Firms need to strive for both scale & technology for survival in solar business

Tags: Knowledge
Applied Materials, a global firm that provides manufacturing solutions for solar photovoltaic and other industries, has been operating in India for the past ten years. The $8.72 billion US firm vows to provide equipment that will promise manufacturing of solar modules at lower cost in the country. Aninda Moitra, president and managing director of Applied Materials India spoke to G Balachandar on opportunities and challenges in the market. Excerpts:

How big is your presence/activity in India currently?

Our technologies help make innovations like smartphones, flat screen TVs and solar panels more affordable and accessible to consumers and businesses around the world. We are one of the key innovative equipment, services and software providers for the semiconductor and solar industries. We have offices in Bangalore, Chennai and Noida with the majority of the resources in Bangalore. We are focused on provided a variety of engineering, customer and product development support for all of our products in the semiconductor, solar, and display equipment and service offerings. Today Applied Materials India is the second largest engineering resource centre for the company.

Have you outsourced any function to India and if yes, how do you see that growing in the coming years?

We have adopted a global model wherein our teams are spread across various geographic locations and work symbiotically on various state-of-the-art technologies. We continue to find opportunities to maximise the regional competencies. In India, we continue to grow our competencies in various engineering domains and build critical mass as the domain development reaches world-class capabilities. We also continue to leverage and grow our R&D effort with key university engagements. Our most prominent engagement has been with IIT Bombay thus far, were we have established India’s first 200 mm semiconductor research facility and one of the select few university based 200 mm facilities across the globe. Launch of Clean lab in 2011 focusing on Nanoelectronics and solar PV research has broadened the scope of ongoing research collaboration for the development of new materials. These materials may be used for a variety of electronic and renewable energy-focused applications, including the fabrication of next-generation solar cells. With the current focus on renewal energy and electronics manufacturing in India we are very optimistic of the continued growth of most of our functions in India.

What are your views on National Solar Mission and the future opportunities?

Collaboration and exchange of knowledge between government, industry and academia is critical to achieve the aggressive targets of the Jawaharlal Nehru National Solar Mission. The biggest challenge in the post National Solar Mission scenario is to bring down costs of solar power and this can be achieved by lower manufacturing costs, increasing scale, reducing balance-of-systems costs, etc. To bring down the cost of solar, it is important to have a robust local solar manufacturing ecosystem. Our intent is to help solar manufacturers drive down cost per watt in order to rapidly grow the solar industry and make solar electric power increasingly affordable for everyone, everywhere. Many companies have acquired land and raised finance for their projects under the Solar Mission. Interestingly companies are now venturing into not just the solar cell and utilities manufacturing, but also backward integration into other things such as wafering and polysilicon. We view this as a positive step, since this industry is so cost sensitive, it is essential to work on technology differentiation as well as scale.

How to overcome the challenge in deploying newer and efficient technologies for cost reduction?

This is a very key point. The entire clean energy sector has seen a very strong focus from many countries across the world as clean/renewable energy is one of the megatrends that we are seeing globally (mobility is the other one). With this kind of favourable future industry, it is crucial to drive cost down by pulling all available levers. The key levers are scale and technology. For companies to survive in this area, they need to strive for both. Additionally, companies need to make R&D an essential part of their core capability. Without R&D focus staying on the technology treadmill is not possible. Also, just by having scale, you cannot drive down the cost.

What kind of push is required to develop a strong indigenous solar cells and module manufacturing base in India?

If India wishes to see solar as a key renewable option in its future, it will need to look at an indigenisation programme in the areas of manufacturing– else it will be constrained by available foreign exchange reserves. The Indian government should deliver a clear message of consistent commitment to the manufacturing along with end-user demand development. This means that the original intent of the Solar Mission policy where indigenous manufacturing was an objective should not be compromised or all solar programmes should be technology neutral to enable the market forces to select the winners. Today this is not the case, and this loophole continues to be leveraged resulting in a trend different from other countries. There also need to be preventative measures to ensure that the Indian market does not become a dumping ground for cheap, poor quality imports. This can be done by ensuring strict norms and standards are defined and enforced for regulating imports. Also focus needs to be given on increased level of R&D with university and industry. Finally high cost of finance is the biggest disabler for the solar sector – this disability should be appropriately neutralised to enable the sector.

balachandarg@mydigitalfc.com

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