Business in Solar Cells and Panels - opportunity or risk?

A lot of good and bad work by the various governments and industry make RE or renewable energy in India a promising yet risky venture. Otherwise, with about the highest bases of RE installations as well as globally leading manufacturers like Tata BP and Suzlon in India, we would have seen every other home powered, heated and fed via solar devices, every garden generating power from bio-gas and SPV for the neighbouring street, farmers and cooperative societies prospering as energy producers from biomass and wind.

The solar programme in India is as old as the 70s, with the CSIR first identifying this as a promising field in the early 70s, the setting up of CASE - Commission for Alternate Sources of Energy at Mrs Indira Gandhi's behest in 1980, leading to the DNES - Dept of Non-conventional Energy Sources by 1983-84 that finally got Ministry status as MNES under Narasimha Rao in 1992. Simultaneously, States set up Nodal Agencies to facilitate development, manufacture, marketing and installation of RE products and Gujarat took the lead with the establishment of GEDA about 1978-79 under the Janata Party Govt and visionary Chairmanship of Dr Nanubhai B Amin.

The spadework that lead to India becoming the largest installed base in solar energy was done by these relatively non-bureaucratic departments during that era. A large number of power, thermal equipment and systems engineering companies progressively entered this field, from the mid 70s to the 80s. I was also involved in installing about 1000 panels of solar-thermal panels for industrial and domestic heating and few scores of SPV systems. All RE systems were marketed under the SNAs' aegis and buyers, who had to be end users, got half or more their installed cost subsidised or reimbursed according to the policies of that day, between the Central and State Govts.

Although the Public Sector doggedly stuck to their protected monopoly in SPV cells and panels, companies like CEL and BHEL took the initiative to supply panels via the Nodal Agencies to systems integrators who installed SPV-based community lighting solutions in several thousand villages in each State.

In 1985, Rajiv Gandhi's Govt dealt a body blow to the RE industry, when perhaps his swish set of advisers made him slash the RE provisions in the 7th 5-yr Plan from Rs 400 Cr to just Rs 7 Cr. This put paid to all subsidised projects and murdered the market prospects of large companies, which were started with large projected demands endorsed by the licensing body, mostly the DNES and Industries Ministry. By then, SPV imports leading to phased manufacture manufacture of SPV panels were allowed. But Mr VP Singh, as Finance Minister sat over all foreign collaboration files citing the need to save forex.

Rajiv Gandhi Govt. had, by then also shot down the silicon foundry proposal of IPCL-Hemlock, asserting that there was enough silicon facility between Mettur Industries and Semiconductor Complex Ltd of Chandigarh, the latter of which was gutted in a fire before commissioning and never re-commissioned. Thus we never saw PV-grade silicon made in India in the required quantity. Otherwise solar panels would have perhaps been household commodities by now!

In 1989, VP Singh's Janata Dal coalition Govt came to power. It agreed on private sector importing solar cells towards a Phased Manufacturing Programme for panels but the refusal to involve the IMF etc again starved the economy of foreign exchange and imports, again restricting the import or manufacture of solar cells to the public sector. Hence a company like Tata BP Solar had to hand its know-how and import sources to BHEL and in exchange receive priority allotted deliveries of panels. This put severe restrictions on the industry and business opportunities.

Other companies are still reeling under losses inflicted by these whims to this date.

Meanwhile it took the clout and massive resources of the Tatas to continue to develop the 'balance of systems' including charge and load regulators, batteries, suitable lamps, fans, invertors, etc as needed to complete a SPV power system. They insisted on the highest quality standards and delivered only complete systems, initially under a 5-year comprehensive warranty. This inspired confidence and saw sustained growth, while its competitors were veritably wiped out.

Risk-hedging is perhaps one reason why manufacturers like Tata BP who started out as dedicated SPV panel and systems manufacturers felt and still feel the need to also manufacture or market solar-thermal panels and systems. The latter systems also have a faster pay-back period than SPV.

Yet others like Shell, Siemens, GE, Philips, National and several others have entered the field but lack the long-term perspective, perseverance and commitment to survive this market. However, we see some progress by smaller players like SELCO, Solite, Solkar and few others who rely on Chinese/East Asian imports of SPV panels.

Amorphous silicon offers tremendous opportunity to SMEs and MSMEs by being ready-made in large quantities, amenable to scaling, shadow-tolerance and although of a lower efficiency, available at half the cost per Wp compared to crystalline silicon. Small manufacturers can import these 'a-Si glass' sheets, cut them according to the desired rated voltage and current, frame and connect them as finished panels without any sophisticated production facilities.