Vikram Solar plans to enter battery energy storage systems: CMD Gyanesh Chaudhary

Vikram Solar has another 3 GW solar cell and module manufacturing plant coming up in Gangaikondan, Tamil Nadu. 

Vikram Solar Ltd plans to enter the battery energy storage systems (BESS) segment as a strategy to diversify its portfolio, said Gyanesh Chaudhary, chairman and managing director of the solar module manufacturer, which has filed draft papers for an initial public offering (IPO). In an interview, Chaudhary said Vikram Solar's plan to set up a 3 gigawatt (GW) solar cell and module factory in Colorado now depends on what action US president-elect Donald Trump’s may take on the Inflation Reduction Act (IRA) rolled out by President Joe Biden to boost renewable energy production.

Edited excerpts:

What are your expectations from the budget?

The biggest expectation for us is for the SEZ (special economic zone) Amendment Bill to come through. The proposed bill aims to overhaul the existing SEZ framework and replace the previously proposed Development of Enterprises and Service Hubs (DESH) Bill that was announced by the finance minister in 2022.

The industry needs the SEZ law and it's a multi-sectoral issue, not just a solar or renewable sector issue. The SEZ Amendment Bill is expected to bring a lot of economic mobilisation in the manufacturing space, especially for the plants that are not being fully or adequately utilised because of being in an SEZ.

The second is that the government should focus on market creation while implementing all the schemes in the renewable and new energy sectors. We've seen how brilliantly the PM Surya Ghar scheme has come through, but we've not seen much of RPO (renewable purchase obligation) compliance among the discoms (power distribution companies), which escalates the issue of unsold renewable power. RPO compliance is anyway required to create a green economy. Unless the consumers are forced or asked to comply, where will the off-taking go? It's not going to happen on its own.

The third is that the financing of solar manufacturing needs to improve. We need scale. We don't need 200 companies with just 500 megawatt (MW) capacity. We need, say, 5-10 companies with 30 gigawatt (GW) capacity each; and for that, it requires a proper ecosystem including logistics.

In September, Vikram Solar filed a draft red herring prospectus with the Securities and Exchange Board of India (SEBI) to raise funds through an IPO comprising fresh issues of shares of up to Rs 1,500 crore and an offer for sale of up to 17.45 million equity shares. When do we expect the listing to happen?

I cannot talk about that. All I can say is that we will be a listed company very soon.

Does the company have any diversification plan beyond solar cells and modules?

We are quite excited about the BESS (battery energy storage systems) space. We have decided to invest in BESS. The plan includes starting with a 1 GW BESS facility soon, after which we shall scale to a capacity of 10 GW or more.

Your solar cell and module manufacturing unit in the US is scheduled to be operational from this calendar year. Give us an update on that.

We can push the button if we want, but we haven’t on that front. It's a wait-and-watch situation till the new government takes over in the US.

Does it mean that the plan could be scrapped altogether if the conditions aren’t favourable?

Yes, it’s a business decision after all. Everything now depends on what the new US government does to the Inflation Reduction Act of 2022.

Give an overview of Vikram Solar’s current cell and module manufacturing capacity and a status of any upcoming plant.

We are one of India’s largest module manufacturers in terms of operational capacity, with 3.5 GW of installed manufacturing capacity for solar PV (photovoltaic) modules, producing N-TOPCon, mono PERC, bifacial and monofacial and polycrystalline PV modules across our factories located at Falta SEZ in Kolkata and at Oragadam in Chennai. Both these factories are strategically located with access to ports, rail and roads, helping facilitate both our domestic as well as international operations.

We have another 3 GW solar cell and module manufacturing plant coming up in Gangaikondan, Tamil Nadu. The module facility will be commissioned this year and the cell manufacturing unit will be operational next year.