Falling tariffs: A market correction phase for solar players

While promoting the solar industry, the falling tariff of solar panels is causing a grave concern among the players. Here, the industry experts discuss what and why it happened and whether the EPC players are on the verge of shut down, as per reports. The players also discuss what it takes to have a healthy panel life.

The falling prices are attributed to decrease in the manufacturing cost of solar panels. Not just the manufacturing cost but the major innovations which are taking place in the solar industry are leading to a price drop in solar panels in the market.

Indian EPC players to shut down
Ashok Kewat, Managing Director, Ashone Solar Solutions Pvt Ltd says, “I feel there are two sides of it; one being the dripping tariffs and the other is that the EPC players feel that government tenders are being quoted at the lowest possible prices with less than ₹ 3/watt. This is driving intense insecurity amidst the investors as their returns too are hitting the lower end.”

The government should give a serious thought on promoting the solar industry and regain their investors’ confidence towards the industry. To promote the industry, the investors should have more confidence on the government policies. The recent actions taken by the Karnataka Government has shaken the entire solar industry because the rates levying on India tariffs didn’t go well with them. In such situations, Kewat says, “Both Central and State Government must take some stern measures seriously on the tariffs and stick to the cost that was negotiated while installing the power plant and ensure that the tariffs remain the same.”

Samir Mehta, CEO, Bergen Solar says, “I think EPC players are in this situation because of the developers attitude of grabbing the project in reverse auction at any cost and then directly buying or demanding certain brand modules and inverters and asking EPC players to integrate them in the power plant without willingness of the EPC players. So where is an engineering? Also with prices of modules and all key components of solar power plant is already open on various websites, there is no room for play by EPC players.

So currently EPC player job is to block their working capital and execute the project and then struggle to get last mile payments which are often linked to getting final certificate from government body by developer.

So with less profit, scale is an important. So current situation of EPC industry is in consolidation stage and small players will have to give up the business in central utility projects and focus on rooftop projects and same pattern will follow in that segment also. In long term only big players will run this industry.

Bharat Bhut, Director, Goldi Solar says, “The companies that are on the verge of closing are EPC companies who take contracts. Owing to competition, the price of the EPC plants has gone down. So, few of the companies even after their excellent project works don’t get their deserved dues.” India is a price sensitive market and the normal trend is that the customers want products that are very cheap. So, in this price sensitive market, the quality makers are not valued. Due to high competition, EPC projects are considered not-so-high technical job which is true to some extent. Since the solar industry is booming, people, technical and non-technical, from other sectors want to jump into solar and start a business out of it; the major reason that quality is not maintained, says Bhut.

Non-regulation of net metering
The DISCOMs’ behaviour towards this issue is not appropriate and they are deliberately delaying the processes which are affecting the implementation of projects of net metering. Kewat says, “DISCOMs attitude is not going well with the people and somewhere with the industry also. I think this is high time for the government to have their policies reframed that can go well for the EPC players also.”

Maintaining a solar panel for more lasting
The maintenance cost of a solar panel is almost negligible in terms of the cost incurred to maintain a solar power system. The panels must be cleaned once or twice a week, depending on the environment. If the panels are placed in open and is exposed to dust and mud at large, then it’s essential to have the panels cleaned at least twice in a week. Otherwise, the panels can be cleaned once or twice in a month. Kewat says, “When a panel is maintained well, it generates a constant or additional amount of energy throughout the day.”

Maintaining a solar panel, thus, is a simple task. According to Rajan Shah, MD, ECOPROGETTI Production Process India Pvt Ltd., we just need to be very careful while cleaning the glass of the panels. Since the panels are exposed to the exterior dust particles of the atmosphere, it’s important to get the panels rid of the dust residue. No other specific maintenance is required for any solar panel.

A manufacturer must use long, durable and reliable materials. The general performance warranty of a solar panel is that of 25 years and 10 years of product warranty. However, if we consider or calculate the life warranty of solar panels available in the market before 2010 with the ones available right now, you will see huge improvement in the materials being used; improvement in sense of the raw materials used. Bhut says, “Though we give a warranty of 25 years, our products will last anywhere between 25-30 years or more than that. This is because the raw materials used are of R and D level. The production process, which earlier were done manually are now being automated. So, the proven raw materials’ product life which was standardised for a 25 years performance, now has additional 10 year’s life. This is, in my opinion, much more than what other companies are offering now.”

Kamat is of the opinion that no panel requires any harsh maintenance. One pre-requisite is that the solar products and solar panels must be gently cleaned in every 3-4 days. Since the panels have a glass surface and are placed openly in the surrounding, they are prone to draw dust particles. It’s thus extremely important to have the panels cleaned twice a week so as to get a constant amount of supply.

Maintaining the health of a solar panel
Solar panel’s health can be remotely monitored through SCADA system and can be tracked on a regular, daily or monthly basis. Kewat says, “We conduct regular analysis and create a monthly chart describing the performance of our solar panels. We also conduct physical inspections of our panels to understand and realise their condition. On detecting any wear and tear or any sort of degradation within the panel or on the exterior side of the panel, we use thermal imaging sensors on the complete panel so that any minute damages to the cells are captured easily and revived with time.”

Pramod Kamble, Director, Aarushee Solar Energy Llp says. “All the inverters that are currently in use provide remote monitoring with sustainable wires.” You can see your yearly/monthly/daily generation with particular software. After cleansing, though you will find but minimum 13-14 per cent deviation, there will an increase in generation too which is a good sign that your system is healthy. This can be done easily by a non-technical user by visiting the health monitory system on a day to day basis or weekly basis.

Government tenders are being quoted at the lowest possible prices with less than ₹3/watt, driving intense insecurity amidst the investors.
Ashok Kewat, Managing Director, Ashone Solar Solutions Pvt Ltd

The quality parameters for modules and inverters are decided by the developers and not by the EPC players
Samir Mehta, CEO, Bergen Solar

Owing to competition, the price of the EPC plants has gone down with few of the companies even after their excellent project works don’t get their deserved dues.
Bharat Bhut, Director, Goldi Solar

Panels, exposed to the  exterior dust particles, should be rid of the dust reside for an efficient maintenance
Rajan Shah, MD, ECOPROGETTI Production Process India Pvt Ltd

A mon-technical user by visiting the health monitory system on a day to day basis or weekly basis can check the health and generation rate.
Pramod Kamble, Director, Aarushee Solar Energy Llp