Imports from China can always be blocked with anti-dumping duty

India's largest vertically integrated solar energy solution company, Waaree Solar, is now expanding its wings to the overseas markets. Sunil Rathi, Director (sales and marketing), Waaree Solar, spoke to Bizz Buzz on how far the solar manufacturing/EPC industry has come and the adverse impact Chinese manufacturers have had in India  

You have been associated with the solar manufacturing for over a decade. What kind of industry growth have you seen for solar over the years?

For Waaree, I can say that we started manufacturing in 2008, with a very small capacity of 30 Megawatts, and today we are at 2 Gigawatt. With the time, policies, customers and the passion for solar, we have grown to this level. As an industry also, solar manufacturing has sufficiently grown from a very small Megawatt to Gigawatt journey in India. Now, there are more than 19 Gigawatts of model manufacturing capacity available within the country. At present, the sector is going through a very big turmoil. However, the government backing and Make In India initiatives will support the domestic manufacturing. Unfortunately, the policies only support to the extent of SGDs which are not enough to go into the market. The actual industry utilisation capacity is much below even 50 per cent.

What are some of the biggest challenges this sector is facing in the country?

I can say that there is lack of visibility. The government has to create market for domestic manufacturers. Usually, what you say 'in-house' market is dedicated for domestic manufacturing. That will bring support not just to the existing manufacturing but also boost initiatives like Make In India, Atmanirbhar Bharat and Skill India.

The Modi government is focusing on Atmanirbhar Bharat. It has also launched the production-led incentive (PLI) scheme to boost solar equipment manufacturing in the country. Are these initiatives enough to check Chinese imports in this segment?

Chinese imports can always be blocked with the anti-dumping duty. Anti-dumping duty and basics customs duty (BCD) are the only solutions going forward to support the domestic manufacturing.

What more should the central government do to encourage the sector?

My expectation from the government at this point of time is that they should create and promote a market for domestic manufacturing, and create an entry barrier for the imports by imposing an anti-dumping duty or BCD with immediate effect.

Solar power tariffs have drastically fallen in India recently. Will this make new solar plants unviable?

Anything cheaper is better. I think in India, every other power company has to meet the solar parity. So, coal has to meet the solar power prices, or any other source of energy has to meet the solar parity. Earlier, solar had to meet the grid parity, so five years down the line we should talk about grid cost and solar cost on an equal level. The aggressive bidding is based on certain assumption of the tariff down, with the assumption that they can freely import modules because of change in laws it is viable option. Two tenders happened with the same prices, which show that this is a viable price.

What was your total revenue in the financial year 2019-20 (FY20)? What revenue growth are you expecting this fiscal year (FY21)?

Last year we were over Rs 2,000 crore (in terms of revenue generation). I cannot comment on exact figures. In spite of Covid-19, this year also we are looking at similar figures. We are focusing on the international markets as well.

Your company recently bagged a $105-million order for solar modules from a US-based developer. What kind of overseas market share are you aiming at?

Traditionally, we've been able to achieve 20-30 per cent of our revenue from the overseas markets. And going forward, we want to gradually increase our export revenues to 40-50 per cent.

You have multiple plants now. Do you have any plans to expand your manufacturing capacity and set up plants in other States?

Since we are into module manufacturing, we are looking into expanding. We are also getting into cell manufacturing. However, all our investments (plant expansion) will be in Gujarat only.

PM KUSUM scheme is getting a greater push by the central government. Do you think it has any scope of further upgrading to make it more popular?

It is very popular in Rajasthan right now as well as gaining popularity in Gujarat. It is spreading all over the country. Maharashtra is also getting into KUSUM Yojana in a big way. I think the yojana is currently gaining good momentum.

What kind of installation capacity are you targeting in 2021-22?

We are into EPC or manufacturing, and at present we are a 2-Gigawatt company and should be able to reach to good numbers. It is difficult to quantify the numbers because we too were affected by the lockdown. So, by the end of Q4r, we should be able to estimate.

Due to the lockdown, we lost one month of production in 2020. Many sites were closed due to low demand and less cash flows. Currently, prices of raw materials from China have increased, which has made (solar) projects unviable. It was a very bad year for the industries as well. The industry has never faced such a challenge in the last one year. Prices of steel and modules have gone up and projects are bided at low price, low tariff because, I think, nobody anticipated such a situation. MNRE report also states that less than 5 Gigawatts were installed in the 2020 calendar year.

So, what do you think will be the recovery time for these losses?

I think 2021 looks rather positive. In terms of trading, Covid is more or less in control in India and things are returning to normalcy. We are also ahead on vaccination now and have an aggressive plan so I'm sure by end of Q1 of 2021, lot of things will be under control and everything will resume by May. If you look at the government's plans, exams (Class 10, 12) have also been scheduled in May. Overall, there is a huge demand for solar worldwide. Post lockdown, people in the world are also looking for alternative supply chain and India has better option for them and not being dependent on only one country. It gives opportunity to India to serve the global demand (for solar manufacturing).