The same duties on imports of cells & modules are not going to serve the purpose: Prasoon Chaudhary

In a chat with Prasoon Chaudhary, Business Unit Head, Photovoltaic Solar Manufacturing at Pennar Industries Limited, we got his perspective on the many challenges the module side of the business faces today. After their success in the mounting structures business, the engineering goods firm is looking ahead to replicating the same level of success in modules too. Here’re the excerpts from that exclusive interview published in the Saur Energy International Magazine’s July 2020 edition:

Q. What drove the group to expand into solar module manufacturing?

We as Pennar share the major market for supply & services of Module Mounting Structures in Solar Industry since 2008 along with being into Development & EPC of Solar Projects in India, therefore in the year 2018 we decided to get into manufacturing of Photovoltaic Solar Modules as the DNA and Experience of the company was majorly into manufacturing & supply of 2000+ Engineered Products in more than 20+ countries from more than last 3 decades.

Q. The safeguard duty, by common consensus, seems to have failed. And now the government is considering customs duties. What’s the duty level you would recommend? For how long?

The phase 1 of SGD implementation was a complete failure as major chunk of the projects installed during the period were given exemptions for duty. Secondly the country’s cell manufacturing facilities can’t even cater to 10% of the module manufacturers requirement, therefore putting up equivalent amount of duties on imports of cells & modules are not going to serve the purpose as on date. As per a domestic module manufacturer, my suggestion will be to impose a minimum of 25% BCD on Modules and 15% of SGD should be continued for 2nd phase of 2 years. But only if the cell Imports are exempted from duties till sufficient amount of manufacturers gets developed within country, then only Domestic Module Manufacturers market can sustain else duties are not going to help domestic manufacturing as on date. Apart from this governmentt also needs to control the pricing of domestic manufactured cells as due to the improper implementation of DCR schemas by govt. & misbalance of cells to modules manufacturing ratio there has been a surge in requirement of DCR Cells due to which there is a huge gap between demand & supply which allows domestic cell manufacturers to drastically inflate the prices which results in infusion of more CAPEX for setting up the Solar Power Plant.

Q. How do you think has the poor progress on rooftop solar affected demand for domestically manufactured modules in India? Do you see that changing soon?

We need to understand that usually the required area to setup the rooftop solar plant in most of the premises is lower compared to the energy demand, due to which following situations arise, First if we have to use DCR Modules we are restricted to use a very lower wattage module compared to open category due to non availability of high efficiency cells produced within country, secondly due to continuous change in policies & hurdles faced by C&I (Commercial and Industrial) RESCO (Renewable energy service company) players related to net metering & open access approvals there had been up’s & down’s throughout. Hence I can only see it changing once the process becomes smoother for developers & government should keep it same for all states throughout the country. Installation of Rooftop Solar will always be a monetary loss for local DISCOMS & hence they will never promote the way it should be.

Q. In India, due to pricing issues we are still transitioning from poly cell to mono and beyond. How do you see this transition playing out?

I would say the call between Poly & Monoperc has to be taken up by the developer looking into ROI (Return on investment) & a sustainable cheaper source of energy. There is nothing good or bad between both the technologies and both are proven throughout the globe. Yes, monoperc has already fascinated the rooftop developers within the country to maximise the project capacities in line with their customers demands whereas majority of utility scale ground mounted projects are still going with the poly option for the straight reason that when they compare the delta between cost of land & price of mono versus poly, they find price of poly more attractive & I don’t feels it’s a wrong call.

Q. While your current capacity is for 240 MW, do you see opportunities to expand soon? Does the firm focus on any particular geographies as far as serving the market goes?

We have just started with 240 MW’s (annual capacity) to launch our products in this domain, but the plans are very clear to expand soon along with the reverse integration in value chain. We as PENNAR had always been into the top leagues in all other domains where we have our business footprints and for sure our idea with PV manufacturing is same. We are focusing to sell our products throughout the country along with certain geographies in US, Europe & Africa where we already have a strong manufacturing base for our other engineered products.

Q How has the Covid-19 lockdown/s impacted our business ? Do you see growth over 2019-20 happening for Pennar?

For sure this pandemic has been a barrier in growth for all the economies throughout the globe, but as the situation gets better, the solar market is also getting back on track day by day & Pennar is inline with it. We have been seeing continuous growth in our revenues from month to month after the lockdown was lifted since May & have a gut feeling of industry running with the same pace as it was in last quarter of last FY by Sept 2020.

Q. If you had to pick one reform, what would that be, to galvanise the solar sector again?

To galvanise the solar sector at this instant, the need of hour is to have a common agency to draft and govern the policies applicable throughout the country rather than keeping them in control of state sodal agencies. Our decisions should be taken considering the volume of work within the entire country rather than in a state or DISCOM.