do what one central inverter can do, thereby hiking balance of system (BOS) costs. I recommend central inverters for any project of 5 MW or above.
What is the single challenge we must address for India’s solar future?
The challenge is finding the best competitive price. In India, everyone wants a piece of the cake and eat it too. There is ultra-competition pushing prices to new lows every quarter. Once the price stabilizes around a mark the entire sector is happy with, the target is good enough for all players to grow. I am happy seeing ₹2.64/kWh in Gujarat – this is higher than the low of ₹2.44/kWh.
What has the government got right so far?
There are many positives. The REC and RPO mechanisms have pushed the sector to achieve over 14 GW in three years.
Solar park development as drastically reduced project costs by providing all required infrastructure in one place. This is one of the best ideas the government has had, including the doubling of the solar park capacity to 40 GW.
Net-metering policies have worked in a few states, while others have yet to reach a satisfactory level. This has ensured that rooftop solar will grow, albeit slowly.
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.