New Delhi : India’s solar power market may be growing rapidly – but Girish Mansukbhai Solanki’s business, a small labour agency that supplies workers to companies setting up solar systems in western Gujarat, has been making losses.
“I am at the bottom of a supply chain that is plagued with delayed projects, delayed payments and a lot of uncertainty,” the 38-year-old told the Thomson Reuters Foundation over tea in Rajkot, an industrial town home to many solar firms.
Solanki has stopped taking calls from manufacturers and solar service providers seeking manpower because their slim profit margins put them at risk of financial trouble, he said.
Small-scale solar manufacturers and service providers like Solanki are regarded as important players in India’s push to achieve a national goal of installing 270 gigawatts (GW) of solar power capacity by 2030 – enough to power about 200 million homes.
In an industry driven by government policy, these firms are also key to generating green jobs, with even the smallest hiring at least 25 workers, according to manufacturers’ associations.
India’s micro, small and medium-sized enterprises (MSMEs) – which number about 60 million across all sectors – generate the largest amount of employment after agriculture, and foster entrepreneurship at a lower capital cost than large-scale manufacturing.
Yet, despite their role in fostering skills and inclusive growth, many in the solar value chain are floundering as larger companies enter the market, states impose strict tender rules and the government tightens quality controls, imposes mandatory certification for components and ramps up costly on-site checks.
These conditions have made it hard for MSMEs to bid effectively for government-backed solar projects from setting up solar-run agricultural pumps to rooftop systems and micro-grids.
Once considered pioneers in the business and credited with creating early awareness among consumers, MSMEs are now operating as sub-contractors and sales agents for big companies that are cornering most solar projects across the country.
Many like Solanki are either diversifying, shutting down or downsizing – with knock-on effects for employment.
“The plot has been lost for MSMEs, with many struggling to retain a foothold in the solar market,” said Gulabsing Girase, director of Gro Solar Energy Private Ltd, a firm he co-founded after leaving the Maharashtra State Power Generation Company.
Large players are entering even the rooftop solar market which was dominated by MSMEs until a few years ago, he noted.
“Businesses set up by borrowing from family and friends are getting marginalised – and the benefits of the booming solar market are slowly getting consolidated into the hands of a few big companies,” he added.
Source : reuters
