Corporate Report

Published: Dec 29, 2021
Updated: Dec 29, 2021

Topaz Solar Harnessing the sun in Odisha

The 1,200 MW solar module manufacturing plant of Topaz Solar is fast coming up at Bandal in Odisha, the first of its kind in the state and one of the largest module manufacturing plants in the world. It is scheduled to go on stream in the next fiscal year ending March 2022, reveals Ganesan Natarajan, Managing Director of Topaz Solar, in an interview to Corporate India. He says the project is being implemented in two phases, with the first phase with a capacity of 550 MW taking shape at a cost of Rs 238 crore.

Excerpts from the interview:

Corporate India: What are the present strengths of Topaz Solar? What is its current set-up, installed capacity, production facilities, etc.?

Ganesan Natarajan: Topaz Solar is involved in installation of rooftop projects as well as ground-mounted projects in India as well as abroad. Topaz Solar has already established its business in Malaysia and is entering other ASEAN countries. Currently there are no production facilities and we are using existing manufacturers to get OEM production for the solar panel requirements

CI: Can you elaborate on your upcoming project in Odisha?

GN: Topaz Solar has already signed an MOU with a French company for developing bi-facial solar modules with an initial capacity of 100 MW and later expandable according to market requirements. We have technology transfer as well as 100% buy- back arrangements. We expect this project to take off in financial year 2021-22.

CI: Technology, R&D and cost effectiveness — all three matter a lot for sustainable and accelerated growth of solar power generation. How is TSPL placed in these areas?

GN: Yes. In the last 3-4 years the solar industry has undergone enormous changes in terms of module efficiency and the cost factor. Most companies globally are involved in constant technological upgradation. The solar module has been upgraded from 230 Wp to almost 600 Wp and the cost of solar modules per Wp has come down by more than 25~30% in the last 5 years.

Topaz Solar is involved in two different projects for solar storage and solar cell technology using hydrogen and graphene. Hydrogen and graphene will replace the existing conventional solar cells and batteries and will be much more efficient and cost- effective.

With the current plan for converting diesel vehicles to EVs in the next 4-5 years, battery storage and fast-charging technologies are the need of the hour. A lot of foreign companies are entering India. This will lead to huge investments in manufacturing batteries and setting up fast-charging stations. We expect that this will be a game-changer as India is fast becoming a net renewable nation, with the current government under Prime Minister Modi giving a different perspective to renewable energy, especially solar energy.

India is fast becoming ‘Atmanirbhar’ in the true sense and we hope that India will be a key player and will dominate the solar industry in the next 2 decades to come. Wind energy will also see huge growth in India as most of the giant wind turbine manufacturers are shifting their base to India from China as well as Europe, with huge manufacturing capacities being set up in India.

CI: Solar cells, panels and glass all have become the buzz words today. Going forward, would you be interested in expanding your horizon by entering other verticals also? Kindly share your medium- to long-term growth strategy.

GN: Yes. It is imperative for us to develop complete the circle and go for forward and backward integration of the supply chain, from silicone, ingots and wafers to cells, solar modules and storage technologies at the earliest. We hope that India will be the technological and R&D hub of the world in the next decade to come. Companies from Japan and Europe are already in India, looking for developing manufacturing facilities here through their own/JV plants.

No other country has this huge scope for development and consumption of solar business like India for the next 15- 20 years. Renewable energy will soon take over substantial capacities from coal-based power production. In the last 6 years, we have seen an almost 10-fold increase in capacity addition in terms of solar power plants.

CI: What sort of opportunities and challenges do you envisage for solar power generation in India? Where do you see TSPL by March 2023? What are your immediate priorities?

GN: There are huge opportunities for renewable energy, especially for the solar industry, but financing is definitely a challenge in terms of indigenous financing through our Indian banks. The power tariff is becoming lower and lower but the right kind of financing with a longer gestation period is not seen proportionate to the current requirements. Though we call it ‘Atmanirbhar’ Bharat, with the current tariffs Indian bankfinanced projects are still struggling to cope with repayments. The real cream of such opportunites is still lying in the hands of foreign firms who have debt and equity brought from abroad. By 2023, TSPL will be playing a substantial role in rooftop projects as well as R&D of hydrogen and graphene. Our immediate priorities are to syndicate the debt for our project.

CI: Going forward, competitive tariff bidding might pose a real challenge in maintaining the operating margins of solar power projects. Kindly share your viewpoint.

GN: Yes. With the recent tender for 500 MW in Gujarat set at Rs 1.99 per kWh, things are going to be tough. Operational margins are very slender and any margin of error will lead to failure. Indian financing needs to be proportionate to the tariff. Most of the recently developed projects are struggling to meet cash flows and repayment if it is borrowed within India.

CI: Anything in particular that you would like from the government to accelerate the pace of solar power generation in India?

GN: Yes. As mentioned earlier, solar-specific financing schemes should be designed to suit the current tariff and long repayments. This should happen sooner than later, else most projects will start failing. For example, the current increase in steel prices has disturbed the equilibrium of solar installations which are already finalised or were bid earlier.

CI: Any other point that you would like to add?

GN: Apart from the solar business, Topaz Solar is entering into partnerships/JVs with some European companies for developing compressed biogas plants under the SATAT scheme. We are expecting huge opportunities in India in the next 3-4 years.

CI: What are your views on the India–US renewable energy partnership? Do you see any developments with the new Democrat government in the US?

GN: The United States and India have a long and successful strategic partnership in the energy sector. The energy cooperation between the two countries, which is technical, economic, and bilateral, is strengthening year after year. In November 2009, the United States and India launched the Partnership to Advance Clean Energy (PACE), which is working to accelerate inclusive, low-carbon growth by supporting research and deployment of clean energy technologies. During their first bilateral summit in September 2014, Indian Prime Minister Narendra Modi and US President Barack Obama announced a commitment to strengthen and expand PACE through a series of priority initiatives. When the two leaders met again in January 2015, they announced several new activities under PACE.

This partnership became almost dormant in the last 4 years. With the new POTUS Joe Biden taking over the reins, we expect this partnership will take off.

Over the past year, India has revised its renewable energy target to 175 GW by 2022. The national solar target was scaled up by five times, reaching 100 GW by 2022, of which 40 GW is expected to come from solar rooftop. The activities of the PACE initiative are aligned to support India’s ambitious clean energy targets.