“India should launch its own innovations for cost effectiveness in solar energy”
Gaurav Aggarwal, Vice Chairman of Sainik Industries Private Limited, elaborates on the need for targeted incentives, in-house resource generation for solar equipment manufacturing and cost innovation to promote solar energy in India.
TPCI: What, in your opinion, are the factors that are responsible for the rise in the use of solar roofs in India?
Gaurav Aggarwal (GA): The rooftop solar market holds huge growth potential across India and should be exploited to help meet the growing energy requirements of the population. Rooftop solar PV can meet the electricity needs of consumers in various ways, whether it is general electricity use, use for cooking and for vehicles etc.
Solar roofs are a source of clean and green energy that keep the pollution level to almost nil, help in reducing carbon footprints, save costs in terms of only one time investment with no recurring cost and have a lifespan of almost 25-30 years. They are an easily accessible source of energy in remote and village areas also where grid connectivity is not possible, supported by Government in terms of giving subsidies to installers. They are very well suited for Indian climate, which has almost 300 sunny days and no additional space requirement to install it.
TPCI: What is the investment scenario for this sector, and how can it be improved further?
GA: Recently, India achieved the third rank globally for solar installation capacity. Despite that India is facing challenges attracting investment in this sector because it requires upfront high investments and a host of risks, such as policy and regulatory risks, perceived risks, & technology-related risks. Risks generate lot of uncertainties and hence, further compound the availability of required investment in this sector. As per the Government’s policy of low tariff for renewable energy, the investors do not get attracted towards this sector. Apart from that, the dynamic nature of solar rooftop technology, scepticism always prevails among the minds of investors about the assets (plant and machineries) being stranded in future. So, these are some of the risks that distract investment in this sector.
In order to attract more players in this sector, the government should act as a facilitator and devise innovative policy mechanisms not only in terms of introducing innovative financing instruments, but also creating a conducive environment, which minimizes the associated risk factors. The government should give more incentives to the investors as well as the ultimate consumers to adopt this technology of clean energy.
TPCI: How do you view India’s potential to lead global adoption of solar technology and possibly even emerge a major international player in theis sector?
GA: There are few very important lessons that India can learn from its international counterparts in the adoption of solar roof technology. As time is of the essence, if more and more projects of solar rooftop in India get completed in a timely manner, it can cut its major expenditure on fossil fuels to generate electricity. As technology advancement is an ongoing process, Indian industries should also focus more on innovations in this field of solar roof top to make it more cost effective as well as efficiency effective, like its international counterparts. Also, India should learn techniques of less wastage in generation and supply of electricity from its counterparts like Germany and Australia.
In order to leap ahead of curve, India should bring more of its own innovation and researches in the field of solar ahead of other counterparts to make it more cost effective, as it has done it in the field of space aeronautics. Apart from that India should also focus on in-house resource generation for solar equipment manufacturing instead of depending on other international players.
TPCI: What are the challenges that MSMEs in India face when it comes to scaling up on solar rooftops?GA: Certainly there are operational, technical, financial and awareness barriers to scaling rooftop in MSME sector in India. Despite all these different types of barriers, the financial barrier is the major one that affects the scaling up of rooftop solar. All MSMEs will have to compete with large entities that have robust credit profiles to adopt rooftop solar and the installation of solar system requires high upfront investment. Due to low creditworthiness, MSMEs generally lack in getting loans at concessional interest rates which, in turn, brings other barriers in picture, say proper knowledge of installed plant and machinery, reluctance to invest in training staff and maintenance staff, etc.
In order to eradicate these barriers, the government should take more steps to educate MSMEs about its schemes, and provide them more finance options at concessional interest rates so that they can go for latest technologies in the rooftop solar field, promote MSMEs to have active participation in Government tenders etc.
TPCI: How can policy intervention accelerate growth for the sector?
GA: The Government is doing very good to fillip this sector, as during the last 5 years, it has already put more of its resources towards this sector. In order to boost it more, the government is projected to give subsidies of upto US$ 3.3 billion for scaling up the solar rooftop installations in the country under Sustainable Rooftop Implementation for Solar Transfiguration of India (SRISTI) Scheme.
In order to promote this sector it is advisable that the Government should run awareness programs on such an extensive level to promote this SRISTI scheme so that more and more people get inclined to use this clean source of electricity. Government should setup training centres to train the consumers as well as more entrepreneurs to adapt these future technologies of energy generation. As the ultimate consumer gets education about these technologies, his trust will build up and ultimately demand for solar rooftop will rise.
TPCI: How has the supply of solar rooftop owing to the supply chain disruption due to China badly hit by COVID-19? When do you think Indian industry can substitute the manufacturing of solar rooftop equipment?
GA: The COVID-19 outbreak in China as well as in whole world has posed more concern for both domestic solar developers as well as module OEMs, due to ongoing disruption in the supply chain for key components used for manufacturing of solar modules. All imports from China have been put on hold and as China is the biggest player in key solar components, it is definitely affecting the supply of solar rooftops in India also.
This is the high time for Indian industries to emerge as the substitute for manufacturing of solar equipment. As there is huge demand of solar equipment in the Indian domestic market itself, it can give Indian industry a push or say a boost to reduce its dependence on Chinese or foreign equipment.
Gaurav Aggarwal is a Chartered Accountant and Company Secretary and in the business from last 11 years. He is the Vice Chairman of Sainik Industries Private Limited, a trusted name in the business of Solar products. The company is executing various Government contracts related to Solar Rooftops, Solar PV Home lighting systems, Solar Street lights and EPC contracts of solar power plants on pan-India basis viz. Assam, Uttar Pradesh, Bihar, Uttarakhand, Jharkhand, West Bengal and many more.