Ashish Agrawal, Head-Solar, Hero Future Energies, says there is a buzz in the market and is focused on the rooftop segment.
Take us through the growth of the renewable sector during the last two years?
In last two years, renewable energy sector has seen lot of activity. The new government has given a lot of impetus. Target of 175 GW has given a totally new dimension to the sector. From being a fringe player, it has become the driver of the sector. Another significant change that has happened is the emergence of solar. Replacing wind, solar is now the driver of RE.
Tell us how the policies have helped. Have you witnessed any signs of improvement in the last year?
Few of the government initiatives that seems to had have a major impact are:
Has this helped demand?
Among all the policy initiatives taken by the government, I think demand creation is the most significant policy initiative taken by government. Market demand of 8000 MW has helped bring scale to the solar industry.
It has attracted global RE players. Long-term domestic demand trajectory will also help attract investment in manufacturing.
The RE Invest summit earlier this year saw huge amounts being pledged. How many of these do you think will be actually realised?
Huge amounts have been pledged but apart from money, implementation issues are also important. Land acquisition and avail¡ability of trained manpower are going to be key challenges. Developers need to manage project execution. The government has its part. Developers need to ensure quality of projects and timely delivery. There is enough money available for players who can deliver on time and execute quality projects. Implementation track record and quality of projects executed in the first year will determine the rate of growth.
What is a realistic target of projects that can be financed for 2022, as opposed to the government´s RE target of 176 GW?
100 GW seems to be a realistic goal.
Tell us about rooftop solar, your area of focus, and the work you have done in this segment?
Rooftop solar has huge potential. We have already commissioned close to 5 MW in the first year itself. This financial year, we plan to commission a cumulative capacity of 20 MW. Hero Future Energies will focus on government, industrial and commercial customers. In the next four years we plan to install about 350+ MW of rooftop projects in India. Rooftop is still in its early stage but we foresee exponential growth in this segment. Rooftop systems eliminate the cost of distribution system and T&D losses.
What are your immediate future plans in rooftop solar installations?
We have recently won a SECI tender for installing about 3 MW+ in five different states, namely, Haryana, Punjab, Karnataka, Maharashtra and TN. We have also won 1 MW tender from IPGCL. We are also working with several reputed private organisations.
To what degree the ´Make in India´ campaign has helped achieve growth? Will it help to generate momentum?
Investment in manufacturing happens only if investors have long-term demand visibility. After the RE Invest, a lot has happened on the project development front. Based on the increased demand, it is expected investment in manufacturing will follow investment in projects. Probably we should wait for some more time before we start analysing impact of ´Make in India´.
Although banks have also pledged support to RE projects during RE Invest summit, how much of the current crop of projects according to you are actually ´bankable´?
Bankability of the project depends upon the project economics. We have seen very aggressive bidding in solar. Financing of projects with very low tariff has raised question on the feasibility of projects. Developers need to focus on timely execution, project quality and viable tariff. If the project has combination of these three factors there is enough funding currently available.
What financial options are available for funding of RE projects in India?
RE projects require long-term funding. Most of the projects in India are financed through project finance. There are various options for financing renewable energy projects. Indian Banks, NBFC foreign banks, development Institutes like IFC and Exim bank of some countries are also very active.
Where do you see the future of renewables in India over the next three-four years?
Next few years is expected to be very eventful for RE. There is lot of buzz in the market; this has attracted a lot of foreign companies. We expect at least 50 GW of installations happening in next three-four years. We need to focus equally on transmission infrastructure otherwise it would be difficult to evacuate power from RE projects. Evacuation issues can derail the entire sector. As the percentage of RE power in the grid increases, it would start affecting the grid. In order to maintain grid stability, we need to work on combination of storage and forecasting of RE power to make RE power despatchable.