Viz-A-Viz with Basant Jain, Chief Executive Officer, Mahindra Susten

Q. Being a major player in the solar space, how do you contribute towards India’s clean and green energy initiative?

Mahindra Susten (Part of USD 20.7 Billion Mahindra group) is a leading player in the Cleantech space. It is amongst India’s top 2 companies providing turnkey EPC solutions for grid connected solar projects and has delivered over 1400 MWp till date and another 1100 MWp is under execution.

Our vision is to be the world’s most admired brand in sustainable infrastructure and renewable energy. In the previous financial year FY’18, Susten has entered international markets and is on its way to delivering close to 660MWp of solar projects. Susten is also a leading player in Distributed Solar space in India.

We cater to commercial, industrial, institutional and rural customers through offerings such as rooftop top solar projects, ground mounted solutions, solar powered carports, solar petrol pumps, solarized telecom towers, solar water pumps and microgrids. We offer turnkey project execution services with after sales operation and maintenance support. The solar segments, both Utility and Distributed, have seen a consistent growth of over 20% CAGR.

Mahindra Susten’s developer arm has 335MWp Solar PV assets commissioned and 337MWp currently under various stages of development. Susten also has a thriving solar plant O&M business with portfolio of over 1800MWp. We at Mahindra Susten believe in innovation & strive to develop affordable solutions for India to achieve energy security.

Q. As in the past few years, so many energy storage tenders have been cancelled. How do you see the future of energy storage space in India?

Battery prices are continuously falling making its economics better and when coupled with solar power, the combined energy solution can be a true 24×7 green power option. There are also new areas that are emerging: wind-solar-storage integration, energy-usage optimization based on tariff, and adoption of electric vehicles (EVs). These will provide a push for quicker adoption of storage technology.

Some of the energy storage tenders in India were cancelled and Susten was unfortunately on the losing side. Such events do not augur well for the industry which requires some early demonstration of storage technology adoption at a large scale. However, we hope that such events were more of exceptions than a trend and hopefully will not continue in future.

Mahindra Susten had emerged the lowest bidder last year and won the bid to set up the 28-MWh project for NLC (formerly Neyveli Lignite Corporation) in Andaman & Nicobar Islands, which was eventually annulled. We are keen to work closely with government to develop a robust solar-plus-energy storage facility in the islands and other possible places.

Q. Recently, the Petroleum Minister said that India’s energy mix will be substantially complemented by renewable energy. What scope do you see as a well-established EPC player in the solar segment?

This is a positive news, especially in the distributed solar segment. Industries and businesses are aligning themselves towards more sustainable energy solutions. Rising fuel prices, limited reliability of grid based power supply and focus on the green mandate are currently driving increased adoption of solar PV technologies in the commercial and industrial space.

Limited electricity access and the operational hassle of fuel based energy solutions have led to increased investment in solar solutions and off-grid solar products in the rural space. Reputed EPC players such as Mahindra Susten not only bring innovative technical solutions but also varied business models and a strong service network that enable large scale adoption of decentralized renewable energy technologies.

Remote monitoring technologies and predictive analytics based O&M platforms further assist in creating a seamless customer experience.

The government’s target of 40GW generation from rooftop is ambitious and achievable through robust implementation of supporting policies. Currently, all states have different policies in terms of eligibility, approval processes and technical and non-technical specifications. The need of the hour is to have a unified policy with a single window implementation framework.

Q. In the present scenario, what are the major challenges that EPC players in the domestic solar industry is facing? In your opinion, how these issues can be resolved?

Indian Solar Power Industry has witnessed a healthy capacity addition of 8GW in 2017, taking the total solar installed capacity to 22GW. In a bid to get a foothold in the massive Indian solar market, developers have been seen bidding aggressively and the drop in tariff rates are adding margin pressures to the EPC players.

Adding to the woes of margin pressures are the uncertainties that have developed in the last two quarters of 2017, related to anti-dumping duty, safeguard duty, customs duty classification. Recently announced bids have therefore seen fewer participation by developers, and some of the bids have gotten extended or delayed.

These uncertainties have in turn resulted in a dry pipeline for the solar EPC players. The third set of challenges faced by EPC players is the unavailability of skilled labour.

The challenges posed by uncertainties in duties are not going to deter the National Solar Mission and is only a temporary phase until regulatory authorities bring in clarity to toward these. It is essential that the projects that have been awarded prior to emergence of these uncertainties should be ring-fenced and safeguarded to help developers realize project feasibility and so as to avoid a potential threat to the EPC players.

The skill development program named Surya Mitra under National Institute of Solar Energy (NISE) is a welcome move by Ministry of New and Renewable Energy (MNRE) to address the challenge of skilled labour. Mahindra Susten has initiated an in-house program ‘Project Suryashakti’ under the Surya Mitra scheme.

Three batches with 52 candidates that includes 35 girls have been trained so far, and nearly 20 of them have been inducted by Susten. Our training centre got accredited by National Skill Development Corporation of India (NSDC) under Skill Council for Green Jobs (SCGJ), an institutionalised structure promoted by Ministry of New & Renewable Energy (MNRE), GoI and Confederation of Indian Industry (CII) which works under PMKVY (Prime Minister Kaushal Vikas Yojana) of National Skill Development Corporation (NSDC).

Q. Being Mahindra Susten, the renewable energy arm of the $20.7 billion Mahindra Group, what is your future action agenda in the next five years?

Mahindra Susten plans to expand our footprint globally and have already set foot on Saudi Arabia (400MWp), Bangladesh (260MWp) and Thailand (7MWp) in FY18. We also plan to grow our development portfolio to 2000MW by 2020.

Susten extended its Operations & Maintenance services to other IPPs in FY’18 and have been receiving encouraging feedback for the quality of services. We plan to grow the O&M portfolio to over 8000MWp in the next 2 years. We are a technology enabled company and we look forward to redefine the paradigm in the Renewable Energy Industry globally through such initiatives.

Q. Like other renewable energy players in the country, do Mahindra Susten being a portfolio company of Mahindra Partners, the $1 billion private equity division of Mahindra Group, have any future plans to go public?

Mahindra Susten has not planned to go public in the near future but will gear up for the same in the next 3 years.

Q. How has been YoY growth for Mahindra Susten and any key announcements which the existing and prospect customer base shall await in 2018?

The company had a challenging year in the utility solar sector with various uncertainties including potential levy of anti-dumping duty & safeguard duty, lack of clarity on GST rates applicable for construction of Solar power plants etc.

Also, there was a decline in the number and quantum of solar bids compared to previous year.  Utility division made a foray in the international markets bagging orders in Saudi Arabia and Bangladesh.

With the first quarter of FY’19 seeing an improvement in the industry scenario with bids of over 10GW being announced, the Company is confident of steady increase in volumes & revenues across various business units coupled with expansion into other promising geographies.

There was good traction in the Distributed Solar and Design-Build solutions business divisions with orders from new marquee clients and large repeat orders from existing customers. We also plan to scale the Distributed Solar into rural and residential segments through productized offerings and an extensive service network across the country.

Our Existing MSAT100 offering, an Independent Row Tracker, has an installed base of close to 500 MW. Ease of installation &maintenance are at the core of our design, providing the simplicity of a fixed tilt module mounting system in a tracker.

All components are meticulously designed to ensure minimal wear and tear from wind exposure, extreme temperatures or severe weather events. We have filed for 5 Indian patents on tracker, including patent on innovative bearing design, housing and unique tracking mechanism.

With the success of MSAT100, we will be launching our next generation tracker in 2018. The new tracker will build on all the ease of installation and reliability aspects of MSAT 100, while also provisioning for the latest trends in Modules along with global supply chain and installation capabilities.