pv magazine: Rooftop solar is a big market for REC. What is your position on rooftop installations in India?
Milan Koev: REC globally is known for its strong footprint in the solar PV rooftop market, and we have continued to add more customers in that segment. The company is actively diversifying its geographical reach, as well as enlarging its customer base, leading to 66% more customers in Q1-Q3 2017, compared to the same period in 2016. In India, rooftops are the focus area, already comprising half of our shipments to the country and growing most swiftly. The C&I [Commercial and Industrial] segment remains key to us and residential is slowly picking up pace as well.
For a captive consumer who is looking for a reliable and consistently high performing system, REC is a natural choice, as we have one of the lowest warranty claims (well below 100 Parts Per Million) along with the highest watt classes in the Multi PERC technology segment.
Though the targets set by the government of 40 GW grid connected rooftops by 2022 currently looks unrealistic, it’s only a question of time when this pace will grow exponentially as for most of the C&I customers the question to ask is no longer “Why solar?” but “When? & How much?”.
India is considering revising its solar rooftop target, from 40 GW to 20 GW, which is still a bold goal. With 1.7 GW of C&I rooftop installations already complete, do you think it is a good time to ramp up your presence in India?
The rooftop market is an organic one, it cannot have a top-down approach like the utility side where the government can deploy a lot of ways to push it. Here the growth will peak once end consumers are educated on the clear business case, the ROIs [Return of Investments] are definite and the pay-backs shrink. And this is exactly what’s happening in the market now, where you see that curiosity is consistently getting converted into demand.
At REC we are very clear that we are a significant player in this attractive market and cater to customers who care about quality and high performance, and also understand that solar is a long-term commitment of 25 years where reliability plays a key role.
How about installations in the residential sector? What is your strategy for this market, do you think it is valuable for REC?
India is a vast country with huge potential in the residential side. There are different categories of customers in this segment, which differ vastly in their preferences. The good change is that solar is something that has caught the fancy due to a lot of government visibility in the last few years. Though for the market to really pick up is still some time away, but according to our internal estimates and external forecasts this should happen by 2019.
Customers with available space on roofs and in the high-income category would be the first to adopt solar, as it makes a good business case for them. As residential tariffs are tied to the consumption level, and higher slabs have higher tariff rates, the annual electricity bills spiral due to central air-conditioning for summers that now lasts for almost nine months. We have clear strategy to reach the end-consumer in this segment, with our distribution partner Redington.
How do you compete with Chinese module manufacturers, who offer cheaper prices than other Indian or European manufacturers?
By not competing on price! We are educating, informing and making the end consumers aware of the technological differentiation and unique partnership approach of REC. As more customers opt for solar for commercial reasons, we become the natural choice for those who are looking at the lowest LCOEs with a proven track record in the Indian conditions, and coupled with one of the lowest degradation and warranty claim rates, the customers feel completely convinced because their investments are secured.
Our approach has been confirmed by our numbers, as we have grown at 150% CAGR [Common annual growth rate] in the last three years and have a whopping 85% customer retention rate in India.