At Intersolar India, Gujarat Demonstrates Why It Is India’s Solar Growth Engine

At Intersolar India last week, the first doubt that was cleared very quickly was the choice of location. Gandhinagar, the capital of Gujarat, is known to most people more for its limited role as the seat of the state government, than any pretensions to be a thriving commercial or cultural hub. Barely 20 odd kilometres from Ahmedabad, the city largely feeds off the energy and enterprise of its larger and older neighbour. In this case, it was the presence of world class exhibition facilities that took Intersolar India there, as one assumes the selection of Gujarat as host was a foregone conclusion.

While we delve into Gujarat’s solar power later, first, the key trends and murmurs we could spot.

For one, the Chinese presence remained muted, with the Chinese majors sticking to the post Covid template of a presence led by their top distributors in the country largely. However, employees of major players in the Indian market were definitely present in numbers to maintain their market connect. The Chinese presence might be muted, but there was zero doubt among attendees that the Chinese role in Solar would remain dominant and critical for the foreseeable future. Allied to the muted Chinese presence might be the state of the major developers, most of who were simply absent from the show as exhibitors. With large developers facing major stress on the financial front thanks to the hike in import prices and the impending impact of BCD (Basic Customs Duty) from April 2022, it is clear that hectic efforts are underway to find a solution that prevents massive losses to them, or the government, if it chooses to defer duties or even allow grandfathering of certain projects. With the nominal ‘loss’ to the government even higher with the high duty rates of 25% on cells and 40% on modules that are due from April next, developers have a tough time to explain why they will need Chinese imports at lower rates to ensure large projects stay viable.

More, Larger and Outward. More plant expansions, higher output models, and a clear focus on exports for many of the top manufacturing players was obvious from our discussions with them. In fact, even as the uncertainty around BCD continues to be a worrying factor for many manufacturers in the module business, the seeming contradiction of aggressive capacity expansions for many was driven by a high share of planned exports, especially to the US and Europe. Higher output modules, along with the creeping rise of Bifacials means that opportunities for tracker firms for instance are also on the rise again, with many, both domestic and international, back doing, or hoping to do,  serious business  in India. Domestic manufacturers marked their presence with a strong presence, especially the cohort of Gujarat based firms, from Adani Solar, to Waaree Energies, to Goldi Solar and more. Vikram Solar was a notable absentee.

Distributed solar,  driven by generally lower costs, better awareness, as well as dropping storage costs has never been as promising as it seems right now. Multiple EPC’s we spoke to indicated an upswelling of demand for distributed solar solutions, although final conversions and installations might still lag. What is clear is that distributed solar plants will break out of the limitations of funding support from organisations as part of CSR or likewise. Sadly, we didn’t see too many distributed solar products, a notable miss along with floating solar offerings.

EV Charging infrastructure is fast emerging as the next big opportunity for inverter majors, as they ramp up their portfolio in India, and start planning for a major push in 2022-23. Be it firms like Fimer which already have a strong presence internationally, to Growatt, that is launching its first models in India, many firms in the solar inverter segment will be present in this space soon.

Software gains on Hardware: From being seen as practically a civil engineering or contractor role, solar plants are evolving, thanks to the increasing role of software. Be it IoT sensors that track performance, predict output based on conditions or plant performance, to more domestic options for plant design, shadow area calculation and more, software tools from domestic firms are coming in, and look set to carve out a strong presence soon in the market, especially for rooftop and corporate PPA segments.

Gujarat  at the forefront: You can’t help thinking that doing this in Gujarat has done a lot more to convince foreign visitors about the solar market and potential in India, than many other possibilities. Not only is solar visible in the state today, in the form of a strong rooftop presence where the state has dominated capacity build in recent years, but in the sheer entrepreneurial energy and optimism against odds of the many manufacturers, installers and other stakeholders here. Supported by a policy environment that has cleaned up the process for rooftop solar approvals, and kickstarted major solar park plans for the state, Gujarat has made the natural jump from being a manufacturing hub to a consumption hub in this case. The state leads in rooftop solar countrywide, and has accounted for as high as 80% share of new capacity additions in rooftop in some months recently.  One hopes other states will learn from the state’s example, especially in rooftop solar, for that has the potential to not only create many more jobs, but also provide a strong domestic market for the manufacturing capacities coming up across the country, which will struggle to find ready takers in the utility scale segment initially.

The presence and support of Partner organisations like the Indo German Energy Forum (IGEF) at Intersolar India also provided a strong platform for voices to be heard, and we were particularly enthused by what we heard on the potential for Agrivoltaics for instance, where you will read more of soon on SaurEnergy.