We are speaking just days after the Parliament was informed about the strides in India’s renewable energy capacity. Given the trajectory of annual 50 GW of capacity addition and other policy impetus, how well are we positioned to hit 500 GW by 2030?
500 gigawatts is a target that we have to achieve. It is achievable, but I would not say it is an easily achievable target. There is a good stretch in that target. From an overall renewable perspective, if you consider a 75- 25 per cent split between wind and solar, it will translate to somewhere around 40 to 45 gigawatts of solar power addition every year till 2030, do we have the capacity and capability to do that? We have, from a manufacturing perspective, if you look at the total amount of gigawatts that are available in the MNRE database, it is well above 45 gigawatts. So is it a target which is achievable? It is achievable. As a country, we would need to concentrate on the availability of land, the capacity of the grid and the evacuation of power that needs to be concentrated on.
If we talk about Solar particularly, the journey from 2.82 GW in 2014 to 85.47 GW to now in 2024 - Can you provide an overview of your company's journey and its impact on the solar energy sector in India?
Waaree has been one of the early adapters or a company which has gotten into the renewable space, much ahead of the game where renewable was not as fancy a word as it is right now. Our journey started in 2007 and it's almost now has two decades of experience behind the belt all the way from a few kilowatts of production capacity to two megawatts and then to Two gigawatts. The number of technological changes that have happened. Waaree has left an indelible mark on India's journey in solar.
What about the operational capacity as of now, the capacity under construction and any other developments on this front, if any?
The operational capacity as of now in Gujarat is 12 gigawatts and in Greater Noida, we have another 1.3 gigawatts. So it's about 13.4 gigawatts across the country, and in the United States very soon we should be commissioning, another 3 gigawatts of factory.
What are the biggest challenges you face as a solar panel manufacturer in the current Indian market?
One of the most important challenges that any solar manufacturer will face is the constantly evolving technology, and the rate at which some of the capital equipment that is deployed in various factories gets obsolete, it's a three-year cycle, and it keeps relentlessly coming. Whatever we put in now potentially would need to be replaced in the next three to four years. So that's the constant push to get to the latest technology is an important challenge. The way you do deal with it is, that you plan for three-year capex samples and keep executing at speed. The other challenge is making sure that we are world-class from a cost and quality perspective, and so that's also a very, very constant focus.
What is the kind of impact of the rooftop scheme that you are expecting this fiscal year?
We are very excited about this scheme for many reasons. I think one of the first reasons is the deep social impact that a scheme like this can have, in tier two, tier three, and tier four towns, even in villages where it will dramatically aid the electrification process. At the same time, brings the cost of electricity down. To bring the cost of electricity down, you don't have to, give subsidies at the level of consumption. This is a very good scheme and economically sound scheme to get large-scale electrification in the country in terms of impact. In terms of impact on an average, a household in India would consume anywhere between two kilowatts to three kilowatts. And so if you multiply it by one crore houses, which the PM Suryaghar Muft Bijli Yojana envisages in the first couple of years. We are talking about between 20- 30 gigawatts of edge. So, it will have a very substantial positive impact in many respects, including social impact and the creation of jobs.
Are there any policy changes or new incentives you believe are necessary to further boost the solar energy sector in India?
We can divide that into two parts. The first is the central policy framework. We believe that the central policy framework has evolved very well with ALMM, customs duties that are now levied at various parts of the value chain. We believe that this structure is evolving well. The important part here is to ensure that there is policy continued and therefore certainty as we move forward. So from a central perspective, I think that's what our thought process is. At the state level, there is a wide variation. Some of the states are very inviting and encouraging by offering capital subsidies anywhere between 20 to 50 per cent and also cost per unit power, anywhere in the region of two to three, and some of them more, on the side, of two rupees per per unit, which are very important to ensure that the industry prospers and can stand up to global competition. And ultimately, the dream of Made in India, solar panels is realised.
Energy storage is a critical component of renewable energy integration and the government’s thrust on round-the-clock power. What advancements in energy storage technology and its deployment have we seen in the Indian market and where can we expect Waree to be positioned?
Solar works when the sun is out, and the wind turbines work when the winds are howling and typically, the wind howls a lot in the evening period. And of course, solar is available during the daytime. But if we have to be consistent around the clock, storage is a must. From a cost perspective, we are seeing batteries getting better and better and we will see a large proportion of our storage needs move to batteries.
Beyond manufacturing, what are the green shoots that you are seeing in the operations & maintenance segment and how is the company looking at this segment to contribute to its revenue mix going forward?
Operations and maintenance as more and more of these solar panels come into action just to make sure that the production is at a consistently high level. Basic things like maintaining the panels, cleaning the panels, making sure that the contacts and the joints are clean, and then just keeping the whole installation safe, it does offer a substantial amount of operations and maintenance opportunities as a business. The wind turbine O&M business is already very well established, and solar is also going to be an important business that one can look at. The industry in fact, can be looking at digitizing this whole world in business as well. So a lot of innovation is possible in this.
Any briefing that you could give on the international plans or the main thrust will be in the domestic market? How important is research and development (R&D) to your company's strategy, and how much does your company invest in R&D annually?
We see ourselves as a global company born in India. We already have a three-gigawatt facility coming up in the United States, and it will be commissioned very soon. So our ambitions are clearly global.
Technology is something which keeps changing in this industry, every three years, the basic cell, which is needed for the manufacturing of a solar PV panel undergoes a sea change in technology. We had Bonaparte, a few months ago, you would talk about Bonaparte, and now the state-of-the-art technology is top gone. So it keeps evolving, and one needs to be constantly invested. As we go out into the future, we will see perovskites or tandem cells, which are based on perovskite technologies, come up. So R&D is extremely important, and Waaree invests in R&D to ensure that we are ahead of the game.
Lastly, when can we expect your IPO to hit the street, it’s been a while since your DRHP came out and I’m sure investors are keen to unlock the same potential in terms of value creation that the other two group companies have been able to deliver in recent times.
We made our intentions very clear to list, and all the matter is now with Securities and Exchange Board of India (Sebi). So the right person to ask this question is Sebi. We are absolutely ready, and we are looking forward as various government agencies take the next steps forward.
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