MC Interview | First Solar looks at producing 3.4 GW of solar modules annually, a year from now: MD Sujoy Ghosh

He added that the firm does not have any plan to acquire renewable energy projects in India and that it is not seeking any additional funding. The company, however, continues to assess opportunities for additional investments and further expansion in India. In India, the firm will continue to cater to power utilities instead of B2C companies.

Will take at least a year to get to 3.4 GW production

The plant, built on 130 acres of land, will take at least a year to start producing 3.4 GW of solar modules annually. When it is commissioned in October, the company is looking at about 6,000 modules a day.

“When we start off, we would be looking at about 50-60 percent of our nameplate. The plant is designed to produce about 17,000 modules a day, and once we get to that milestone, it will be about 3.4 GW per annum. But when we start off in October, we will be at about 6,000 modules per day,” Ghosh said.

The plant has a lot of process equipment which takes time to stabilise. In the beginning, the equipment does not produce optimally, which adds to the variability. It takes a year to get a sustained output.

Will export up to 2GW of modules

The plant is being built at an investment of $700 million, of which $500 million of credit line has been extended by the US Development Finance Corporation (USDFC).

“The modules from our plant are primarily meant to support the Indian market. But we imported most of our plant and machinery to build the factory and none of that is available in India. When we imported, we paid about 10 percent duty and 18 percent IGST (Integrated Goods and Services Tax). It is a total of about 28 percent duty, which one has to bear for capex. To offset that, we took the Export Promotion Capital Goods (EPCG) licence, which is why we have certain minimum export obligations to fulfil. So, we will have to export anywhere between 1.5 and 2 GW,” Ghosh said.

Will take at least three years to localise supply-chain

The PLI scheme is going to pave the way for about 30-35 GW of high efficiency solar module manufacturing in the country. The same scheme will also lead to polysilicon manufacturing of about 21 GW. Currently, it is zero in India. It only means that for several years from now, the country will have to keep importing polysilicon.

But the gap in the supplier ecosystem is beyond that of wafers and polysilicon. There are not enough manufacturing units even for glass in India, which is also used to make solar modules.

“There is not enough glass capacity in the country. Glass is a very capital- intensive business. It requires big float furnaces to make float glass, and the gestation period for a float line typically is about three years because it takes a year for the permits, two and a half years to build, and these are very capital -intensive, energy-intensive processes,” Ghosh said.

Localisation of the component ecosystem is one of the main parameters, other than technical and efficiency parameters, based on which the government will grant the PLI amount to the allottees in about three years from now.

“The starting point is to import from the existing supply chain. We have two other factories in the same geography – Malaysia and Vietnam – from where we are sourcing our machinery and raw materials from suppliers who are supporting our units there. Hopefully, by the end of 2025, we will significantly localise our component supply chain,” he said.

CdTe panels have higher installation cost, better efficiency

First Solar is the only company in the world which manufactures solar panels using cadmium telluride, instead of crystalline silicon, which has a share of 90-92 percent in the global technology distribution of solar photovoltaics. The firm claimed it accounts for the balance 8 percent, as another company, Solar Frontier, which makes thin-film modules using a different material - Copper Indium Selenide (CIS) – only has a 2 GW unit in Japan.

“Our modules weigh about 40 kg, whereas the silicon-based modules weigh about 22 kg. Hence, our installation is typically 5-7 percent more expensive because you need more steel to install the module. Once installed, the semiconductor which we use responds better under hot and humid climate conditions. Typically, we produce 5-8 percent more energy for the same installed capacity, which offsets the slight incremental cost that comes from initial installation,” Ghosh said.

Slashing corporate tax biggest boost to manufacturing

Ghosh said slashing corporate tax for new manufacturing from 25 percent to 15 percent has been the single biggest policy instrument which made manufacturing of solar modules in India very attractive.

“The 15 percent tax rate cut, which the government did for manufacturing, put India at par with some of the other Southeast Asian economies, which are offering zero tax. But then you also had minimum alternate tax in the US. The 15 percent tax rate, compared with a huge domestic demand, is not there in some of the other economies. That balances things out and makes the case in favour of India,” he said.

The second big policy instrument, he added, was ring-fencing imports, especially to counter dumping by China.

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