India has huge potential to emerge as a leader in renewable energy, especially solar and wind. However, the country is lagging behind, especially in terms of investment and R&D. Leading market players call for aggressive measures that would facilitate a steady growth for renewable energy in India.
GreentechLead had an opportunity to interact with Ketan Mehta, CEO, Rays Power Infra, recently to gain insights on the company’s growth and the current scenario of solar energy market in India. The exchange follows:
Explain the company’s growth since inception.
Ketan Mehta: Rays Power Infra currently boasts of a top line of 300+ Cr. with EBITDA of 25 Crore. This year we plan to clock a top line of 800 Cr. with EBITDA of 75 Cr. We have seen our revenue grow 55x in the last 5 years at a CAGR of 172%.
What were the challenges faced during setting up the company? What was your strategy?
KM: Establishing the credibility of solar as a viable solution, establishing credibility of the company in conglomerates and developers, dealing with rapid changes in Solar technology development, lack of data available for this sector with the government, engineering and commercial sides of the project, Land acquisition before even the start of a project were the main challenges we faced when we started out.
The sector has grown exponentially since, and a lot of gaps have been filled on the data side, while we have worked hard to make land acquisition and project development our core strengths in the industry.
Explain your association with Hilliard’s Energy to jointly develop 150 MW solar power project, entailing an investment of $130 million.
KM: We signed a 150 MW project development term sheet with power producer Hilliard Energy. We will jointly develop 150 MW of solar power project with a total investment of USD 130 million (about Rs 870 crore). This partnership merges the fund-raising skills of Hilliard Energy with the execution capabilities of our company. We would like to achieve a target of 150 MW in the next 12 months.
Briefly explain your focus on residential projects with its rooftop commissioning services
KM: We have come up with a very innovative solar solution wherein we want to commoditize solar energy which would enable it to reach the common man. We have introduced solar products which can be installed on residential, commercial and industrial rooftops without any hassle or major changes and can be directly plugged into the existing meters of the rooftop owner. The rooftop owner on the one hand is contributing in energy conservation whereas on the other hand is saving a lot in electricity bills by using solar power instead of electricity from discom. We will soon be launching our products on online portals by which any interested consumer can order this product online and will have an option of installing it themselves or they can contact us for installing the same. This concept will be a game changer in solar industry as it will connect the common man with the solar industry. At present, solar is considered as a rocket science by many in India but with this concept we will put solar in hands of common man.
On the rooftop sector, we have strived to commoditize solar solutions by using modular components and design to transform Solar Solutions to consumer products. Our goal is to have these systems arrive at the customer’s doorstep like any consumer good would, and to have rapid plant execution on their rooftops within 7 days of order placement. These fixtures would be 100% portable for future also – the system moves with the customer – wherever they go.
The Role of Government Policy in the Development of rooftop solar plants?
KM: The scope for solar products (retail, domestic, institutional) and services is limitless. For instance, India’s current targets for rooftop solar are 40,000 MW by 2022, of which only some 1,000 MW have been accomplished. Factor in the fact the more than 75% of India’s buildings by 2030 are yet to be built, and you see that this segment has an endless demand for at least another 30 years. Solar solutions cut through sections to provide value to each – investors invest in large scale power plants to earn reliable returns, the urban population installs to eliminate expensive electricity bills, and the bottom of the pyramid installs to have reliable power. We believe, there is no need of special push for incentivizing the consumers intend to install solar rooftop. But yes, current incentives along with some tax incentives for households investing in solar rooftop may be extended.
What are the key selling points of rooftop installations?
KM: On the urban segment, year on year increase in power tariffs and cost of diesel to fuel gensets increases cost of power for customers. Our base power has been and still is coal – which will only get more expensive for India as times go by. So high tariffs, definitely drive customers to hedge their energy costs for 25 years by installing solar power.
On the rural/semi urban segments, reliable power drives growth. With large parts reeling under power losses, solar power with battery solutions – even as small as a simple 100 W panel with one battery – can power homes and give reliable power to people. This impacts lives on so many levels – women open up new night vocations to earn money, children can study at nights, and the overall safety of the village increases due to lighting.
Challenges faced during the installation?
KM: Land levelling was a big challenge in this project as the land was highly uneven which prevented module mounting structures from being installed in an uniform manner and was resulting in requirement of greater land.
Explain the market potential and financing opportunities in India
KM: 1.2 Billion Population…… INR 5 Trillion…… 100GW solar capacity. For Rooftop consumers, best financing option would be RESCO and for Ground-mounted utility scale projects, debt financing with low cost and low risk is preferable apart from equity funding.
Give five suggestions to government to improve the industry
KM: The five suggestions to the government and the sector would be:
1. Government should make funds available at low cost by channelizing funds from pension and other such fund sources.
- Central Government may breed home grown solar equipment manufacturers and should fund them for R&D.
- Developers should respect the money of Investors; focus on the value creation by play safely aggressive.
- Government should focus on the quality of modules before letting them enter the country.
- Instead of utility scale of 500MW or 750MW solar parks, government may have to focus on distributed generation at the load center for capitalizing allied benefits for the area, to minimize losses and to minimize the noncore investments for better ensuring of energy security.
Rajani Baburajan