Que: How do you see India's progress in the solar industry over the last 10 years?

Ans: Over the last decade, India has witnessed multiple substantial positive steps being taken towards transforming it into a solar-reliant country. The Government has provided considerable support in this regard, through special policy frameworks like the National Solar Mission. As part of the National Action Plan on Climate Change, the National Solar Mission was an initiative undertaken by the Government of India to promote solar power in the country. The renewable energy target is currently set at 175 GW, with solar energy’s contribution being 100 GW towards the goal. As of March 2019, the solar industry has fulfilled 28% of the requirement, which is four times the growth that the country has witnessed in the last three years. The much-awaited 25% safeguard duty has helped domestic manufacturers by creating a level playing field for them in the international and national markets.

Que: Do you believe that the safeguard duty on solar has delivered the intended benefits?

Ans: The safeguard duty has provided the much-needed respite to domestic manufacturers to handle the competition from international counterparts. However, the duty has only been imposed on modules from select countries like China and Malaysia. The positive effects that the duty could have had on the industry have been reduced by rerouting of these modules through other countries like Thailand and Vietnam, where no such duties are imposed. For the domestic industry to grow, it is of utmost importance for the Government to levy anti-dumping duties on imported modules from these countries. Furthermore, the anti-dumping duty on glass and EVA sheets has posed as a huge roadblock for the domestic manufacturers by disrupting the business. The current challenges faced by the domestic industry are primarily a result of pricing issues, rather than quality concerns, since Indian products are at par with international counterparts.

Que: Waaree Energies recently announced that it will be looking at Rs.400 crores revenue from the solar rooftop in FY 2020. Please share more details with Energetica India readers on your rooftop plans.

Ans: In the solar industry, perhaps the largest contribution to the solar target is being made by the rooftop solar segment. A recent study by the Institute for Energy Economics and Financial Analysis (IEEFA) has found that the segment has increased by a CAGR of 115% between 2012 and 2018. The report also estimates that the segment will grow by approximately 50% within the next three years. The sector has witnessed growth in both commercial and residential segments, but the progression is slower in the latter. The government recently announced a 30% subsidy for residential rooftop systems, which has come as a positive step to promoting solar adoption in residential establishments, as well. The industry expects the rooftop segment to contribute up to 40 GW to the end goal by 2022.

We provide a range of innovative solutions such as flexible modules and DIY kits, which can be customized as per the requirements of the consumers. This is the kind of innovation that is going to drive the future of the rooftop segment in India.

Que: How has GST impacted the Indian solar industry? The high court has recently asked the GST panel to relook at the request from Solar Power Development Association. What has gone wrong with the GST w.r.t the solar industry?

Ans: Initially, the solar industry was deeply impacted by the varied GST implementation. Each state ruled differently on the GST rates for solar power generated systems, and hence, companies had to pay different tax rates in various regions. This instability in rates has resulted in large scale confusion regarding costs, and thereby, stalled and dissuaded major projects in different parts of the country.

The government took note of this issue and December 2018 was marked by the GST council’s meeting to discuss the tax rates on solar power generating projects. The recommendations suggested by the council state that 70% of the contract will be taxed at 5% and the remaining 30% by 18%, providing an effective rate of 8.9%. In the pre-GST era, the solar industry observed a tax rate of around 1.5%-2% which is considerably lower than the current situation. The Solar Power Development Association, therefore, requested a review of these recommendations as the higher tax rate has had a detrimental effect on the industry, just as the earlier confusion in rates did.

It is disheartening for solar players like us to see that even after all these years of GST being levied, we are still unsure of the rates applicable to us. This lack of clarity and delay in decision making is causing a slowdown of projects across the country, which is making it significantly difficult for the industry to meet the 2022 goal of 100 GW.

Que: How does Waaree Energies look at opportunities in India's EV sector as a solar manufacturer and an EPC player?

Ans: The implementation of the FAME II scheme with a budget of 10,000 crores over merely three years from 2019-20 to 2021-22 depicts the nature of the government towards e-mobility. With such massive funding from the government, the growth of EV adoption in the economy will be a definite success. However, batteries have always been a matter of concern for EV manufacturers, as well as the end-users. The life of the battery determined the limits on the usage of EV, and therefore, may not necessarily have the environmental effect it intends to have. Solar modules can be a solution to this problem but are also accompanied by a different set of problems. Traditional modules are heavy-weight, and are usually only apt for stationery application, since using them in moving vehicles would result in minor cracks, lowering their power-generating capacities. However, at Waaree, the modules we manufacture for the EVs are specially designed to be light-weight, flexible, and customizable for a range of vehicles. Thus, we provide a unique solution to energy requirements for EVs. With an increase in government initiatives to promote adoption of this alternative mode of traveling, Waaree sees a huge untapped potential in the sector, for our growth, and for propelling our goal to make India a solar-reliant country.

Que: Can you please share an update on Waaree's off-grid solar products (solar lights, solar chargers, etc.)? In all the focus on utility and rooftop, we have not known much about how Waaree is performing at this end of the solar spectrum?

Ans: The rooftop segment in the industry is an extremely lucrative option for us in terms of business, wherein there is a scope for the monetization of dead assets. The projected growth rate in the segment for the next 3 years is almost 50% in the industry, and therefore, Waaree is currently more focused on making our rooftop presence stronger in the market. Our utility products like off-grid inverters, flexible modules for EVs, and DIY kits for residential establishments, have also contributed significantly to our growth story. While Waaree has dipped its toes in off-grid solar products as well, the major chunk of its operations and sales are driven by the rooftop and EPC part of the solar spectrum.

Que: Does Waaree Energies have plans for vertical integration, in terms of solar cell manufacturing?

Ans: Waaree Energies is India’s largest PV module manufacturer, and maintaining that position in the market is our primary focus. Through constant research and development, we have launched various innovative modules for residential rooftops, as well as automobiles, among others. Waaree has also recently launched off-grid inverters catering to a wide range of both commercial and residential establishments. While we might look at cell manufacturing in the near future, currently, it is not a part of our strategic plans. Instead, we are focused on expanding our franchisee presence in more countries and introducing our current repertoire of products and services to a larger region of the country.