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India’s domestic solar manufacturing sector is finding it difficult to cope with the falling prices of modules globally. In order to expand their businesses, local manufacturers need the government to step in and support them. Banks too, need to open up to lending, according to Mr. Avinash Hiranandani, Managing Director, <a href="http://www.renewsysworld.com" target="_blank" rel="noopener">RenewSys India</a>, a leading module and module component manufacturer.
Mercom had the opportunity to interview Mr. Hiranandani on the sidelines of the Intersolar Mumbai 2017 conference. Here are excerpts from that interview.
What do you think about the Indian solar manufacturing sector right now?
In my opinion, about 70 percent of modules are still <a href="https://mercomindia.com/solar-imports-q3-year/" target="_blank" rel="noopener">imported</a> and only 30 percent are manufactured in India.
Solar module installations have increased. In response, both solar module and module component manufacturers have increased their manufacturing capacities. Manufacturing units are busy but are struggling to make profits.
People are expanding their manufacturing units or are planning to do so, with the hope that greater product turnover will help them gain profit.
At present, the entire manufacturing in India initiative relies heavily on the demand cycle in China.
Currently, Chinese module manufacturers are supplying modules primarily in China, due to local demand. When this demand is met, low-price dumping in India will begin.
Hence while there is business, it is not good enough to make profits and grow.
What are your thoughts on the <a href="https://mercomindia.com/dgad-hearing-solar-anti-dumping-investigation/" target="_blank" rel="noopener">anti-dumping</a> duty (ADD)?
ADD or some similar measure, if implemented, will be in the long-term interest of India’s solar manufacturing sector. If ADD is imposed, the countries subject to higher duties may start sending their supplies elsewhere.
Polysilicon and wafer sources however, are based primarily in China. If the cost to import polysilicon and wafers increases, then Chinese modules will be at par with the prices of Indian modules, even after the ADD is implemented. Hence it will be beneficial to have factories producing these in India too.
What should the government do to help local manufacturing grow?
If the government wants domestic manufacturing to grow, it needs to support the solar manufacturing sector. The best thing right now would be to release the entire implementation plan for the <a href="https://mercomindia.com/7-5-gw-cpsu-program-game-changer-indian-domestic-manufacturers/" target="_blank" rel="noopener">CPSU</a> (Central Public-Sector Unit) program. It would provide at least two- to three-years of market visibility for Indian manufacturers.
Handholding is required for a period of 5 to 10 years whether it is through the ADD, government projects, or any other program that resembles the domestic content requirement (DCR) program. Once that is done everyone, (all manufacturers from India and elsewhere), will be on equal footing.
Looks like these wishes have been granted as the government just announced a  bevy of <a href="https://mercomindia.com/india-goes-support-domestic-solar-manufacturing-bevy-subsidy-proposals/" target="_blank" rel="noopener">subsidy proposals</a> to support domestic manufacturing.
What has changed for Indian solar manufacturers over the years?
The major change has been in perception. People have become less skeptical of the segment and solar sector as a whole. There is enthusiasm and a positive sentiment about solar and that will yield results. Everyone is talking about expansion now, and this is a great change from last year when module manufacturers were worried about lack of business. The ease of doing business has also increased.
What challenges do you face as an Indian manufacturer?
Funding from banks is a challenge for manufacturers. Banks are either over exposed or have a past history that makes them wary of funding manufacturing units. Banks have been funding solar projects, instead of funding solar manufacturing.
In this business (solar manufacturing), the turnover-to-capital ratio is high. Additionally, the operating expenses are massive. It is difficult to keep a business afloat when easy funding is not available.
The Minister of Power recently <a href="https://mercomindia.com/mnre-tender-solar-wind-projects-march-2018/" target="_blank" rel="noopener">announced</a> a solar project tender trajectory, do you have any thoughts on that?
It is a feasible trajectory.
The way the government has executed project installation programs and pushed implementation agencies is commendable and is no easy feat.
It is easy for us to say 10 GW, 15 GW, but we miss the point that these are ‘Gigawatt’ figures we are talking about. The government has aimed for the stars, and I believe if you aim for stars you will at least land on the moon.
There have been rumors that foreign modules have been used in DCR projects, are you aware of this and what could be a feasible solution?
There is a possibility and I have heard these rumors too.
A probable solution could be to put a ‘Made in India’ label inside the glass of the module.
Thereafter, if imported modules arrive at ports with a similar inscription, customs officials can easily detain them. Then, imported modules will not be easily useable for projects that require/ mandate domestic modules.
This will also give a boost to Indian manufacturers for whom the government is planning projects that mandate the utilization of domestically manufactured modules.
There is talk that there will be a <a href="https://mercomindia.com/mnre-tender-solar-wind-projects-march-2018/" target="_blank" rel="noopener">mega- manufacturing tender</a> soon, what are your thoughts on this?
When that tender comes out, it will benefit the larger players. The idea is to start manufacturing right from the ingot stage.
This requires polysilicon and wafer manufacturing capacity. These processes are costlier than the manufacturing of cells and modules. Hence smaller organizations will find it difficult to manage the cost of setting up and running these operations.
What are the expansion plans for RenewSys?
We have recently doubled our module manufacturing capacity from 150 MW to 300 MW. We are planning to increase our module manufacturing capacity by another 200 MW immediately.
Once we reach 500 MW of module manufacturing capacity, the plan is to double the capacity to 1 GW in the next two years. As of now, we also have 130 MW of cell manufacturing capacity which we will double to 260 MW soon.
Now-a-days, the time needed to procure equipment is close to nine months. Add the time required to plan out the expansion and to start running a fully operational unit, and the total set-up time required crosses a year.
How is RenewSys keeping up with its competition?
RenewSys modules are known for their quality, reliability and performance in the field. The same is true of the components that we manufacture. Whether it is our modules or our range of Solar PV Cells, Encapsulants and Backsheets, we are at par with the best manufacturers globally.
We have two state-of-the-art R&amp;D and ‘Reliability Testing’ laboratories in both our plants at Bangalore and Hyderabad.
Our ‘Reliability Testing’ laboratory at Hyderabad is one of its kind in India, with seven environmental testing chambers where we conduct tests like ‘Damp Heat’ and ‘Thermal Cycling’, etc. We also test all incoming module components as a routine to ensure consistent quality and performance.
In fact, we put our modules through three times the prescribed IEC standards at our in-house lab to ensure performance in field. Our quality products, priced competitively lend us global visibility.
It would however be inaccurate to say that we are competing with the prices of imported modules.
We are cognizant of the cost sensitivity of the industry and are hence actively working on reducing our overhead costs and optimally utilizing available resources to increase output.
<div class="saboxplugin-wrap" itemtype="http://schema.org/Person" itemscope itemprop="author"><div class="saboxplugin-tab"><div class="saboxplugin-gravatar"></div><div class="saboxplugin-authorname"><a href="https://cms.mercomindia.com/author/saumy/" class="vcard author" rel="author">Saumy Prateek</a></div><div class="saboxplugin-desc"><div itemprop="description"><div class="designboxt">
<img class="alignleft" style="border-radius: 50%;height: 50px;margin-top: -4px;border: 1px solid #00b451" src="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2023/12/saumy-edited-1.png" width="50" />
Saumy Prateek Staff reporter at Mercom India 
<a href="https://mercomindia.com/author/saumy/" target="_blank" rel="noopener">More articles from Saumy Prateek</a>
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<div class="authorboxn"><img class="alignleft" src="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2023/12/saumy-edited-1.png" width="79" height="102" /><a href="https://mercomindia.com/author/saumy/" rel="noopener">Saumy Prateek, </a>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 &amp; Mass Communication from the Manipal Institute of Communication at Manipal University.<a href="https://mercomindia.com/author/saumy/">More articles from Saumy Prateek.</a></div>
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Interview: Government needs to ‘Handhold’ Local Solar Manufacturing for 5 to 10 Years

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