In an interaction with Industry Outlook, Krishna Kulkarni, Director at NeoGreen Power, share his insights on how renewable energy industry is undergoing a significant transition and sector-specific barriers facing by the companies in the landscape. Spanning over 15+ years of experience, Krishna holds comprehensive understanding of the industry's dynamics and emerging trends.Throughout his career, he has demonstrated a strong ability to collaborate effectively with both commercial and industrial clients
With industrial and commercial players racing to decarbonize, how are Indian businesses leveraging solar adoption to cut energy costs and gain ESG credibility?
The renewable energy industry is undergoing a significant transition. We are witnessing a major shift as corporations increasingly embark on their decarbonization journeys. This movement initially began in a few key states, which include Karnataka, Maharashtra, Tamil Nadu, Gujarat, and Rajasthan. Currently, it has expanded substantially in both scale and engagement. Previously, it was primarily large corporate and energy-intensive industries leading the charge. However, the landscape is changing. Now, we see growing participation from smaller consumers, mid-sized corporations, MSMEs, and allied industries.
Industries are increasingly leveraging solar energy, and not only to contribute to the green energy movement but also as a strategic means of cost optimization. By reducing their dependency on the grid, they are able to lower energy costs and gain long-term visibility and stability. This can be achieved through self-funded renewable energy projects, captive models, or group captive arrangements where they enter long-term Power Purchase Agreements (PPAs) with institutional investors or power producers.
Beyond cost savings, adopting renewable energy enhances a company’s green branding and sustainability credentials. It demonstrates a commitment to environmental responsibility, which increasingly resonates with consumers. Many consumers now prefer products from companies that actively support green practices.
Moreover, renewable energy adoption contributes to meeting Environmental, social, and Governance (ESG) and Corporate Social Responsibility (CSR) goals. In some industries, which include automotive or pharmaceuticals, there may also be requirements for sustainability certifications, especially for companies operating within the mid-tier of the supply chain. For example, a supplier providing components to a multinational like multinational automobile or a food/beverages company, needs a specific certifications to meet customer expectations. In summary, industries today are leveraging renewable energy, particularly solar power for cost optimization, ESG and CSR compliance, improved brand perception, and where necessary, obtaining green certifications to align with supply chain requirements and consumer expectations.
What sector-specific barriers are companies facing when integrating on-site solar infrastructure, particularly in high-energy-consuming industries like textiles, cement, and manufacturing?
The primary challenge for sector-specific, high energy-consuming industries is space constraint. This remains one of the most significant barriers for many industries. By space constraint, the lack of adequate space required to meet their energy demands during the peak solar generation window, typically the nine hours of daylight.
For example, a large cement plant might require around 5 megawatts of power during the day, especially between 11:00 AM and 5:00 PM, when solar irradiance is at its peak. However, they may not have enough rooftop space available to install a solar plant of that capacity. This lack of sufficient space is a major limiting factor.
Additionally, these industries come with their operational challenges. Cement and textile industries, in particular, often have high heating loads. This includes heating of the roof surfaces and the presence of exhaust systems that emit fumes and chemicals. These conditions lead to increased dust and heat loads, which can negatively affect solar panel performance and maintenance.
How are corporate Power Purchase Agreements (PPAs) for solar energy evolving in India, and what’s driving their increased traction among large enterprises?
Corporate PPAs have been happening for almost a decade and it is not a new thing. Large industries have already tested corporate PPAs almost a decade back. Large corporates have themselves evolved, rather than the PPAs evolving, because the large corporates have gone through this journey. In the meantime, they also started engaging knowledgeable consultants from large industry backgrounds, either individual consultants, firms, or the Big Four. They bring in their expertise, which eventually helps large corporate streamline their PPAs as well.
The evolution is largely from the consumer side. But from the generator side, things have also evolved. In terms of power production, the PPAs are mostly driven by state-specific regulations on wheeling, banking, or open access.
So, around 70 percent of the PPAs generally tend to remain the same; it’s just the regulatory points that keep changing, and the PPAs evolve based on that. Generally, long-term PPAs are about 20 to 25 years, and cost savings are usually around 20 to 30 percent or a maximum of 40 percent discount on tariff for these long-term PPAs. There’s a sense of flexibility that has evolved as well.
How do land availability, rooftop access, and grid connectivity challenges impact the scalability of solar energy deployment in urban industrial clusters?
In urban areas, solar energy deployment is primarily limited to rooftop installations. There is little bandwidth or commercial incentive for investors to conduct ground audits in urban environments. Therefore, when we talk about solar in urban settings, we are essentially referring to rooftop solar.
However, urban density presents significant challenges. Many industrial clusters in cities face constraints related to limited rooftop space due to structural limitations or because the properties are leased. Ground-mounted systems are generally not feasible in urban areas due to severe land acquisition bottlenecks, making rooftop installations the only viable option.
What role does state-level incentives, policy clarity, and net-metering regulations play in shaping business decisions around commercial-scale solar installations?
The policy consistency and net metering benefits are very important. Net metering is a net of energy that is generated from any roof-bound solar project, compared with whatever is consumed. The net excess, whatever is left over, has to be given back to the grid. That is called a net metering arrangement.
This arrangement is very critical. Net metering, along with open access, along with the purchase of electricity from outside the roof, for instance, land-based or any wind or solar project located somewhere outside that particular place, and along with net metering, is very important. So, net metering and open access must go hand in hand for the larger promotion of the energy landscape.
As green economy pressures intensify, how will breakthroughs in solar storage, efficiency, and integration define competitive advantage for Indian companies over the next decade?
There will be intensification in terms of cost reduction, technology innovation, and emerging storage, in terms of integration of wind, solar with hybrid. So, Indian companies will only evolve, and the PPAs will be more democratized, or commoditized.
In terms of investments by these corporates and industries, the intensification is only leading to a lot of competition in terms of contractors giving quite a competitive pricing to these industrial establishments for setting up captive plants. That will probably stabilize for some time now, because a lot of the contractors, and developers like us, are emerging in the market. It only leads to healthy competition hopefully. But the falling or dropping price of modules over the last two, two and a half, three years, has only given hope and a chance to industrial establishments to set up their captive plants.
In terms of technology, storage would be the game changer. Battery storage will enable time-shifting of solar power from day to evening hours, making it an around-the-clock supply to industrial loads. Higher efficiency panels have also come into the market.
We have already transitioned through nearly three technological advancements over the past two and a half to three years, and starting from polycrystalline to monocrystalline modules, and more recently, from p-type to n-type monocrystalline solar modules. In total, we’ve seen close to three major technology shifts in just three to four years. Further innovation is expected. While the physical size of solar modules remains largely unchanged, their generation capacity and efficiency continue to increase.
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