The central government's rooftop solar subsidy scheme for homes could present a business opportunity of more than $1 billion for Tata Power, company managing director Praveer Sinha said. Sinha said this opportunity will emerge in the coming three years, as the company looks to capture one-fifth of the domestic market for solar modules.
“One place where we will get a lot of momentum is the new program of Pradhan Mantri Surya Ghar, where the target is about 1 crore houses,” Sinha said in an interview. “This is a huge benefit that will come to us.”
PM Surya home free electricity schemeEstablished this February, it seeks to provide subsidies for rooftop solar installation to 10 million households. Sinha believes the scheme could generate demand for 25-30 GW of solar modules during its duration. He said, Tata Power wants to meet 5-6 GW of this demand.
According to Sinha, at an estimated price of 20 cents per watt, this could translate into a business opportunity of $1-1.2 billion ( 8,350-10,000 crore).
Sinha, who says Tata Power has 13% share in the domestic solar module market, is looking to increase its share to 20% on the back of its new solar cell and module manufacturing unit in Tamil Nadu. Established on investment of At a cost of Rs 3,000 crore, the Tirunelveli-based facility can manufacture 4 GW of solar cells and modules every year.
Impact of new manufacturing plant
“The manufacturing plant will be fully operational this year. Sinha said, the module (manufacturing unit) will be fully operational (throughout the year), while the cell will be operational for about 9 months.
The new manufacturing unit will also benefit the company in the rooftop solar scheme, as the scheme mandates the use of domestically manufactured solar cells and modules.
“Since we have set up the plant, we will be at a huge advantage as we will be able to use our domestic cells and modules for this scheme,” he said, adding, “With 2 GW, just one Other domestic manufacturers. Domestic cell manufacturing capacity and another 2 GW capacity is coming up.”
ReNew Power has a 2 GW solar cell manufacturing unit in Gujarat and the Adani Enterprises unit is setting up another 2 GW plant in the state.
After the commissioning of Tata Power's new plant, the company's total installed solar module capacity will be 4.9 GW, including the 600 MW annual capacity of the Bengaluru plant. The company also executes EPC (engineering, procurement and construction) projects for solar energy through its subsidiary Tata Power Solar.
Tata Power will rely on its network of over 500 channel partners across 450 cities for the sale of its rooftop solar units, Sinha said. He said that the company is considering doubling its network to 1,000 channel partners this year.
Shares of Tata Power have almost doubled compared to last year. 414.75 on BSE on Friday. The stock has fallen about 10% over the past five trading sessions after the company missed Street estimates for Q4 profit. Power major reports 15% year-on-year rise in profit 895 crores.
A solar cell is a photovoltaic unit consisting of semiconductor material that converts sunlight into electrical energy. These cells are connected in chains to form larger units known as modules.
PM Surya Yojana details
Under the PM Surya Ghar Free Electricity Scheme, the Center wants to provide households a subsidy of 60% of the solar unit cost for systems up to 2 kW capacity and 40% of the additional system cost for systems of 2-3 kW capacity.
At current benchmark prices, this would mean Subsidy of Rs 30,000 for 1 KW system, 60,000 more for 2 KW system 78,000 for systems of 3 kW or more, according to an earlier government statement.
The scheme was approved by the Union Cabinet on 29 February and its budget is 75,021 crore.
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Published: May 12, 2024, 07:26 PM IST