Jakson Group expects solar to match core sales by 2017
The firm plans to build another 80 megawatts of photovoltaic capacity for its own portfolio and also build plants for other companies
New Delhi: Jakson Group, one of India’s biggest suppliers of diesel generators, expects about half of its sales to come from the solar business within three years as rising fuel costs make sun-based power more attractive.
Jakson, which assembles and sells Cummins Inc. generators in India, completed its first photovoltaic power plant in Bap, Rajasthan about 25% below cost and ahead of schedule, managing director Sameer Gupta said in an interview.
It’s no longer sustainable to use diesel generation as a continuous source of power, as the government unwinds subsidies for the fuel and its import-cost surges, Gupta said. There’s no constraint on solar radiation in India. Sooner or later people will realize that.
Factories, homes and businesses in India fire up diesel engines daily to combat chronic blackouts that can last eight hours in some areas. Those machines amount to an estimated 60 gigawatts of capacity, according to New Delhi-based consultant Bridge to India Energy Pvt. That’s roughly equal to Australia’s total power generation capacity and a quarter of India’s official capacity.
Jakson targets growing group sales by 70% to Rs2,500 crore ($418 million) in three years. Its solar and electrical contracting business will account for about half of revenue by then, up from a third today, Gupta said.
The New Delhi-based group plans to build another 80 megawatts of photovoltaic capacity for its own portfolio and also build plants for other companies, Gupta said. Jakson built a 10-megawatt solar project in Talcher, Odisha state for NTPC Ltd., India’s largest generator.
The diesel generator market will still continue to grow as the overall power sector grows, Gupta said. But its application will change. Instead of relying on diesel for continuous power, generators will increasingly be used as an emergency energy source, similar to other markets such as the US and Europe, he said.
The cost of producing electricity from a diesel generator has surged 10 times in the past two decades to as much as Rs20 a kilowatt-hour, Gupta said. In contrast, declining panel prices and greater competition has driven the cost of solar down 25% since 2011 to an average of Rs6.5 a kilowatt- hour in India’s latest national auction of solar-plant permits in February.
Jakson has introduced solar-based generators — collapsible panels that can be deployed on rooftops in combination with batteries or a traditional diesel engine — priced from Rs500,000 to Rs0.4 crore depending on capacity, Gupta said. With lower maintenance and fuel costs, the payoff period for them is less than seven years, he said. BLOOMBERG
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