“Govt. should do away with all financial subsidies for the solar biz”, Rahul Gupta, Rays Experts

Rays Experts, an early entrant to the solar sector in 2011, has been a quite and dependable performer. Focused mainly on EPC and rooftop work till recently, the firm just inaugurated the first 10 MW  of its solar park in Haryana, a first for the state too. We spoke to Rahul Gupta, MD &CEO, who also founded the firm.

1.  You have expressed optimism about the rooftop residential segment. What’s the basis for the same, considering how it has struggled so far

RG: India has 330 Million Households. It is undoubtedly one of the biggest business opportunities present and hence it makes all the sense to be optimistic about it. Today the costs have fallen and subsidies are still present. States coming up with 40+MW tenders dedicated to the residential sector, and then banks making lending easy, it has all the reasons for the residential solar sector to flourish. The only hiccup is that there is no standard quality parameters or testing happening and bad work of some companies is creating hindrances for good players too. I would say that residential solar is still a sunrise industry and few companies will emerge to be big enough to make an impact in this opportunity. We see ourselves as one of the potential names in this aspect.

Till now, the residential solar industry was marred by high CAPEX, lack of awareness, and unclear policies. Now, while these issues having been addressed to a great extent, I feel this segment has a long way to go.

2. Almost a decade since you started Rays Power Experts, has the industry growth and changes gone to plan for you? How do you look back at the past decade?

RG: We started in solar industry when national solar mission had just started and hence consider myself lucky enough to witness several curves and trends this industry has had. We were always on our mission from day zero- Each individual should own solar plant in its own capacity. It was this drive only which made us start the first private solar park in the country and till date over 500 MWs have been commissioned in almost 9 solar parks. So, I would like to acknowledge that we are on the track we had thought. Though each business has its own ups and downs, we too had ours, but today, when we look at what we created, I feel it was worth the journey and I am happy we were stuck on our plans always.

This industry has grown fast enough to be a textbook example for global solar scenario. While all major funds have invested in the Indian Solar business, the credibility, PPAs of our country have made  me proud. When we compare the policy and process with other countries, I feel we are a more stable country and here the speed of work is far better than most of the western countries.  At the same time, I feel disappointed to see that government support to small and distributed solar plants, mainly ground-mounted have been discouraging. A lot of people and companies want solar in their investment portfolio, but there is no such opportunity (except PMKUSUM, which was introduced a few months back). Moreover, a lot of small solar plants are struggling with payments and policy changes. This is where, I feel we as a country need to work a lot and make this industry much more stable and safe.

3. Where do you lie on the whole manufacturing debate of the need for high customs duty on top of SGD? What’s the best way out here?

RG: I feel the imposition of BCD over and above the SGD is not productive. SGD in itself has not shown results, and instead of lowering costs of solar panels, the cost of installation has gone higher which ultimately results in higher tariffs ultimately a revenue loss for the Govt. Instead, those using domestic panels shall be permitted in form of incentives or interest subsidies. Those able to export in competition with global players, must be rewarded, thereby making Indian products more competitive.

4.  How do you see the solar sector evolving over the next 5 years, considering that it is supposed to grow massively over the coming decade? Will segments like C&I, Residential make a bigger mark

RH: My projection- we have a lot to achieve as a sector. In the next 5 years, big projects through reverse bids will see the lowest tariffs in the world. As RTC (Round the clock) based projects based on wind-solar hybrid or storage will be commissioned, the solar business will prove its worth in real sense and more and more projects would come thereby perhaps replacing conventional sources of power. At the same time, the residential solar contribution will rise significantly in these 5 years. People are getting more and more aware and this is helping the residential solar sector grow fast. However, in the C&I segment, discoms are still confused about whether to support the model or consider it as its competition. In an aspiration to make Discoms profitable, the C&I segment may get hurt.

5. Solar + storage is becoming the new buzzword. How do you see this growing in the coming 2 and 5 years? How is your firm approaching it?

RG: We are doing a few projects on solar + storage. We have also experimented with Li Ion based battery storage solutions on some houses and hence feel that stable storage technology is still to be discovered. I personally feel Li based storage is not the future, rather something with more durability with easy availability has to be developed. Hence, though storage based solar projects will keep developing, I feel the next 2 years would be a deep learning curve for the industry, but in the next 5 years, a lot of trivial issues like grid stability, power cuts, frequency mismatches, etc would be addressed. Overall, I am excited to wait for these 5 years and see how we change the way we use our electricity.

6. Over 5 years after your first few installations, what are the big lessons you have drawn?

RG: Like there is no shortcut to success, there is no shortcut to a good solar plant. Any solar plant installed with due respect and protocols will run for 25 years with minimum failures. While the right quality of solar panels and other types of equipment are basic minima to talk about a good plant, the quality of installation makes all the difference.

Similarly, while some say O&M of the solar plant is simple, we say, O&M of solar plants is all about discipline. It can’t be taken casually and the right maintenance of the solar plant will only make the solar plants produce the desired electricity.

When we started as a novice in EPC business, we made a few mistakes and a few learnings. However, we never compromised on the quality and hence we are confident our plants will run smoothly for their life cycle.

7. What is the one big policy move, that in your view can push forward the solar sector the most?

RG: I feel government should do away with all financial subsidies for the solar business. The solar sector has moved to a level where it doesn’t need the support of governments  for making it sustainable. Though the Banking facility will always be an integral requirement, all waivers of Transmission charges, subsidies in the rooftop, etc have to be given away. At the same time, government has to make Discoms understand solar is just another way of producing electricity and in the long run, it would help Discoms save a lot of money. There should be a central agency for making policies around renewables or at least solar if our country truly wants to be “One Nation, One Grid”

8. Ray Power Expert plans for the next 5 years.

RG: We see ourselves on 1,00,000 Houses in the form of solar systems installed, we see ourselves in every state of the country in form of our solar parks where small investors can own a solar plant of their desired size and we see ourselves as a preferred choice for EPC for all major solar developers. In all, we want to remain associated with the solar story of the country and we are here for long run.