Span Pumps has now ventured into the rooftop solar power generation segment considering that there seems to be ample potential in the future.

Span Pumps Private Limited, a manufacturer of manually and solar-operated water pumps, has now forayed into the rooftop solar power generation segment. This new venture shall function under a separate identity called ‘Kalpa Power’. This was recently announced by Rounak Muthiyan, Director, Span Pumps. Excerpts from the interview:

Could you give an update about the parent company, Span Pumps?

Span Pumps, engaged in the business of making manual and solar-operated water pumps, was established in 1987. It has supplied over 5,00,000 hand pumps across Asia, Africa, Latin America and the Caribbean. Our esteemed list of customers include various state and central government organisations from all these countries as well as various development agencies, including UNICEF, Red Cross and World Vision. Span Pumps has installed over 6,000 solar pumps in the last five years, gaining significant experience in dealing with solar photovoltaic system operation.

What triggered the idea of venturing into rooftop solar power generation?

Span Pumps has supplied more than 6,000 solar pumps which is equivalent to about 5 MW of solar energy. We found that there is huge potential in doing rooftop solar plant business for commercial and industrial customers in Maharashtra especially as the power cost is very high and also supply is erratic. Moreover, since we have the complete ecosystem for running this new activity due to our solar pump business, we decided to get into it.

What is the investment in this new venture and your expectation of returns?

The parent company has invested about USD 1 million or Rs 6.50 crore in the business so far. It is committed to support the solar rooftop business.

What new technologies will the company introduce in this new segment?

We will provide complete design optimisation and EPC support for ground-mounted and rooftop solar power generation. We have developed proprietary solutions for automated cleaning of solar power plants to reduce the impact of soiling on the panels, one of the biggest concern areas for solar in India, as well as remote monitoring systems from our control centre to manage and monitor all on-field assets to minimise breakdown times and maximise performance.

Isn’t this sector too competitive right now? What prospects does Kalpa Power envision over the next five years?

In the present scenario, the sector is competitive. The levelled cost of solar is dropping down in such a way that PPAs are signed at a cost of Rs 4-5 per unit in India and Rs 2-3per unit abroad. On the flip side, with the drop in the costs and government’s push to the overall solar mission, consumers are opting to invest in solar and save money. In such a scenario, Kalpa Power plans to achieve 8 MW in FY 2016-17 and 10 MW annually thereafter.

Are there any government policies that will help growth in this business?

The government has come up with policies to encourage consumers to invest in this business. Policies like excise duty exemption, central financial assistance schemes, 10-year tax holiday, net metering for consumers will assist us in growing the business. With rising electricity costs and government policies supporting solar rooftop projects, it will be easier to convince consumers to shift to solar and save money.

Does the company plan to expand its operations to other countries?

Yes, eventually we plan to expand our operations abroad and increase our customer base.

What are the market trends in the sector of rooftop solar power generation?

The government has set a solar target of 100 GW. Industry experts believe that most of this target will be achieved by policy-based utility scale projects. The Indian solar market appears in full bloom right now with key policy changes being introduced and 25 GW of projects under different stages of development. As many as 35 new tenders with a cumulative capacity of 15.5 GW have been announced over the last one year. An additional 5 GW of new tenders are awaiting release in the coming months.

The government has set a solar rooftop target of 40 GW until 2022. Various government programmes have been introduced and they have also decided to award achievement-linked incentives to channel partners, government agencies and consumers for installing rooftop solar. For rooftop solar generation, effective net metering schemes, CFA assistance, excise duty exemptions have been developed to encourage rooftop installations. The solar tariffs have reduced to Rs 3-4 per unit. Overall, the growth prospects for the India solar market are very bright, thus providing an immense opportunity for investors, developers and equipment suppliers.

Are there any challenges that you will need to overcome?

As per the Union Budget 2016, the accelerated depreciation benefit will be limited to 40% from April 2017. The sunset clause under 80 IA (10-year tax holiday) till March 2017 has also been retained. The cost of solar is also dropping lower every day. The change in solar rooftop incentives and continuous drop in cost of solar will be major challenges in the following years.

What are our in-house assets that will provide an edge over competitors?

Kalpa Power has an in-house DSIR (Department of Scientific and Industrial Research)-recognised R&D facility. We use specialised tailor-made software for the rooftop segment so that peculiar concerns of the industry can be taken into account. An advanced GIS-based modelling system for solar generation forecast, impact of shadows of rooftops and wind load analysis for structures is used by Kalpa Power. In addition, the projects are EHS (environmental health and safety)-compliant for all the installations, which takes care of mechanical, structural and electrical aspects of the solar power system, while maintaining utmost safety. Our strength is our expertise in design optimisation, quality, and fast and efficient implementation of the system with the usage of our unique lightweight structures.

What are the positives that you are banking on?

In addition to providing the best of ground-mounted and rooftop solar power generation plants, we have a tie-up with a large pool of investors, who have an appetite for about 150 MW of solar power generation plants, which roughly translates to a value of about Rs 900 crore. These investors invest in the solar power plants for medium and large commercial and industrial units, sell the power to those units at a cheaper rate as compared to the MSEDCL, and get tax benefits on the earnings. Kalpa Power currently has a confirmed order book of over 1 MW capacity and is targeting a total of 8 MW in the financial year 2016-17.

– HUNED CONTRACTOR