Mumbai: Waaree Energies Ltd has tripled its solar photovoltaic (PV) module manufacturing capacity with a new 1 gigawatt (GW) facility in Vapi.
This is in addition to the existing 500 megawatts (MW) plant in Surat, said Sunil Rathi, director of sales and marketing at Mumbai-based Waaree Energies. “The plan is to increase this to 2GW soon," he added. “Right now, we are building panels of more than 4MW every day."
Waaree’s focus is on rooftop solar installations. It has already built a network of 250 franchises across India and plans to reach a franchisee count of 1,000 by end-2018. It also has 200MW of engineering, procurement and construction projects in the pipeline. Last December, the firm had raised ₹ 100 crore in structured finance from Centrum Financial Services Ltd and a south-east Asian private equity fund. It reported net profit of ₹ 24.22 crore in FY18, marginally lower than the ₹ 24.88 crore in FY17.
Though the centre’s decision to increase India’s renewable energy production target to 227GW by 2022, from the earlier 175GW, is good news for the sector, Waaree has been struggling to compete with cheap imports from China. With Beijing scaling down its solar energy targets and subsidies, India has become an easy market for Chinese solar panel producers to sell their excess stock.
“Dumping by China and the volatility in the rupee are two of major issues that local PV manufacturers are facing," said Rathi. “It is nearly impossible to compete with China’s distress selling. Their products sell at a 5-15% discount to locally made products."
The government increased India’s renewable energy production target to 227 GW by 2022 instead of the earlier figure of 175 GW. However, about 86% of solar photo voltaic modules used in India today are imported from China, Rathi said. While that is good news for power producers, who have access to cheaper inputs, it doesn’t augur well for local module manufacturers. “You can’t drive an industry’s growth through imported inputs," Rathi said. “Nobody expected solar tariffs would fall to ₹ 2.44/unit so quickly. I think if there’s even a small increment in price, it will help the local industry."
Waaree has also tied up with third party equipment suppliers to manufacture batteries. “We shall provide energy storage solutions for utility scale (grid-connected) storage products globally as well as for retail solutions in lead acid as well as lithium ion batteries," Rathi added.
The company’s entry into being an independent power producer (IPP) has, for the time being, been shelved. “Being an IPP has requires massive equity investments; for now, we would rather focus on manufacturing," Rathi added. Waaree has 200 MW of solar assets that it owns and that it has been attempting to sell for over six months. The company was in talks with ReNew Power Ventures, one of the biggest IPPs in the country, but talks fell through earlier this year. “We’re in talks with a few other players, including ReNew again, to sell these assets. It would be premature to say anything more now," Rathi explained.