Interviews

Exclusive Interview between Mr. Rohit, Head of Indian Subcontinent, REC and Energy Outlook

Mr. Rohit, Head of Indian Subcontinent, REC

Mr. Rohit, Head of Indian Subcontinent, REC Solar

EO:  When did REC Solar first decide to enter the Indian market? Was this journey similar to your expectations? What was the one difficulty/advantage that you did not anticipate?

Mr. Rohit:  Hi, I am Rohit Kumar. I work with REC Solar, heading their Indian operations here. I have 20 years of experience in sales and marketing. REC, the company I represent is a European company, with our headquarters based in Singapore. We are a 20 year old company and a fully integrated player when it comes to the solar industry. If I look at REC’s entry into India, we probably decided to get into India in late 2010. That was the time when Indian government had started focusing on the solar industry. They started coming out with policies to support utility scale and couple of years down the line, with a focus on rooftop market. REC started their journey here with a small team in 2011. Over the last 7 years, we have gone through a good learning phase.

Initial challenges that we faced were that, globally REC’s DNA is more suited towards the rooftop market, especially in developed countries. India is probably one of the first developing countries where REC decided to setup their office. The other key difference being, globally we are catering to the rooftop market on a large scale and India started off with the utility scale market, which basically meant that there’s a big change in the market requirements versus what REC as a company was used to catering to. Obviously there is a cultural difference between different countries and continents. So the same thing existed between Europe and India. So initial time of the business was spent on bridging that gap and it has actually worked out quite well. At the end of it, I say one of the best things that we did not expect, which is the new government gave a big impetus to solar and renewables. Understanding the countries need for energy security, they increased the target to 175GW, which has attracted the best players in the world to India.

 

EO:  Out of all the projects that the company has been involved in, which one is the most memorable for you and why?

Mr. Rohit: The most memorable project for REC in India and myself personally is Innadu. Innadu is the largest newspaper daily in Andhra Pradesh and Telangana. We started with a 6.5MW project with them in 2013 and over the past 4-5 years the customer has gone on to increase their investment in solar with REC being the solar module partner for 20MW.

Basically what we see here is that customers appreciate the quality offered by REC and work with us on a long term basis. It’s more of a partnership than a vendor customer relationship. To give another example, BMW India was the first rooftop customer back in 2014. BMW came back with another project towards the end of 2017 and decided to stay with REC.

In short we have a very high customer retention rate, which means we set the customer expectations right and make sure we meet them. That helps us retain customers in India.

 

EO:  What is the one vertical/product that REC Solar isn’t involved with currently, which you would like to see become a part of the REC Solar lineup in the next 5 years?

Mr. Rohit: REC has been a fully integrated player and our focus has been on multi-crystalline technology all these years. In recent years, there has been a change in the global markets with large number of players focusing on moving towards the mono technology. That is a good thing for REC also as we have been keeping pace with the global technology trends. We are moving ahead and will be making a formal announcement very soon about our first mono technology product.

If I look at it from a vertical perspective, REC is globally the most preferred brand in the residential market and if we look at India today, residential market is in its early days. In the next 4-5 years we expect exponential growth in the residential market and that’s where we look forward to cashing in and building our own market share and creating a niche market for ourselves within the residential market.

 

EO:  Which is the toughest market you operate in, in terms of convincing customers that solar solutions are a viable alternative?

Mr. Rohit: The toughest market in India today is rooftop market. If you look at it, the challenge here is the discreetness of the market. In a recent report, we saw that the top 10 players in the rooftop market have just 27% of the market share. So you can imagine the level of discreetness spread across the country.

The second challenge is that, while things are much better in the CNI market, there is a larger scale which helps bring about viability as energy tariffs are slightly higher as compared to residential market. We see that there is a lack of awareness, so the commercial viability is slightly longer with the payback time being more.

Other challenges being things like net metering and every rooftop being different. It’s not easy to standardize and implement solutions during the early years for the residential market. I think rooftop will be one of the key markets in coming years. It will be a very critical market segment for all industry stakeholders. We see some challenges on the smaller installations as well.

 

EO:  In comparison to government sponsored solar projects, private solar solutions are still a relatively small market in India. What challenges do solar companies have to overcome in order to reach deeper market penetration in this segment?

Mr. Rohit: When we talk about private solar solutions, we are typically looking at CNI commercial and industrial market segments, probably open access. If we look at these consumers here, the key customers, the key challenges they face in this market segment in short term is awareness. Second would be financing at times. We have seen quite a few projects where the customer is willing to setup the project but it takes them quite a while to get the financing done.

Other challenges can be getting things like net metering approval. Discoms are not very happy about losing their premium customers. At the end of it, if you look at it, the customer experience. Rooftop market is flooding with so many installer and EPC companies today and the entry barriers to solar are fairly low, especially in the rooftop segment, which is a private market here.

When you have so many players coming in to the market, there are bound to be bad experiences that leads to customers losing confidence at times. So what becomes very important is that the key stakeholders need to work closely with their customers, tie up all the ends together, get the financing and make sure the installation and engineering is done properly. At the end of it, the solar system is an asset for the customer, so they too need to make sure asset management is done properly, like cleaning of the module has to be done regularly.

 

EO:  Do you think the leasing model for solar power solutions will work in the Indian market? What would be the benefits and challenges in implementing such a model?

Mr. Rohit: If you look at the global markets, leasing has been successful in developed countries. If I look at the Indian market, we try to repeat the same practices in the Indian market. I would say the rooftop market is where this model can be successfully implemented. To start with, it will be on a medium and large scale. If you are looking at it, it comes back to commercial installations like warehouses and similar kinds of environment, where there is large space available but the consumer is not there.

Keeping this is mind, Indian government has come up with a draft policy towards the end of last year. They are trying to create an environment where this business model can be successful in India. It is a very good move by the government and it was much needed for the Indian market.

The other side of it, if you look at it from a residential perspective, I would say it is slightly different for India. We are still not ready to get in to the leasing model for residential. To sum it up, we see a lot of potential in the leasing model, but for commercial customers.

 

EO:  What is the one thing you would change about the Indian solar industry, and the one thing you wish your colleagues in other countries could learn from India?

Mr. Rohit: What we would like to change about the Indian solar industry, and not just about solar only but about all industries, is the fact that if you look at it, South Asia and India are fairly price sensitive. The moment China enters into any new industry, they are successful in making it a commodity market. Again, what our consumers need to understand Is that solar modules is a 25 years industry. We are looking at a product which is 200 microns in thickness and there is a power output warranty for 25 years, even though degradation happens year by year.

It becomes very important to look at the track record of the company and their performance and if they have the right blend of commercial versus quality, reliability and performance etc. These are aspects that we see are generally not considered as seriously as the price discussion is. This is one thing which we would like to change.

If I have to speak about our global counterparts, I think India as a country we can say has developed so many things. But at the same time, we have proven many times that we have done it the right way. Today if you look at the system for utility scale or even a rooftop project of a medium size, India has the lowest costs across the board. While we have gone through a learning curve to achieve it, we have done it quite well. Project developers in the utility scale are doing a great job in terms of quality of installations and I have seen fantastic change in the way our developers and EPC companies have approached this on a larger scale. I think this is a page our global counterparts have already started understanding, at least those that have set up businesses in India.

 

EO:  California recently passed a law making solar panels compulsory for new homes. Do you think rules like that could be feasible in a country like India?

Mr. Rohit: Making solar compulsory is something which India has already tried to do, probably not at a residential level but at the commercial level, for example Haryana came up with an SPU few years back wherein they made it compulsory for any new plot to invest in solar, meaning a certain percentage of their energy consumption has to come from solar. Similarly, Tamil Nadu had also come up with an SPU for solar.

Unfortunately, what we can say is the enforcement was not very stringent in those days, but things have started moving up now and enforcement by the government has been getting stronger. Now, coming to the residential market for this, I think it is a little bit too early for the government to consider making this compulsory for the residential segment. Key reasons being; Solar is not as commercially viable for a residential application as compared to a commercial application. Couple of years from now, yes it could make sense and could be more successful down the road.

 

EO:  India is targeting to achieve its 175GW renewable energy goal. How do you think this will change the economics of the energy industry in India?

Mr. Rohit: I would look at it from a more macro level. India is a country where we have a huge oil deficit. Key challenges for the world today are climate change and sustainability. While we battle these issues on a daily basis, even with the government taking a lot of initiatives. I think if we are able to implement 175GW of renewable, it will take us a long way ahead in terms on energy security, sustainability and climate change. It will make the economy stronger and take us probably a few generations ahead in terms of economic growth, so yes it is very important and is going to help us a lot.

 

EO:  With so many new jobs in the renewable energy sector, do you think there should be more vocational courses to train high quality labor? What qualifications d you look for in potential employees?

Mr. Rohit: If you look at the value chain across the renewable industry, we start from manufacturing of cells and modules, then we get into EPC companies and project development. At all levels, we need semi-skilled and skilled labor. Be it design and engineering or project implementation. I’ll say it is a very important aspect, which the government has identified and are working very closely with skill council to encourage green jobs and REC is one of the few companies that have partnered with them in this endeavor.

To start with, I think one of the most important qualifications from a technical perspective is knowledge of the basics, and sound engineering basics. Second will be, a qualitative thing, which is a passion for learning and being passionate about your job, setting yourself new benchmarks and be motivated for your job. These are qualifications which are very important for someone to succeed in this industry.

 

EO:  Any closing comments?

Mr. Rohit: What I’ll say is, Solar while it has been almost a decade for solar industry in India. We have grown by leaps and bounds, specifically on the rooftop side, we are short of what the government is targeting. I’ll say on a closing note that solar is definitely viable and well beyond grid parity. It is time that everyone starts considering investing in solar, be it on a small, medium or large scale, thus leading us to a world with less carbon emissions a greener future.

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