EQ in Exclusive Conversation With Mr. Sunil Badesra, Country Head- Sungrow India

1. How many Inverters have you supplied to India till now? What is the target/expectation for this year and next year?

In India, Sungrow has achieved 9.5 GW shipments up till now, and we are expecting to do another 1.5 GW of dispatch in the next four months, with a target to cross 11 GW by the year-end.

2. Please share the Road Maps – Pricing, Technology etc.?

Inverter plays a major role in optimizing the cost, and Sungrow provides cost optimization to the customers through innovative solutions. Inverter cost is around 6% of the total project cost. The tariffs are going down, but it would not affect the project cost majorly.

In past, a gradual decline in prices has been observed, however in recent past the raw material cost shown rising trends, due to this, if continues, the inverter prices can go up in the future. Let’s see how the market changes and Sungrow always move along with the market.

3. Budget 2021 increased Import Duty as BCD on Inverters in India. Do you think the government will increase it more in the near future? If yes, do you plan to make it in India?

Sungrow already has a manufacturing set up in India, and we’ve been pushing the government for the last three years to impose the duty. The government has imposed a 22 percent duty on inverters which is still less according to us. Many competitors have dropped the prices, and rather than focusing on local production, their focus is on price reduction.

With a unique perspective, our focus is on the manufacturing setup in India and therefore, we are expanding it from 3 GW to 10 GW annual production including PCB manufacturing line and Testing facilities. Further, Sungrow is committed to improve the capacity required as per the market demand.

4. The Government of India has been voicing concerns about malware, etc. in Solar Inverters and its possible effects. What are your thoughts?

Malware issues would not arise, if the server used in any project by the customer is used locally. Maximum developers and EPCs in the market are using their own servers without depending on Chinese servers or suppliers. Sungrow doesn’t have any server facility in China, we can say that no data being assessed in country other than India.

Recently, the government asked Sungrow to submit a declaration that all the data obtained from the inverter will remain within India and Sungrow confirmed the same. In my opinion, the malware concern would not be there if developers and EPCs use reputed brands. The risk might exist with the small Tier III kind supplier where the major focus is on the pricing. Such challenges are unlikely to occur with global brands.

5. What are the biggest challenges in India’s goal of 175 GW by 2022 and 450 GW by 2030? How much can we achieve by 2022, 2025 and 2030?

In my opinion, India can achieve the target of 175 GW. The next target of 450 GW by the year 2030 is also achievable. The coming policies are supporting the mission, but the challenge is that the policies need to be planned in advance. Stable policies are required to take care of inverter, modules or other suppliers whose components are used in the solar projects. We want the government to address those challenges.

6. What are your views on BIS and other tariff barriers?

All the inverters that Sungrow is selling in India, especially Make in India inverters are BIS certified. This is a good initiative, but policy deviations keep on happening. Few challenges exist as well, for instance, we don’t have any lab that can test 1500V inverters, If such challenges are addressed in advance while drafting the policy, it would help all manufacturers as well as the government at implementation and execution stage.

7. What are your views on Inverters- Make in India?

Sungrow is always promoting “Make in India”, which is the best part where we talk about such a big GW capacity in India, which is not limited to modules but inverters, cable and the major components used in any solar project also part of it. SUNGROW have a 10 GW setup here in India.

8. Please tell us about the World Market Scenario including China, and its impact on pricing and availability of inverters in this year and Expected Pricing & Availability in next year?

Fortunately, we are not facing challenges that are generally coming in the module segment. We have seen that raw material costs, especially silicon, and others have gone up, affecting the pricing of the modules.

The fluctuation in pricing is hampering the projects in the market. Fortunately, this sort of thing is not happening in inverters. The raw material cost is going up, despite that, it is manageable so far. If it keeps rising, then inverter prices will increase globally as well.

9. What are the current opportunities and the biggest challenges in Indian Solar Market?

A lot of big projects are coming in all segments like Utility, C&I, the MSME sector and other sectors like residential are also booming. C&I segment is playing a vital role in achieving solar target. There is no limitation in residential. We have such a big population and potential in India for the residential segment. Currently, I think it is not going up to the mark, but I would say that it will grow a lot in the coming years. In India, we are full of potential which can be utilized in the solar segment.

From challenges perspective, especially, in the residential segment, the policies keep on changing. There are some challenges related to government policies, which is a major parameter not only for the investors and manufacturers but for overall solar development growth like Net metering policy. Such problems come up regularly until the policies are not aligned as per the market requirement.

10. What are the expectations from the Indian Government, Policy Makers and Regulators?

As a manufacturer, we want the kind of PLI scheme, which has been given to the module manufacturer and missing for the inverter manufacturer. In my opinion, if such motivations also continue for inverter manufacturers, then it will help the solar and renewable market in India.

Aside from this, the policies/guidelines that hamper the project timeline and other things should be avoided. As a supplier, we understand if delay happens because of the pandemic, but like in the case of tariff revision, they are expecting revision in products and pricing as well, which negatively impact the market. These kinds of things should not happen as it demotivates manufacturers and developers.

11. What are your views/opinions on Aggressive Bidding despite many challenges?

Aggressive Bidding is amongst the things that we don’t like either. The inverter is a small contributor to the project cost. At least, we want it to stop here. Beyond this, it is going to hamper the overall Indian solar industry, probably in terms of quality.

Some suppliers may compromise, but Sungrow is not on that list. Tariffs should be reasonable so that everyone can survive, and the Indian Government, as well as end-users, can benefit from them. We are innovating products without compromising the quality and continue to offer the products that can optimize the customer’s BOS cost.

12. The recent aggressive bidding by various developers keeping Solar Tariffs in the price range of Rs.1.99-2.50 per kWh in various Solar Tenders. What is your view on the viability, Costs & timeline pressures, Resource Challenges?

Inverters are playing a very vital role in optimizing the BOS cost for the customers. As a solution provider, we always suggest to customers the kind of product they need as per their project requirements. Accordingly, they keep on optimizing their project cost. That is the reason they could achieve these tariffs.

We have all products that can suit any kind of requirement. So, it is up to the developers which kind of product they want to use for their project.

13. Kindly enlighten our readers on the performance of your Inverters in India in various geographic locations and customer feedback?

Seven years ago, we commissioned our first project with a string inverter, and it’s almost six and a half years since we first installed our central inverter. The same customer has given us multiple orders in the last six years, reflecting our product quality and service offerings.

Sungrow has wide experience in India. In the Rajasthan area, string and central both are commissioned in high-temperature zones and operating perfectly fine. We have supplied our string and central inverters in other areas, like the ones near the sea, and performing well. So, we have products that can sustain all kinds of environments. So, geographic location of project is not a challenge for us. We have many performance appreciations letters from our customers in all the segments.

14. We’d like to know about some noteworthy projects, case studies of solar plants built using your solar Inverters.

One of our projects is in Rajasthan where customers tried both central and string inverters. In recent days, there is debate on which inverter (central or string) is more suitable for the projects. The customer has done that kind of project and testing where they have used our hosting in central inverters, and they are using it for more than two years.

Now, the customer has realised through experience that there is not much difference in generation between string and central inverters, which is generally claimed by only string inverter suppliers and the claim of generation difference between string and central inverter is more than 3% or 4% ” is not the truth.

We have both products and say with the transparency to our customers that string and central inverter delta depends on the land and other factors. That is one of the case studies that we have done in India with the support of our customers, and we got to know that the string inverter is suitable for small kinds of projects and in hilly terrain whereas central inverter is recommended, where land is not the issue and the land is big and flat.

15. Please tell us in brief about your company.

Sungrow India is a big team, and we are continuously growing. It is more than seven years in India, and we are going to be in this market for a long time. With the kind of products and solutions we offer to Indian customers, I am confident that Sungrow is going to remain in this market forever.

16. What is the size of your company in terms of manufacturing capacities, growth chart, future expansion plans, revenues, shipments etc.?

In total, including India and oversees set up, Sungrow has 90 GW of annual production capacity of inverters. Worldwide, it is happening somewhere in between 140 to 150 GW of solar development. Sungrow is ready for fulfilment of future demand; therefore, we have a capacity of 90 GW. We have storage solutions as well and a separate set-up for that. In terms of finances, Sungrow is a listed company so everything is open. In India, we have 10 GW manufacturing set up and we have the service team and operations set up. Everything is ready in India.

17. Describe the various technologies and their suitable applications such as Central Inverter, String, Micro Inverter, 1500V inverter, Outdoor, Container solutions etc.?

We have the products which suit the requirements of all the customers as per their project. We have string inverters, majorly used for the rooftop segment and utility-scale (provided the land is uneven). If it is small project size, we always recommend from our side that string inverters are better. Whereas in case, customer has a big land, and the land is flat, it is always recommended from our side to use the central inverters.

On technological front, 1500V inverters are already there in the market. Looking forward, we are expecting that this voltage is going to be higher, may be 2100V and 3000V is going to come in the coming years. In terms of micro-inverter, it is a bit costlier. So as per the Indian market scenario, I would not recommend these kinds of inverters because we have seen many companies which keep on launching new products but later on when products need service, they are not able to provide them. So, I would say it is better to use new technology.

The new technology keeps on coming in string and central inverter as well. We have all the products which are required by the Indian industry. We are continuously launching our new innovative products, in future also, we are ready for the kind of requirement that comes.

18. Kindly comment on Energy Storage as a game-changer, its technology, cost trends etc.

In energy storage, recently there were two tenders – one in Chhattisgarh and the other one is in Leh. We have proposed our solution to EPCs and the developer, who are bidding on this project.
In past, the storage was not taken so seriously, and now it is considered seriously. Still, the storage solution is not getting viable. Customers are expecting better pricing, but we are also dependent on our vendors.

So, battery pricing is going to take some more time. I think the EV and storage market is going to move together. Maybe after three or five years, we can expect to see some sharp price decrease in the battery pricing. After that, I would say that the energy storage market will pick up. Right now, projects are happening but not to that level. Energy storage has good potential, and Sungrow is also looking at it.

19. Kindly highlight your product, technology & company USP’s, distinctive advantages etc.

Sungrow is a Global company and that’s our major strength. Our products have been accepted across the Globe, reflecting the quality and different kinds of solutions the company provides. We keep on growing and launching new products as per customer requirements.

20. Explain various guarantees, warranties, insurance, certifications, test results, performance report of your inverters.

Sungrow already have all kinds of international test certifications, which are required for any kind of inverters. We have done that even for Indian factory as well because we know that production location has changed so we want our customers to have that confidence in our products. That’s why we have different certifications for India. We are having all the international standards, even the local standards like the BIS standard. We already have those kinds of documentation and all the third-party lab certifications with us.

21. What are the trends in new manufacturing technology equipment, materials, processes, innovations etc.?

Till now, majorly assembly was happening in the production in India. Sungrow is taking the next step now, even though we are setting up the assembly line manufacturing here. All the PCBs used inside the inverters are going to get locally manufactured. We are doing this because we have a long-term plan to stay in India. We want to make as much as we can make this product locally and support ‘Make in India’ initiative.

We are targeting to have at least 50% of local content, by this assembly line manufacturing under the latest technology, testing laboratories and other things in our factory. We are going to have a world-class testing facility in our factory.

22. What is your commitment to the solar sector in India?

Our commitment to the solar industry is to provide a good quality product, good quality service. In the end, we want to contribute as much as we can. At least we are targeting to achieve 40 per cent of what the government is targeting.

23. What will be the cost, technology trends in solar inverters?

Currently, we are on 1500V, and in future, we may see that the DC voltage may increase to 2100V or 3000V. On the AC side, maybe, in coming years, we can see that transformer is getting replaced, and inverter can directly feed power to 11KVA or 33KVA.

That is the expectation in the coming years because our R&D is working hard on that. So, these are the few technology change we may expect in the inverter segment. Thin-film capacitors and other things are coming in the inverter, so size is going to reduce. In the future, if there is not much impact on raw materials costs, we can expect some price drop.

24. How much is your R&D budget as in percentage of your sales or profits?

Sungrow invests 40% of its profit back to R&D. We understand that till the time we don’t invest in R&D, no company can survive for a longer time. Sungrow has been surviving for the last 23 years and the reason is the investment which we have for R&D.

25. What are the expectations from Tech Suppliers like Modules, Inverters, BOS, Trackers etc? What is the tech solution you are thinking of deploying?

Everything has to go together for any technology up-gradation. All these complement each other. Technology up-gradation is happening in all the fields, and this market is going to innovate constantly. Otherwise, it is going to be tough for everyone. Aggressive bidding and other things will not be possible that easily.