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Economy of Scale Holds Key to Renewable Energy Re-Manufacturing

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Leveraging the ‘Make in India’ Campaign for Renewable Energy Growth

The renewable energy industry can draw a lot from the government’s flagship ‘Make in India’ campaign to bolster its prospects.

The Rise of Renewable Energy and Its Impact

With sustainability being the order of the day, manufacturers across the globe are increasingly developing more and more efficient ways of tapping renewable energy. Aimed at reducing dependence on fossil fuels, this welcome trend is contributing to clean energy competitiveness. Making giant leaps in the renewable energy sector, India, too, is at the heart of this transition.

India’s Renewable Energy Growth Trajectory

In 2016-17, the output of renewable power projects went up by 26 percent, making the Indian renewable energy sector the fastest-growing in the world. According to the National Resource Defense Council, more than 1 million full-time equivalent jobs will be created by the solar industry alone by 2022. This includes more than 2 lakh engineering jobs and over half a million skilled sector jobs. The wind sector, on the other hand, will help generate 1.9 lakh jobs in the next five years.

‘Make in India’ and Its Role in Renewable Energy

The renewable energy industry can draw a lot from the government’s flagship ‘Make in India’ campaign to bolster its prospects. Hartek Group, equipped with high-quality manpower to support the domestic solar and wind manufacturing markets, is helping India emerge as a global manufacturing powerhouse catering to all the needs of the renewable energy sector.

Opportunities for Domestic Manufacturers

The ambitious target of scaling up clean power production to 175 GW by 2022 will create massive opportunities for domestic manufacturers. To capitalize on this growth, manufacturers must innovate and adapt to market demands.

Innovation and Competitiveness in Solar Manufacturing

The future of the solar manufacturing business will depend on how Indian companies beat the competition through constant innovation, quality improvement, and marketing. Despite competition from Chinese manufacturers, India holds a massive market potential for solar panels.

Government Support and Policy Initiatives

Government Support and Policy Initiatives

To realize this potential, domestic manufacturers should prioritize clean energy strategies. The government can support this by offering:

  • Incentives and subsidies

  • Effective energy and solar skill development policies

  • Establishment of more module assessment labs

  • Encouragement for R&D initiatives

  • Reduction of procedural delays in executing projects

Challenges in Domestic Solar Manufacturing

Despite the immense scope, challenges remain. Lack of scale and an underdeveloped supply chain hinder growth. Flexible incentives and financing options, effective net metering policies, and anti-dumping duties on foreign solar module manufacturers are critical needs.

Strengthening India’s Solar Industry Competitiveness

To make the Indian solar industry globally competitive, the government should focus on a larger policy framework that supports domestic manufacturing plans. This will help India:

  • Control the solar supply value chain

  • Increase revenue and profitability

  • Address issues related to transport, infrastructure, taxation, and power outages

Building a Skilled Workforce

The government should create a skilled workforce by introducing solar manufacturing courses under the National Skill Development Mission. Supporting large-scale projects and fully integrated manufacturing plants under the ‘Make in India’ policies will be essential.

Economies of Scale and Cost Reduction

To achieve economies of scale, India must reduce manufacturing costs. This will enable strategic innovation and promote exports, boosting the overall competitiveness of the industry.

Global Trends and Manufacturing Clusters

The government should take cues from global trends by establishing integrated solar industrial clusters. This will foster better industry linkages, enhance manufacturing efficiency, and support innovation.

Impact of Global Competition

Some of India’s largest solar equipment manufacturers are facing financial losses due to competition from Chinese firms, which prioritize low-cost power over local manufacturing. Interestingly, prior to the National Solar Mission, Indian solar firms were focusing on OEM manufacturing and exports, generating billions in export revenues. However, with the entry of Chinese competitors, module prices fell sharply, resulting in a substantial market share loss for Indian companies.

Government Measures to Boost Domestic Manufacturing

To correct this imbalance, the government offers 20-25 percent capital subsidies and other incentives under the ‘Make in India’ campaign. The Viability Gap Funding (VGF) mechanism and GST relaxation (waiving 12% countervailing duty and 5% VAT on domestic solar components) aim to boost domestic solar production.

Future Growth Potential

According to government capacity targets, India’s annual solar module market could exceed $10 billion in the coming years. However, to avoid straining the power infrastructure, the government and industry must implement corrective measures.

Fostering a Sustainable Future

A ‘reduce, encourage, deregulate’ policy for power generation can benefit Indian manufacturing by ensuring cheap and readily available power. The government plans to spend Rs 210 billion ($3.1 billion) on India’s solar panel manufacturing industry, aiming to increase photovoltaic capacity and create an export-oriented sector.

India’s Renewable Energy Investment

In 2016, India accounted for 5 percent of the world’s renewable energy capacity, investing $9.7 billion (Rs 64,990 crore), according to the Renewables Global Status Report 2017 by REN21. Direct and indirect renewable energy jobs (excluding large hydropower) reached 8.3 million globally in 2016.

Challenges with Cheap Imports

Despite the growth, domestic manufacturers face challenges from cheap imports, with Indian firms accounting for only 13 percent of supply. The Indian Solar Manufacturers’ Association has called for safeguard duties on solar cells and modules.

Funding Challenges

Another issue plaguing Indian manufacturers is the lack of access to funding for building manufacturing units. Private banks remain hesitant to offer loans at attractive rates.

Favorable Government Policies

The government’s efforts, including DCR quota for government-based energy projects and financing support, have benefited domestic solar manufacturers. However, further support is needed.

Positive Outlook for Domestic Manufacturing

The Indian government is committed to supporting domestic manufacturing. Plans to release a new solar manufacturing policy with VGF subsidies will help Indian companies compete globally.

Solving Macro Challenges

To promote domestic manufacturing, India must address macro challenges such as:

  • Ease of doing business

  • Infrastructure development

  • Affordable financing

  • Reliable local raw material supply chains

Solving Macro Challenges

Promoting Private Investment

The Ministry of New and Renewable Energy encourages private investment by offering fiscal and financial incentives and allowing 100% foreign direct investment (FDI) in renewable energy.

Boosting Solar Inverter Industry

The solar inverter industry in India, still in its early stages, will expand as domestic solar module manufacturing strengthens.

Increasing Domestic Capacity

To meet annual solar targets, India must increase domestic manufacturing capacity. For reliable solar solutions, contact Hartek Group – your trusted partner in renewable energy. The DCR policy under the ‘Make in India’ plan supports this initiative, but more state-level mandates are needed to ensure sustainable growth.

FAQ’s:-

1. How does the ‘Make in India’ initiative support renewable energy?
The initiative boosts domestic solar and wind manufacturing through incentives, subsidies, and policy support.
2. What are the key challenges in India’s renewable energy sector?
Challenges include competition from imports, funding constraints, and infrastructure gaps affecting domestic manufacturing.
3. What government policies promote renewable energy in India?
Policies include Viability Gap Funding, GST relaxation, skill development programs, and incentives for domestic manufacturers.
4. How does renewable energy contribute to job creation in India?
The sector is projected to generate over 1 million jobs in solar and 1.9 lakh jobs in wind energy by 2022.
5. What is India’s target for renewable energy capacity?
India aims to scale up renewable power production to 175 GW by 2022, creating growth opportunities for manufacturers.

Falling Solar Tariffs Bring Opportunities Galore, But Present Challenges Too

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Driven by favorable factors like falling module prices, stable exchange rate, and lower cost of capital aided by a likely cut in interest rates, the per MW cost for solar is likely to drop by 10-12% this year, but matching timely execution with optimum quality will be a challenge for developers if these factors do not come into play.

rooftop solar panel

Impact of Falling Solar Tariffs

Falling solar tariffs have certainly buoyed the Indian solar industry, and solar installations are expected to grow at a rapid pace this year. The recent bid of Rs 2.97/KWh for the Rewa mega project has created a new benchmark for the solar sector.

Growth and Future Projections

We have already crossed 10 GW in terms of cumulative installed solar capacity, and another 8-10 GW is likely to be added this year alone. To achieve the ambitious target of 100 GW by 2022, 15-20GW needs to be added every year.

Key Factors Affecting Solar Costs

Most of the tenders have an execution period of 12-18 months, so the current tariffs are based on the upcoming installed cost of solar, which in turn depends on three major factors—module prices, cost of capital, and exchange rate.

Challenges in Execution and Pricing Pressure

In this scenario, the per MW cost for solar is projected to drop by 10-12% this year. This is a welcome sign for industry players, but it may also put tremendous pressure on them if these factors do not come into play.

Rising Demand and Industry Trends

We expect a lot more tenders for solar power, both in CAPEX and RESCO models, and an increase in demand from the industry. But this rising demand will be accompanied by a strain to reduce prices.

Struggles of Indian Solar Manufacturers

Indian solar module manufacturers, especially the smaller players, are finding it hard to compete. Moving forward, it is going to be very difficult for them to reduce prices as much as their Chinese counterparts.

Market Consolidation and Competitive Landscape

Cashing in on the fast-growing solar market, many small and medium players have forayed into this sector as developers or EPC companies in the last few years. Small developers unable to compete due to falling tariffs are being slowly phased out by larger companies.

Impact on EPC Companies

When it comes to large projects, EPC companies are also likely to face a similar scenario. On the other hand, the number of small projects (1MW or less) is expected to go up as the demand from the industry picks up, giving smaller companies a chance to be more competitive.

Importance of Cost, Time, and Quality in EPC Success

The expectations of reduced costs are rising with falling tariffs. Other than module prices, a reduction in Balance of System (BoS) costs is also expected due to better design of inverters, MMS, foundation, etc.

Challenges in Procurement and Project Management

Timely delivery of projects is another challenge for smaller EPC players. Issues in project management and logistics can result in delay, and developers pass on the heavy penalty to EPC players.

Quality and Skilled Workforce Constraints

Quality is an integral factor when it comes to operating solar power plants for 25 long years, efficiently, economically, and reliably. EPC players are under constant pressure to reduce costs and yet deliver optimum quality.

Increasing Energy Generation and Market Competition

With falling solar tariffs, developers will try to generate more energy to increase the Internal Rate of Return (IRR) and reduce the level of risk on the investment.

Benefits for Indian Consumers

But this is a great time for Indian consumers—industrial, institutional, and residential—to install solar power plants. For industrial consumers, grid parity was achieved in most of the state’s last year, and residential consumers are also likely to achieve it soon.

Financial Benefits and Payback Period

The levelized cost of solar electricity for an industrial consumer is now 25% less than the cost of grid power in most states. The savings from solar, combined with accelerated depreciation benefits, have reduced the payback period to less than four years.

Unrealistic Expectations from Falling Tariffs

One of the drawbacks of falling tariffs for consumers is the unrealistic expectations they create about the cost of solar installations. The tariff of Rs 2.97/KWh in Rewa is for a 250-MW project.

Growing Interest and Future Prospects

Nevertheless, we are witnessing a heightened interest from our industrial customers. We are also working on a special product specifically for residential consumers as we anticipate a spike in demand from the residential category as well.

Vast Project Pipeline Govt Impetus Will Propel Solar Power into High-Growth Trajectory Next Year

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The power sector is growing at a rapid pace to cater to the ever-increasing requirements of a fast-developing economy, and it is solar power, which is setting the tone for this unprecedented growth, emerging as the fastest growing energy source in India. With more and more developers pumping in huge money to line up one mega solar power project after another and the government providing the much-needed impetus to achieve the 100-GW target, the solar sector is growing by leaps and bounds. Backed by a project pipeline of more than 20 GW, this upward trend will pick up momentum in 2017.

India’s installed solar capacity recently crossed the 10-GW mark, a milestone that should act as a stimulus for unprecedented capacity additions in years to come. Far exceeding the growth projections of leading market analysts, solar power generation has more than doubled in the past one year, and it will not come as a surprise if the installed capacity records a threefold increase by the end of next year.

In fact, the way things are shaping up, especially in southern states like Telangana, Andhra Pradesh and Karnataka and traditionally well-performing states like Madhya Pradesh and Rajasthan where many big projects are coming up, we may soon see the volumes growing exponentially. No wonder, India is all set to emerge as the world’s third largest solar market next year, after China and USA.

The coming year will also witness the execution of many large solar parks. Encouraged by an enthusiastic response from the private sector to the solar park scheme, the government is planning to double this capacity from 20 GW to 40 GW.

solar power energy

Going by the constantly declining tariffs, which have now touched the Rs 3 per unit mark, we are likely to achieve grid parity in 2017 itself, thus preparing the ground for high-trajectory growth. With costs of solar panels declining steadily and states like Haryana and Telangana coming up with favorable policies, the rooftop segment is also expected to grow phenomenally in 2017. Better implementation of net metering regulations and disbursal of subsidies, coupled by the renewed focus on increasing rooftop solar deployment on government buildings, will give further impetus to rooftop solar across all consumer segments.

As the industry introduces more and more cost-effective solar PV technologies, off-grid solar opportunities are also poised to grow proportionately. But to ensure that the gains are not offset by the introduction of GST, we expect the government to exempt the solar sector from this tax. We also expect the government to make the solar industry more competitive by providing incentives to domestic module manufacturers and setting aside substantial funds for conducting R&D in more efficient and cost-effective solar technologies so as to reduce dependence on imports. A steep hike in import duty should be affected to prevent cheaper modules from flooding Indian markets.

But all the progress on the solar front will come to nought if we do not upgrade our transmission lines in sync with the heavy doses of solar power being injected into the grid. Preparing for the challenge, the government is in the process of setting up special green energy corridors for the smooth evacuation of solar power, which will be one of the major focus areas in 2017 with eight such transmission corridors coming up across the country.

We will see more and more states constantly upgrading the grids and coming up with new ones to match the outflows created by new solar projects, much on the lines of Andhra Pradesh which has a parallel plan on T&D ready for every solar project. The process has already started in states like Telangana, Punjab, Rajasthan and Madhya Pradesh, which are also stepping up efforts to upgrade grid infrastructure. These developments will give a much-needed boost to the solar EPC industry, bringing new opportunities for up-and-coming companies like Hartek Power.

The favorable business environment will translate into cheaper finance options with banks, financial institutions and funding agencies vying to attract investors. Lower financing costs will only add to the financial viability of solar projects, which many still view as a costly business proposition. With India leading the International Solar Alliance from the front, the government is likely to back the initiative by floating special funds for solar energy and introducing financing measures like clean energy fund, generation-based incentive-linked loan repayment and green bonds to facilitate project developers looking for suitable funding avenues. Requiring an investment of at least $100 billion to get to the 100-GW target, India will also step up its efforts to rope in international funding agencies for more capital.

Considering the pace at which solar projects are coming up, operation and maintenance will be another major thrust area for the Indian solar sector in 2017, opening the doorways to new opportunities for solar solution providers like Hartek Group, which specialises in operation and maintenance as part of its integrated services and solutions. After all, solar plants have to last a good 20-25 years, for which their maintenance on a quarterly basis becomes absolutely necessary.

Last but not the least, solar energy will continue to empower the New India by lighting up many more off-grid remote areas with rooftop plants and generating thousands of jobs. Solar energy holds the key to India’s sustainable and long-term growth, and the growth story has just begun.

Govt Must Act as a Catalyst to Unleash Residential Rooftop Solar Potential in India

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India’s Rooftop Solar Industry: A Promising Future

Chasing a stiff 2022 target of 40 GW, India’s rooftop solar industry is finally coming into its own. Registering a phenomenal growth of 113 percent over the past year, the country’s rooftop solar capacity recently crossed the 1-GW mark. This milestone should inspire the industry to give a much-needed impetus to this nascent segment and set the pace for unprecedented capacity additions in years to come.

Favorable Policies Driving Rooftop Solar Growth

Rooftop solar in India has everything going for it—favorable government policies, streamlined processes, an efficient regulatory mechanism, and an investor-friendly business environment. However, achieving the 40 GW target will require decisive measures and enhanced growth strategies.

Commercial and Residential Market Potential

While the commercial and industrial categories are driving much of the growth, accounting for 63 percent of the installed rooftop solar capacity, it is the dormant residential market that holds enormous potential. Hartek Group believes that if even half of India’s 205 million households install rooftop solar projects with an average capacity of just 2 KW, the country can achieve 20 GW capacity quickly.

Boosting Rooftop Solar

Government’s Role in Boosting Rooftop Solar

The government can act as a catalyst for growth by introducing:

  • Incentive-based mechanisms

  • Formulating effective policies

  • Mandating solar PV installations on all residential buildings

Successful State-Level Policies

More states should follow the Delhi government’s example, which offers a generation-based incentive of Rs 2 per unit (kWh) to residential consumers, over and above the central government capital subsidy of 30 percent. The Delhi government has also allowed third-party solar developers to install solar PV plants, easing the process for residents.

Net Metering: A Game Changer for Rooftop Solar

A well-thought-out net metering policy can significantly impact the growth of rooftop solar. It allows households to:

  • Save on electricity bills

  • Earn from the power they produce

Through net metering, residents can source supply both from the grid and their solar PV plants. If one source stops, the system automatically switches to the other. Reverse net metering is another attractive option, enabling consumers to send excess electricity back to the grid and get remunerated. However, the lack of proper implementation is hindering its potential.

Challenges Facing Residential Rooftop Solar

The major roadblocks hindering growth in the residential rooftop category include:

  • High upfront costs of solar systems

  • Lack of financing options

  • Poor awareness levels

  • Difficulties in operation and maintenance

residential rooftop category

Cost of Rooftop Solar Systems

While the cost of rooftop solar has been progressively declining at a rate of 12% per annum over the past four years, a typical 1-KW solar system without battery costs around Rs 65,000-70,000 with a 30% subsidy. Since solar modules account for 60 percent of a solar PV plant’s cost, the development of cheaper modules and economies of scale will make rooftop solar financially more attractive.

Financing Challenges and Solutions

A major challenge for homeowners is the lack of low-cost financing. Banks and financial institutions should offer low-interest loans for rooftop solar projects, making it as simple as applying for a car or home loan.

Need for Increased Awareness

The lack of awareness about the benefits of rooftop solar also limits its adoption. During solar awareness drives, it was observed that only a small fraction of people knew how rooftop solar projects could:

  • Save on electricity bills

  • Provide assured returns

  • Offer 30 percent subsidies to domestic consumers

To bridge this gap, the Ministry of New and Renewable Energy (MNRE) has introduced a centralized online facility that enables consumers to apply for rooftop solar installations with ease.

Skill Development and Workforce Training

Another issue is the lack of skilled manpower for installation, operation, and maintenance (O&M). While the commercial and industrial categories have sufficient technical manpower, the residential category lacks adequate support.
To address this:

  • A large technical workforce should be trained in solar installation and O&M.

  • Companies like Hartek Power are introducing portable 1-KW and 2-KW kits that simplify installation, making it as easy as installing a satellite dish.

Rooftop Solar for Rural Electrification

Since 70% of India’s population resides in villages, rooftop solar can play a significant role in electrifying rural and remote areas that are not connected to the grid.

  • Decentralized cluster power generation can reduce transmission costs in sparsely populated villages.

  • Rooftop solar offers a cost-effective solution to electrify regions where grid connectivity is challenging.

Rooftop Solar: Powering a New India

By empowering rural India with reliable electricity, rooftop solar is doing what the government alone could not achieve. For reliable rooftop solar solutions, contact Hartek Group – your trusted partner in renewable energy. It is lighting up homes that previously had no access to electricity, creating a foundation for a self-sufficient and sustainable India.

FAQ’s:-

1. What is the current rooftop solar capacity in India?
India’s rooftop solar capacity recently crossed the 1-GW mark, growing by 113% in the past year.
2. What are the key challenges for rooftop solar in India?
High upfront costs, lack of financing, poor awareness, and inadequate technical manpower hinder growth.
3. How does net metering benefit rooftop solar users in India?
Net metering allows users to save on electricity bills and earn by sending excess power back to the grid.
4. What government incentives are available for rooftop solar in India?
Residential consumers get a 30% subsidy, and some states offer additional incentives like generation-based rewards.
5. How can the residential rooftop solar market in India grow?
Increased awareness, low-interest loans, policy support, and simplified installation can boost adoption.

Smart Grid Manufacturer: The Missing Link in India’s Solar Chain

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Enhancing Solar Power Transmission: The Role of Smart Grid Manufacturers

India’s Rapid Solar Growth and the Need for Efficient Transmission

Buoyed by the positive response from the industry and the proactive approach adopted by various state governments, India is now making rapid strides in the solar segment. The country’s solar power generation has increased 14 times in just five years, from 0.5 MW in 2011 to 7 GW today. As a result, the revised solar target of 100 GW by 2022 looks distinctly achievable. However, despite abundant sunshine throughout the year, India’s transmission infrastructure is not keeping pace with the rise in solar power generation.

System Smart Grid Power System

Bridging the Transmission Gap to Avoid System Collapse

If left unaddressed, the widening gap between power generation and transmission infrastructure could put immense pressure on existing transmission lines, potentially leading to system failures. Our transmission networks are not yet equipped to handle the large influx of solar power being injected into the grid. Given the high stakes in the solar sector, breakdowns must be avoided at all costs. This highlights the importance of upgrading transmission and distribution (T&D) lines in states adopting large-scale solar projects. Hartek Group, as a leading player in the power infrastructure sector, is committed to bridging this gap by delivering cutting-edge transmission solutions and smart grid technologies.

The Critical Role of Smart Grid Manufacturers in Solar Integration

Smart grid technology is the key to ensuring efficient power transmission and distribution. A smart grid manufacturer plays a crucial role in modernizing India’s energy infrastructure by integrating advanced grid solutions that optimize solar energy flow. The adoption of smart grids can significantly reduce transmission losses, improve grid stability, and enhance overall energy efficiency.

State-Level Initiatives: Lessons from Punjab and Andhra Pradesh

Punjab, which is on track to achieve 1 GW of installed solar capacity, faces challenges due to its outdated T&D infrastructure. To accommodate this additional power load, the Power Grid Corporation of India Ltd has been tasked with building separate transmission lines. However, the responsibility of intra-state grid expansion lies with local governments. On the other hand, Andhra Pradesh sets a noteworthy example by planning its T&D upgrades parallel to its solar expansion, ensuring a smooth transition to renewable energy.

Addressing T&D Losses with Smart Grid Solutions

India’s existing transmission capacities remain inadequate, leading to significant energy losses due to inter-state transmission congestion. Millions of kilowatt-hours of electricity are lost, making solar power generation a less viable proposition. While efforts are underway to upgrade substations and T&D lines, a large-scale adoption of smart grid solutions can further enhance energy efficiency, reduce losses, and provide a seamless integration of renewable energy sources.

Investing in Grid Infrastructure for Sustainable Solar Expansion

To accommodate increasing solar power generation, India must continually upgrade its grid system. A phased transition from 440 KV to 765 KV and eventually to 1,200 KV will enable effective distribution of power to energy-deficient regions. Similarly, lower-level upgrades from 66 KV to 132, 220, and 440 KV should progress simultaneously. Collaboration with smart grid manufacturers will ensure that modernized grid infrastructure supports renewable energy expansion.

Conclusion: Strengthening India’s Renewable Energy Future

For India to truly harness its solar potential, urgent investments in T&D infrastructure and smart grid technology are essential. Strengthening the power grid through cutting-edge innovations and strategic planning will not only prevent energy losses but also contribute to a more stable, sustainable, and efficient energy future. By integrating smart grids, India can ensure that every unit of solar energy generated reaches its intended destination, maximizing the benefits of renewable power generation. Hartek Group is at the forefront of this transformation, offering advanced solutions to enhance grid efficiency and reliability. Contact us today to learn how Hartek Group can help power a smarter and greener future.

FAQ’s:-

1. What is a smart grid manufacturer’s role in solar power?
A smart grid manufacturer develops advanced grid solutions to optimize solar energy transmission, reduce losses, and improve efficiency.

2. How do smart grids help in solar power integration?
Smart grids enhance grid stability, reduce transmission losses, and ensure efficient energy distribution from solar power plants.

3. Why is smart grid technology important for India’s power sector?
It modernizes transmission infrastructure, prevents power failures, and supports India’s growing renewable energy capacity.

4. What challenges does India face in solar power transmission?
India struggles with outdated T&D infrastructure, leading to transmission losses and grid instability, requiring smart grid upgrades.

5. How can smart grid manufacturers improve energy efficiency?
By integrating real-time monitoring, automation, and AI-based energy management systems to optimize power flow and reduce waste.