Waaree Energies Limited is a flagship company of the Waaree Group, which was founded in 1989 and has its headquarters in Mumbai, India. The group now consists of three publicly listed companies – Waaree Renewable Technologies Limited, Waaree Technologies Limited and Indosolar Limited (the company’s latest acquisition). The group diversified into the solar segment in 2008-09 and has since become a leading player in the industry. While the company is well known for the domestic manufacturing of solar modules, it also manufactures solar pumps, cables and solar thermal products. The company has a strong network of over 1,400 retailers that provide solutions to its clients. In addition, it provides EPC services and aims to build a 1 GW portfolio. Going forward, the company has taken small steps in the green hydrogen space and the battery energy storage solutions space by setting up a factory for lithium-ion packs and cells. In an interview with Power Line, Vivek Srivastava, group chief executive officer, Waaree Group, shares his views on the company’s plans and priorities. Edited excerpts…
What is the company’s current portfolio in the solar manufacturing space?
In the past 20 months we have grown from less than 2 GW nameplate capacity to 12 GW nameplate capacity. Of this, 9 GW has been commissioned and 3 GW will be commissioned progressively in the next three months. In addition, we are in advanced stages of executing 5.4 GW of cell manufacturing capacity. Recently, the company won 6 GW of manufacturing capacity in Basket 2 (W+C+M) under Tranche 2 of the production-linked incentive (PLI) scheme. This capacity is at preliminary stages of execution.
Our solar manufacturing operations began at the Surat SEZ, where we continue to manufacture niche products such as flexible panels. These panels are sold globally in the automotive, aerospace and building industries, among others. Besides, we have two plants in Valsad district, Gujarat. A new plant was established in October 2021 at Chikhli, Navsari district, Gujarat. This site has over 9 GW of module manufacturing capacity while 5.4 GW of cell manufacturing capacity is being put up. The fifth location is Indosolar’s manufacturing plant, which we have acquired. We are currently in the process of revamping it and this strategic move will enable us to be close to the market in the northern region.
Which solar technology is Waaree focusing on?
About 24 months ago, India and consequently the group predominantly focused on polycrystalline modules. Since then, we have upgraded our existing manufacturing lines to 540 Wp plus mono perc technology for all variants. Further, we are producing 650 Wp modules using the same technology. We also focus on bifacial technology and all-black modules with configurations ranging from 400 Wp to 650 Wp, although our lines are capable of producing 740 Wp modules. At present, our focus is predominantly on mono PERC, although these lines have the capability to produce modules of N-type and Topcon technology as well post few upgrades. Going forward, we are also looking at HJT technology, which we are well aware of as we have manufactured and exported HJT modules in the recent past.
How would you address the concerns of some industry stakeholders who are sceptical about using domestically produced modules due to availability and quality issues?
There is a misinformation campaign of sorts regarding the inability of domestic manufacturing capacity to service the demand/pace of deployment. The biggest irony is that while India has 54 GW AC (approximately 75 GW DC) of projects at various stages of deployment, local manufacturers are running at approximately 30 per cent capacity utilisation, and seeking orders from the US, which too will dry up in the next 12-18 months as capacities with huge subsidies under IRA kick in. The following points should be noted:
- Rome was not built in a day. The manner in which domestic manufacturing ramped up from 13 GW to 38 GW by March 2023 in less than 20 months is commendable.
- Domestic manufacturing capacity is adequate both for current deployment and for the next two and a half years.
- In financial year 2023-24, especially during the second half, the capacity for high wattage modules is expected to double, and in 2024-25 it will witness a huge addition due to the impact of the PLI scheme.
- Newly commissioned lines and those under installation/ordering are capable of producing high wattage modules (540-650 Wp) with latest configurations like bifacial and glass-to-glass.
- The top five manufacturers in India can produce more than 20 GW of high wattage modules in the next six months, which is much higher than the requirements of the projects “on ground”.
- Projects of most developers have not yet commenced construction and the modules for these projects will be required in about a year. By that time, the capacity will far exceed all the projects in the pipeline.
The concern regarding the quality of modules produced in India is also misplaced. Indian module manufacturers are offering modules with high efficiency as per international and BIS certifications and their acceptability globally can be gauged from the following:
- The most challenging and quality-conscious markets of North America and Europe embrace modules manufactured in India.
- Independent/Third-party quality certification labs rate Indian-manufactured modules highly as these modules pass stringent tests, which are equivalent to 3x testing standards followed globally, for sustained periods.
- Top financial institutions continue to clear projects with Indian modules.
- Manufacturers like Waaree have also invested and set up world-class in-house testing laboratories.
What is your view on the various government initiatives aimed at promoting domestic manufacturing in India?
The promotion of local manufacturing is a “triad”. One, there is a need for assured and consistent demand. This has been promoted through various tenders but there is a serious gap when it comes to on-ground deployment. Two, there is a need for incentives in the form of capital subsidy. This has been introduced in the form of the PLI scheme. It is essential to reduce the cost of capital. Granting infrastructure status to renewable energy projects and reducing the cost of borrowing will be helpful in this regard. Three, the implementation of fiscal and non-fiscal barriers is necessary to prevent dumping by foreign players and allow domestic manufacturing to consolidate. To this end, basic customs duties, the Approved List of Models and Manufacturers (ALMM) and domestic content requirement schemes have been put in place.
What further interventions are needed?
The following interventions are needed to protect and promote domestic manufacturing in India to not only address the growing domestic demand (30 GW per annum) but also become a reliable supplier to the world where a potential of 50 GW per annum is evident:
- The ALMM requirements for any deployment in the country, which have been postponed several times in the past three years. Going forward, it should not be pushed back any further and be implemented immediately. The extension order should be revoked.
- Imports from countries that have a free trade agreements with India should be strictly monitored (ensuring minimum 60 per cent local value addition to avoid circumvention by Chinese companies). The certification norms of the BIS scheme 1 should not be relaxed.
- It should be made mandatory for all projects under the C&I, rooftop, PM-KUSUM, CPSU schemes to use only modules manufactured in India.
- Grandfathering, if extended to legacy projects, should be executed through domestic manufacturers.
- No further extensions should be given to projects where bidding and award have been closed in the past three years to ensure that India is able to catch up on its deployment, which is already crippling. Currently, only 41 per cent of the projects bid during 2019-21 have been commissioned.
- Proactive steps need to be taken to promote exports. India has a unique opportunity to capture 30 GW of the solar panel market (30 per cent of planned deployment outside China). This is a good opportunity as most countries are moving to de-risk the supply chain.
- Previously available export promotion should be restored and 10 per cent incentive support could be provided to compete with Chinese manufacturers.
- Bidding policies should be broad-based to enable more bidders.
- The confidence of investors should be reinforced for long-term stability through consistent policy implementation.