Waaree ramps up US capacity with 1 GW bargain buy, but controversies cast a shadow
US company First Solar has alleged that Waaree’s TOPCon cells, which it claims are made in India, violate two of its patents. The US is also investigating whether Waaree Energies and Waaree Solar Americas Inc evaded anti-dumping duties.
Mumbai: Waaree Energies Ltd’s acquisition of a solar module assembly unit in a fire sale in the US could help it shore up its manufacturing capacity in that country and diversify its technology base even as it faces an investigation for allegedly evading anti-dumping duties, as well as allegations of violating patents.
Waaree Solar Americas Inc., a subsidiary of Waaree Energies, received approval last week to acquire a portion of the US assets of bankrupt Swiss firm Meyer Burger for $18.5 million (about ₹164 crore). These include an assembly line to manufacture 1 GW of solar modules a year using heterojunction technology (HJT). The Swiss firm confirmed the transaction last Wednesday.
The acquisition was a bargain, especially when compared to the $80-85 million Waaree Solar Americas spent to set up its 1.6 GW facility in Texas. The capacity acquired from Meyer Burger will help the company hedge its technology bet in the US, where it faces allegations of patent infringement by leading American solar cell maker First Solar.
The US accounts for more than half of Waaree’s ₹49,000 crore order book as of 30 June, as per a company presentation. The company is working on doubling its manufacturing capacity in Texas to 3.2 GW by the end of this financial year.
Waaree Energies did not respond to Mint’s requests for comment.
Double trouble
First Solar has alleged that Waaree’s TOPCon cells, which it claims are made in India, violate two of its patents. It has asked that the company either stop manufacturing these cells or license the technology from it, and has threatened legal action if Waaree doesn’t comply.
And on Friday Bloomberg reported that US Customs and Border Protection had begun a formal investigation into whether Waaree Energies and Waaree Solar Americas Inc evaded anti-dumping and countervailing duties on solar cells from China and other Southeast Asian nations by wrongly declaring them as India-made.
The company confirmed the investigation in a press statement Friday afternoon. “Waaree has in the past co-operated with the US investigations and will continue to co-operate in ongoing investigations," it said.
Waaree Energies Ltd stock fell 7% intraday on Friday in response to the news, dropping to ₹3203.95 as of 2:30 pm. The Sensex was down 0.95% at the time.
Exports of solar panels from India to the US have shot up over the past two years, after the Commerce Department imposed tariffs on goods from four Southeast Asian countries that used to make up the bulk of the US’s panel supplies. Chinese-made panels have faced US tariffs for more than a decade.
"Export sales have been yielding higher margins on account of robust demand, specifically from the US, which has disincentivised imports from China. As a result, India has become a key exporter of solar modules to the US," India Ratings said in a note on 2 April.
Since the start of FY23, India has exported ₹34,200 crore worth of solar modules and ₹800 crore worth of solar cells, according to analysts at Anand Rathi. Waaree Energies had the largest share of this, but the exact percentage wasn't specified in the brokerage report.
Technology hedge
Waaree’s Texas unit is for the assembly of tunnel oxide passivated contact (TOPCon) solar panels. This is the most popular solar technology today as it is less complex and expensive, yet more efficient than most others.
HJT is currently the most efficient solar panel technology. However, it tends to be more expensive than others, which has limited its adoption among solar companies. Reliance Industries is currently the only major Indian company backing HJT.
Diversifying into HJT in the US could help Waaree increase its customer base while also providing an alternative to TOPCon. The company will also get access to Meyer Burger’s clients and it is working to secure supplies of HJT cells to assemble into modules at the new factory.
“This capacity is a hedge for Waaree in the US, especially considering the tussle with First Solar," said an equity analyst in Mumbai who asked not to be named as Waaree hasn’t publicly disclosed the acquisition yet.
Looking beyond assembly
Waaree’s US operations comprise module assembly, the final step in manufacturing solar panels. It is a relatively simple process in which cells are connected and packaged into a durable, weatherproof panel. Complexity increases as one goes further up the solar value chain, with cells, wafers, ingots and polysilicon being increasingly difficult to manufacture. The company is investing further up the value chain, with plans for 10 GW of wafer and ingot capacity by the end of FY28.
Waaree Energies is the market leader for solar module manufacturing in India with 16.7 GW of module manufacturing and 5.4 GW of cell manufacturing capacity. It aims to expand these capacities to 25.7 GW and 15.4 GW, respectively, by FY27.
“Waaree is the largest module manufacturer in India," analysts at Anand Rathi led by Sweta Jain said in a note on Tuesday. “Given its scale, market leadership and backward integration across the value chain, we expect it to be relatively insulated from near-term oversupply risks in the domestic module market."
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