A leading Chinese manufacturer company of solar modules and photovoltaic cells, Trina Solar is interested to invest in Indian solar power projects. They are focusing to invest in under-construction solar power projects and looking for the opportunity to take hold of the domestic renewable energy sector.
Recently, they have tied up with a local renewable energy start-up -Engenrin Energy Private Ltd for its development and engineering-procurement-construction (EPC) businesses. This start-up belongs to Raj Kumar Roy.
Helena Li, President-Asia Pacific, Trina Solar said, she won’t be surprised to see Chinese firms setting their base in India. Trina Solar is looking forward to expanding its large scale manufacturing base including in India.
“Trina Solar is keen to expand its project development businesses in India by either partnering with large developers to offer EPC-plus-financing or by buying out projects struggling for finance. Trina’s strategy, across Asia and Australia, is to develop a project of global standards and then sell these de-risked cash flow-generating projects to pure financial investors.” Roy said.
Trina is one of the top five suppliers to Indian power developers and among the largest solar panel manufacturers in the world. Although the company will not participate to bid for new projects in the reverse auction process, it will rather help the under-construction projects to get completed. The Chinese firm will provide long-term financial help to the developer at a competitive USD rate of interest. If the developer cannot pay back the investment amount either through some financing option or by selling the project; Trina has the right to take over the asset.
“Trina feels that they need to increase their market share and the development strategy will help increase their share in the Indian market given that these projects will be set up with Trina modules,” Roy said.
Till now, Trina is working on 4-5 projects and is targeting to do 100-150 MW projects in 1 year and then increase the target based on experience with these projects. Currently Chinese firm is at an advanced stage of evaluating asset of 50-150 MW size in Gujarat and Odisha.
Trina Solar also installed a 675kWp system for industrial company Rolex Rings in Gujarat’s Rajkot city. It is a factory that is into the manufacturing of automotive parts and got the system installed on the factory roof to reduce its dependencies on the electricity grid. According to Li, this installation is producing 1.03 million KWH of clean energy every year and the factory is saving around $110,000 bill of electricity bill per year.
Drop down in the renewable sector
From the past 1 and a half years of project execution in the renewable sector has seen a low point. In Q3 2019, capacity addition went down to two-third of deciding capacity at only 2,549 MW (solar 2,114 MW, wind 435MW) quite below from its previous record of Q1 2019 which was 5,111 MW, estimated by research from renewable energy consultancy Bridge.
Reasons for Drop down
Problems in land acquisition, transmission connectivity, and lack of appropriate debt financing options and renouncing of long-term power purchase agreements are some for the reasons that didn’t let the renewable sector grow.
Roy believes that the future of renewable markets in India will scale up soon to a multi GW scale if the same situation persists. “India, with its sheer size of the renewable market and challenging liquidity situation, presents attractive investment opportunities across the entire spectrum ranging from greenfield development to fully operational but financially stressed assets for investors who are diligent, patient and disciplined,” Roy said.