Demand for Domestic Products Increased After China’s Covid-19 Incidence: Yash Jain

Solar panel prices, production, and supply are poised to continue to be in turmoil in the midst of the Coronavirus outbreak. Yes, the demand for domestic products have increased tremendously after China’s COVID-19 incidence. However, the industry is also facing shortage of raw material as compared to the demand. Also, we are coming up with energy storage solutions along with EV segment that will help in catering and uplifting the Indian solar industry, says Yash Jain, Chief Marketing Officer, MicroSun Solar Tech Pvt Ltd, a company in renewable energy space providing end-to-end PV solutions from manufacturing modules to EPC installations. In conversation with Manu Tayal, Associate Editor, Saur Energy International, Jain shared his views on various topics including company’s future investment & expansion plans, latest technology, policy hindrances etc. Here’re the excerpts from that exclusive interview published in the Saur Energy International Magazine’s March 2020 edition:

Q. Shed some light on how Microsun Solar comes into existence, its various segments, and product offerings for the solar industry. 

MicroSun Solar is a renewable energy company, which is one of the leading manufacturers of Solar Photovoltaic (PV) modules and panels, solar water pumping systems, solar lighting systems and Solar Power Packs in India. It is a pivotal company in the area of renewable energy providing end-to-end Solar PV solutions ranging from manufacturing Solar PV modules to Solar EPC projects. It carries with it over 12 years of technical experience of successful solar module manufacturing and project execution in India. It has set up its own facility with 150MW per annum capacity of Solar modules manufacturing in Bangalore.

It all started in 2001, when we acquired ‘NALSUN’ to manufacture flat plate solar collector fins., Because our well experience business acumen and quality consciousness, we acquired major customers and within 4 years of business operations we became No.1 OEM supplier to the solar water heater industry in India as “Maharaja Techno Chromes Pvt Ltd”. We were doing very great as we had the technology from a LAB in Bengaluru and there were very few companies who were into manufacturing of Copper Fins in India during that Era, we picked up really fast in just 3 years, started selling out to Big Giant Companies who were into Solar Water Heating Systems but slowly we started finding it very tough when China aggressively marketed products at very dirty cheap price in Indian market, we couldn’t bear selling in the loss for a longer time and on the other side we were losing our market share, hence we decided to diversify.

Tell our readers something about Microsun Solar’s manufacturing facility in Bangalore. Is this truly a Make in India initiative?

We believe in a sustainable future, and we believe in creating it ourselves. Being a multi-product organisation and one of India’s leading engineering companies, Microsun Solar has dedicated itself to leaving behind a green legacy. Working for greater good, our eco-conscious values have driven us into delivering world-class solar energy products manufactured using state-of-the-art technology from Ecoprogetti, Italy. Each Microsun solar product is created with the single minded objective of reducing carbon footprints and global warming, our manufacturing facility is headquartered at Bengaluru, India. Yes, it is truly a Make in India initiative. Policy reformations and initiatives like Make in India are truly creating a conducive environment for manufacturing growth. Domestic Manufacturers have got a great push for supply of it’s products across the nation.

Q. What parameters you follow for manufacturing to ensure the quality of your products? Do you provide after sales support too for your customers?

For us Quality of Module means the modules have to be durable, and efficient to maintain standard level of performance to satisfy energy requirements. You very well know that Low quality modules can lead to faster degradation of the panels and deficient energy generation, which can make solar plants unviable. We can’t afford to lose our customer’s trust just for the sake of little higher profits.

Our company focuses on adopting qualitative management and innovative technologies, our manufacturing facility has the finest testing machinery and equipment imported from Italy. Starting from incoming quality control to finished product quality check, we use various machines such as cell inspection/testing machine, EVA gel content tester, EL testers, Sun simulators, hi-pot tester etc. To maintain long term focus on quality and reliability, we have developed operation procedures that make sure that during and post production, the modules comply to highest quality standard matching our commitment to the client. We have maintained a complete traceability model of module manufacturing BOM, process details and enforce people accountability to ensure 100% of all modules produced are of similar quality.

Q. Is there any new technology on which you are currently working on?

In the PV module space, we have launched BIPV modules, and have started selling it in the niche segmented market. We have a great demand for this product and certainly, working on to make the best efficient BIPV modules. Our team is also currently working to enhance the productivity of our existing facility while maintaining the delivery of top quality products including packaging and lastly, we are also working on microinverter technology.

Also, we are coming up with energy storage solutions along with EV segment that will help in catering and uplifting the Indian solar industry.

Q. Is the demand for domestic products increased after China’s COVID-19 incidence or whether the solar industry is facing raw material scarcity?

Solar panel prices, production, and supply are poised to continue to be in turmoil in the midst of the Coronavirus outbreak. Yes, the demand for domestic products have increased tremendously after China’s COVID-19 incidence. However, the industry is also facing shortage of raw material as compared to the demand. The raw materials are taking turns from other countries such as Thailand, Vietnam, and Singapore etc.

Q. How do you see the effect of China slowdown will last on the Indian solar industry as a whole? How much it will impact prices?

The disruption in business is beginning to be felt globally. However, it’s time for India Inc to create opportunities. The dependence on China has decreased, though only slightly, over the last five years. From importing finished products, India is now assembling products and developing the ecosystem here as well. The Coronavirus outbreak in China has created a shortage of solar wafers and Solar module glass in India, meaning it’s harder to build the solar panels with cost effectiveness in mind. If the Raw Materials such as Cells (DCR) and Glass are procured from India then the rates are surging high, demand and prices will definitely rise. The difference comes upto Rs 3 to 4 per watt.

Q. In your view, what are the major challenges currently for the solar industry on which policy makers should take note as soon as possible?

Despite India’s ambitious plans for the solar sector, incoherent policies, retrospective changes in law and a convoluted taxation system has spelt a death knell for the nascent industry.  There’s a tender policy in its current form wants developers to set up four projects for the module, cell, ingot and wafer manufacturing with an annual capacity of 500 MW each. A manufacturer does not want to generate power. If manufacturing is the core competency of the bidder, the additional requirement of building a solar park is a problem.

Besides, the safeguard duty imposed on solar cells in July 2018 to stimulate local production did not lead to any expected benefits. While it may have added to the prices of Chinese imports, they still are cheaper than domestic panels and cells, as per industry observers.

However, it is felt that a lot many bottlenecks exist in making such a vision see the light of the day. There is uncertainty and a lack of trust that is evident at present. Over a period of last one year, there have been problems pertaining to customs duty, anti-dumping duty, numbers varying, GST issues, huge payment delays, renegotiation of contracts, cancellation of projects, and retrospective action of guidelines which have completely changed the nature of projects. Then there have been capping of tariff and investments in the tenders, cancellation in tenders, regulators coming with different orders which are pushing everyone into the courts.

The way of tendering of projects is a big pain in India. Due to tariff capping projects are expected to be bid on prices that are not viable for the project. The upper tariff ceiling is pegged at about Rs 2.78/kWh, which is a huge deterrent to solar developers since it makes projects unviable as their bids are determined by changes in module prices, currency risks and varied solar radiation across states.

Q. Being a solar module manufacturer how do you deal with the cost pressure that came from developers due to lower tariffs?

Low Tariffs are definitely pushing Developers to cut costs and quality of Solar projects. With limited ability to reduce prices of modules and inverters, developers are trying to cut costs on other equipment. Many developers come to us and negotiate on price, if we can’t give the desired price. They will ask to compromise on the quality and this is against our ethics and culture. We strictly deny the module order. The pressure from EPCs and developers is real and surreal, who are in turn pointing fingers at the government agencies who they say are forcing their hand with low tariff caps and low bid matching.

All the EPCs and developers come to the Module Manufacturer because the 60 percent cost of the entire project is the Module Cost. However, due to aggressive bidding in the industry, Module Manufacturers including us are feeling the heat.  We straight away deny undertaking such orders.

I know this brings our opportunity costs & Profitability into the picture. However, this is not the long term business. Today you see, one by one few companies in this sector are shutting down its operations because they took the shortcut to earn the goodwill and profit – for which they compromised on aspects of the product and are now vanished from the market.

Q. Do you have any further investment or expansion plans in near term?

We do have expansion plans in next two years to double the capacity and we shall deploy a separate line for cut cell modules. With this expansion we shall be able to make the latest technology modules viz glass to glass and twin peak on large scale.