NTPC to build solar plant in India

India’s government owned companies have never been good investments. The main reason is that profit maximization has never been their main objective, but they have mainly been used by the government and its ministers for their own personal reasons. They are highly corrupt organizations with many minsters and bureaucrats milking the organizations. A telecom minister is in the news these days for using 300 high speed lines from state owned telecom company at his residence for providing communication services to his brother’s company for free. There are numerous other cases.

Besides corruption, harebrained schemes are another huge problem for these companies. They do not have focus and go on a tangent making investments without rhyme or reason. NTPC which is one of the better run government companies is thinking of building a 1 GW poly to modules plant in India. Note NTPC is a power generating utility, without much experience in manufacturing of anything let alone solar panels or polysilicon. While the company is making big time investments in solar generation thanks to the government mandate of 100 GW by 2022 from 4 GW now, NTPC has no reason to start building a manufacturing plant for solar equipment. This is same as NTPC building boilers and turbines for its thermal power plants. The company has no competence and experience. It will be better off buying the equipment from firms specialized in this industry. I don’t think they have read Taylor’s rules on specialization.

The ostensible reason given for building the solar factory is that there is going to be huge demand in India and the government wants to bring down the total costs of a solar system from Rs 6/watt to Rs 4.5/watt . I don’t think in a million years will NTPC be able to compete on costs and efficiency compared to the likes of a SunPower or Trina Solar. Also there is going to be a massive demand in road building so should NTPC also start to quarry stones?