Solar EPC: After Strong 2022, Industry Looks Ahead To Continuity in 2023

The Indian Solar EPC market looked good in the year gone-by as several EPC projects, both government and private, took off in 2022. Interestingly, even as large EPC firms with a global footprint like Sterling and Wilson Renewable Energy struggled with projects where they were on the hook for fixed price contracts, bearing heavy losses, smaller EPCs had a pretty decent year.

Firms like Navitas Solar, an EPC firm based in Gujarat, has a success story to share too, namely, a 352 kW industrial rooftop, a 402 kW solar plant at JFE Shoji Steel India Ltd., Maharashtra, a 4 MW in-house captive Solar Park at Kalpataru Global Alloys, Andhra Pradesh among many others. Sunay Shah, Co-Founder and Director says Navitas has established more than 25 MW EPC projects in PAN India, having started from solar PV capability of 5 kW.

2022 set the tone for progress to continue in 2023, as per Suthagar Santhanam, VP Projects, Amplus Solar, who says that “Major projects were won by the Top 5 EPCs. We expect continuity of scale in 2023 for the EPC market. There are a lot of upcoming projects, including Battery and Energy Storage System projects- an 810 MW plant by RUVNL in Rajasthan, a 1200 MW Hybrid Solar plant and another 2250 MW round-the-clock ISTS project by SECI. Apart from these, there are a lot of floating solar system projects too from both government and private players and EPC market is bound to grow.”

The EPC market reported good growth in 2022 and new players jumped in, establishes Shreyas Gowda, Senior Vice President at Oorjan Cleantech Private Limited, “During the first half of 2022, India installed approximately 7.2 GW of solar projects, that is more than 50% increase year on year. Several new companies cracked the top ten for the first time, indicating a thriving solar market with numerous opportunities.”

Some of the surprise success stories have come from module manufactures too, as large manufacturers like Waaree Energies and Goldi Solar saw their EPC firms/divisions scale up rapidly too.

Among some major EPC projects that contributed to the growth of the Indian EPC market in 2022 include NHPC’s agreement with Adani for 600 MW worth of capacity. SJVN Ltd also signed an EPC contract for a 100-mw solar power project with Tata Power Solar Systems Ltd, whose EPC projects worth 625 MW were commissioned in Q2 FY23. Another 188 MW new EPC capacity has been won by Tata Power Solar for the said period. Its order book at the end of Q2 FY23 stood at over Rs 15,200 crore.

Enabling policies, incentives and subsidies backed by the government further accelerated and facilitated these projects. The Green Open Access Policy, 2022, for instance, was a big victory for the solar market in general, the impact of which was also felt on the EPC market.

Sunay Shah continues, “For EPC market in year 2022, solar installations in India have already reached to 61 GW. The number is remarkable as India targets to have 500 GW of renewable energy installations by 2030. In the year 2023 also, we foresee all the segments in EPC market will be growing, be it residential, commercial or industrial.”

Utility leads the day, rooftop has scope

Regardless of the segment, utility-scale projects have always taken the lead and the EPC sector is no exception to this so far. Suthagar validates this, “Considering the scale of utility projects (8-10 GWp on an average per year), they will always rule the EPC market” whose view is further endorsed by Shreyas Gowda, “India ranked 4th in world ranking for solar deployment in 2022 by adding a total installed capacity of 61.97 GW out of which 85% was achieved by utility scale projects.”

After years of disappointment, rooftop is one sector that solar firms believe will come up in a big way. One reason behind this could be the Government push for it thanks to the RTS scheme and the launch of the National Portal for Rooftop Solar to encourage adoption and ease procedures. However, these policies and subsidy schemes continue to see regional disparities. The stark disparity is particularly visible in regions like Bangalore. Discoms in the largest metros are all to blame for being lackadaisical in their approach to support growth so far, Shreyas Gowda suggests measures that must be taken up for greater uptake of rooftop solar, “Although Utility scale projects see tremendous growth as the leading EPC players line up projects, rooftop solar is also being revamped to achieve India’s target of 500 GW of renewable source by 2030. State regulators need to work on easy adoption, awareness programs and take various policy measures to attract more Residential, C & I segments to adopt RTS & central simplified subsidy scheme which was launched in early August is yet to take off in many states.”

EPC Trends in 2023

Sunay Shah is extremely hopeful that the rooftop sector will pick up this year and Navitas is looking to channelise on this trend, “We want to grow residential rooftop Solar’s adoption in the country. The Residential sector has a huge potential to grow in future. When we talk about rooftop solar installation, it is perceived only as C&I as residential rooftop solar has a very small percentage amongst the total rooftop solar installation in India. Therefore, we have launched a fintech model for end user financing of small-scale rooftop solar installations and the tagline will be “Fintech for Cleantech.” He also adds that there is increased awareness among people about the benfits of rooftop installation, “Nowadays, people of tier 2 and 3 cities are also having knowledge about rooftop solar and they have started installing solar. So, in the upcoming year both C&I as well as rooftop solar will get tremendous response.”

Other trends that he foresees heading into 2023 are Open Access Solar Parks, Agrivoltaics, Floating Solar power plant, off grid Solar systems.

As is known, floating solar power plants is the answer to India’s challenge of land scarcity and the country has taken cognizance of it. In 2022, India witnessed the establishment of several floating projects. The 100 MW Ramagundam Floating Solar Project in Telangana and 92 MW Kayamkulam Floating Solar Project in Kerala, both became operational last year, setting a precedent for other parts of the country to follow.

Back in 2021, The Assam Power Distribution Company Limited led a trend of sorts when it issued a tender for off-grid rural electrification through 71,199 standalone solar systems on a turnkey basis under India’s Pradhan Mantri Sahaj Bijlee Har Ghar Yojana (SAUBHAGYA) program. As one may recall, The Union Budget 2022-23 had provided a budgetary allocation of ₹3365 crore for the solar power sector, which also entailed off-grid projects.

Suthagar bets on a the emergence of a new technological trend in EPC sector, “A major differentiator will likely be the use of innovations that can increase efficiency in EPC. For reference, Blockchain technology can provide a more secure and fast-moving workflow that allows all involved parties to improve productivity.”

Blockchain could make room for sharing of energy and also help interlink projects with investors.

In 2020, TERI introduced a prototype of blockchain aided solar power trading that made peer to peer energy sharing a reality.