Another small Solar Cell And Module Factory in India
Indian solar manufacturing has been in a woeful state thanks to the fragmented nature of its capacity with almost a hundred companies owning a combined 5000 MW of capacity. Compare this with global giants like Trina Solar and Jinko Solar which alone have a capacity of 5000 MW. This small scale capacity makes most of the Indian companies unable to compete as they are not economically viable. They do not have the scale in marketing or manufacturing which would allow them to amortize costs over a larger revenue base. The solar cell and panel production industry is a heavily competitive one with even the largest solar companies making wafer thin margins. You need to be absolutely cost efficienct in all your operations in order to compete.
A Solar Factory In India
To add to the existing non-competitive capacity, state owned company BHEL has also opened another useless small factory with 200 MW module and 105 MW cell capacity. These capacities are simply not economically viable and make little sense. The company had as far back as 2014 announced plans to open an integrated 500 MW line, but instead it has opened a tiny little factory in Bangalore. The state run companies in India have little strategic or operational sense. They are run by managers who have little accountability towards shareholders and stay in office at the whims of their political masters. Except for monopolies, most of the Indian government companies are loss making. They are huge destroyers of value and waste massive amounts of money which could be better used to alleviate poverty.
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BHEL is primarily a maker of equipment for coal run thermal power plants and has been facing a tough time due to thermal power overcapacity in the country. This state run behemoth faces a bleak future with solar energy expected to overtake coal energy soon. Opening a tiny factory is not going to help BHEL be a material player in this space. There are already tens of factories of similar capacity and technology running in the country. Why add another one to the glut. If it wanted to create something of value it should have built a reasonably economically viable factory. Adani has built a 1000 MW plus cell and module factory and even that is in trouble due to lower end product prices.
Also read India Does Not Need Any New Coal Power Over Next 5 Years
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GWI Makes a vital role to contribute the role of responsibility towards the global warming of the world but I request to give more opportunity for the nanotechnology student in India to contribute the salute towards your role & responsibility for GWI.
I like the directness of this article. If I can quantify, I have to say that you are 100% correct.
Having minimal knowledge with the business trends you cannot comment as your wish and all giants it self went into losses in solar and future trend no body knows what can happen in the immediate next year itself due to market volatility some industries are strategically moving forward.
Sure Sir! Thank you for the encouragement! Please write to me on greenworldinvestor@gmail.com
As is pointed out any new business can quickly go out of profits if proper strategy is not there. BHEL has made a start in right direction and it is testing the waters.
The profitability is also depends on demand which is not there. Hence making big moves blindly with public money is not correct.
Few steps are directed by govt. which can’t be quantified with profit and loss. Such as BHEL is forced to take loss making projects in N.Eastern states where no Pvt. firm bids for.
Why would a heavy industries minister come and inaugurate the factory with such pomp and media extravaganza if it is useless? Either the minister has no sense or the author of this article! In any case, truth never goes down the throat easily. Let us leave it to the ‘desh ke 120 crore public’ to ponder.
Dear Sneha,
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Wish you a happy & smart life
Dr. G.C.Swain, Publisher & Editor of “Emerging Science”, periodical with ISSN :0976-4100
Dear Jeetendra,
Thank you for your comment! As I say everyone has his opinion so let’s wait and watch
As far as my opinion goes, in the country where large sized plants built by Adanis too is not very competitive, you think this small sized plant will be profitable?