India has taken the title of the world’s lowest-cost solar electricity producer. Do you see costs going down further?
Solar power tariffs are firming up. At one point, they dropped to INR 2.44 ($0.03)/kWh in 2017. Now they are back to the range of INR 2.60-2.65/kWh. Considering that there are limited areas with good radiation that are near Power Grid Corp. of India’s substations – and that there are evacuation constraints in those areas – it will not be easy to reach those INR 2.44/kWh numbers again soon. As you might be aware, the interstate transmission system (ISTS) charges waiver is only applicable until March 2022. Once that goes away, tariffs will further increase.
How are global developments, particularly the U.S.-China trade war, impacting the Indian solar market? And what can India do to make the most of it?
The basic fact is that India is not competitive in terms of costs when it comes to manufacturing solar modules, all of the trade barriers, or the U.S.-China trade war, are not going to change the basic equation much. However, from a developer’s perspective, we are subjected to increased foreign exchange risk, which impacts projects in the pipeline.
Which sectors in India offer the greatest growth potential?
We are looking at new forms of renewables which are starting in India. Now, we are starting to see floating solar, offshore wind, hybrid wind-solar, and then, also coupling with storage. With the increased penetration of renewables into the grid, there is a need for energy storage to manage intermittency. Solar Energy Corp. of India has already come up with a large renewable energy-linked storage tender – we foresee many such tenders to be rolled out in near future.
What is your strategy to claim the market?
Being one of the leading developers in India, we are evaluating all the aforementioned technologies. In terms of evaluating new technologies, we do thorough due diligence and make our moves where we foresee techno-commercial viability, and in this process we are fine in taking some reasonable risks to gain early mover advantage.
The global market for solar trackers grew by 20% in 2018, as the Middle East emerged as the top growth market, with a year-on–year expansion of 96%. How do you explain what is happening in India?
In India, the tracker market is down significantly. For the last two years, the tracker market has seen little growth. The primary reason for this is the drop in PV module prices. Now, oversizing leads to better levelized cost of electricity (LCOE) than tracker systems. That’s the reason why, for the time being, nobody is installing trackers in India. Things may change, however, once there is more large-scale adoption of bifacial technology.
What are ReNew Power’s requirements in selecting products? How do you determine which partners you work with?
We largely look at the state of technology, standard features and long-term value that the product creates for us. While evaluating our partners, apart from techno-commercial attractiveness, we evaluate their credentials and experience, execution, O&M capability – and obviously, quality.
You have selected Arctech Solar as a partner over other manufacturers, with almost 500 MW of capacity built using its trackers. Why have you chosen the company for most of your projects?
As a matter of fact, Arctech Solar is one of the worldwide leaders in tracking solutions. At that time, [the] value proposition really suited us. And that’s the reason why we went for them.
Since prices of mono PERC and other high-efficiency modules have come down dramatically in recent years, Arctech Solar has also received many inquiries for the tracker plus high-efficiency module combination. Do you think it will be a technical trend in the Indian market?
The entire supply chain worldwide is shifting towards high-efficiency mono PERC and bifacial modules. These technologies will be dominant in the upcoming years, also in India, as we will be following the global trend.