In conversation with Anmol Singh Jaggi, Managing Director, Gensol Engineering Ltd

For India to become a USD 5 trillion economy by 2025, a climate-motivated push for a new energy transition in the domestic market is the only key, affirms Anmol Singh Jaggi, Managing Director, Gensol Engineering Ltd

What is the growth outlook for Gensol Engineering?  

Prime Minister Narendra Modi’s climate-motivated push at the recent COP26 summit in Geneva is holding a gold mine for a company like Gensol. We are also adhering to PM’s announcement of increasing the non-fossil power capacity to 500 GW and meeting 50 per cent of energy requirement from renewable sources by 2030. As of today, India has crossed 50 GW of solar installations, which forms roughly 31 per cent of the total renewable energy mix, which, other things remaining equal, would mean at least 150 GW of solar installations by 2030.

On an estimate, this would roughly entail an investment of USD 70 billion over the next 8 years. Even if Gensol manages to claw only 1 per cent of this market during this period, it translates into annual revenue of over Rs 600 crore. From an investor’s perspective, it is important to sift the grain from the chaff and the fact that Gensol has stood the vicissitudes of this industry when many players shut shop, we strongly bet on a strong multi-year show revenue growth over the next decade while chasing the brighter days ahead.   

What is your outlook on the renewable energy sector in India?  

For India to become a USD 5 trillion economy by 2025, a climate-motivated push for a new energy transition in the domestic market is the only key to strengthening energy security, facilitate economic growth, limit carbon emissions, and manage its fiscal deficit. Piquantly, PM Narendra Modi's pledge at the COP26 Climate Conference held in Glasgow in November 2021 that India will achieve net-zero carbon emissions by 2070 is a remarkable commitment in itself. This will act as a pivotal force for transforming India’s energy landscape and spells a plethora of opportunities for the renewable energy sector. 

This serious deployment of renewable energy capacity in India till 2030 calls for an investment worth approximately USD 300 billion, on an estimate. All this augurs well for Gensol as a complete solar engineering solutions provider. That said, there could be delays in policy implementation, while funding problems are not to be ruled out. In addition to this, a conspicuous roadblock that could potentially debilitate these massive plans a bit and retard their course is the availability of solar modules. Pertinently, the government has decided to impose 40 per cent basic customs duty (BCD) on solar modules and 25 per cent on solar cells from April 1, 2022, a move that is being hailed as a saviour of the Indian solar manufacturing industry. 

Importantly, India has a PV cell manufacturing capacity of 4.3 GW and a module manufacturing capacity of 18 GW, of which, only around 4 GW produce modules of capacity over 400 Wp (watt peak), something that clients mostly demand. With BCD in action, modules are likely to become expensive to an extent where an EPC contractor like Gensol could install an entire metal shed-based rooftop solar project with Chinese Tier 1 module on a per watt basis. Notwithstanding this, as India looks to ramp up its domestic solar manufacturing industry, the government has issued a series of policies to support manufacturers establishing PV production lines in India.

And to drive demand for their products, which, Production-Linked Incentive (PLI) scheme for integrated PV manufacturing with an initial outlay of Rs 4,500 crore (USD 616 million), plus the additional allocation of Rs 19,500 crore (USD 2.5 billion) in Budget 2022 has the combined potential to produce at least 40 GW of solar modules. This is likely to stimulate a large demand for the PV ancillary market, including glass, ethylene-vinyl acetate (EVA), among other things, apart from skilled manpower. 

At Gensol Engineering, what are your key growth drivers?  

The fact that Gensol has been a part of the solar revolution in India since the stage of its infancy has saddled it with all the capabilities required to capitalise upon the mammoth opportunity that stares us in our face. It is worth noting that of India’s currently installed solar capacity of over 50,000 MW, Gensol has supported, through its spectrum of services, the development of projects adding up to at least 35,000 MW capacity, by touching them at various points of the value chain. 

This has helped Gensol grow into a complete solar engineering solutions provider with a strong focus on high-quality engineering, razor-sharp procurement skills and strong execution capabilities. Most importantly, Gensol’s young management with an unflagging spirit to face challenges and remain immutable to risks has been the vital component of its existence. 

What are the most positive technological and policy changes that are shaping the prospects of renewable energy industry in India? How does Gensol gain from such changes?  

China accounts for about 61 per cent of the global solar module manufacturing capacity of over 350 GW, which, invariably, exposes players like us to the whims of the international market. Then again, Indian manufacturers are heavily dependent upon imports mainly from China with their associated risks of shortages and price hikes, a fact that, in turn, makes us more dependent upon Chinese suppliers. This highlights the need for a sustainable, vertically integrated domestic solar manufacturing ecosystem so that we can shift our dependencies to domestic players which will spur demand and also create a more competitive market. In this direction, the Indian government’s ambitious PV installation target, coupled with policy support, has made the prospects for indigenous photovoltaic (PV) manufacturing increasingly vibrant. 

For the planned expansions under the envisaged PLI scheme, many large players are adopting the strategy of investing in new technology on a pilot scale in advance, to understand the process limitations and challenges before moving into large-scale capacity expansion. The investment in product/technology selection is guided by the levelized cost of electricity (LCOE) benefits instead of cost/Wp, which will significantly improve project economics and spark consumer demand. Gensol’s long presence in the market and its strong domain expertise will help it decipher the benefits of the technologies before the client, thus, helping it grow more business. 

Do you have any plans to enter EV vehicles, particularly commercial 4 wheelers?  

India is at the cusp of a significant green transformation, keeping in mind that it has promised to achieve carbon neutrality by 2070. It is worth noting that our national emissions are largely dominated by emissions from electricity production (56 per cent) and transportation (13 per cent), which throws a strong case for advancing businesses that help rapid transition towards a low-carbon economy. On these lines, Gensol is toying with the idea of entering into EV manufacturing, keeping in mind the vast pool of opportunity that this sector is pregnant with.  

What steps have you taken at Gensol Engineering to increase its market share across the product range?  

As a listed organisation, Gensol is constantly directing efforts at improving its delivery of services through better engineering and cost-effective solutions, particularly when this industry is very price-sensitive. Gensol’s presence on the BSE exchange is already helping it redefine its perception among its existing customers and potential client base, which has been the primary reason for the metamorphosis from a small company to a trusted solar brand.  

Then again, Gensol is constantly striving towards increasing its market share through backward integration into its supply, wherein we are planning to acquire some of the suppliers to gain a razor-sharp edge over supply and pricing of long-lead items. Gensol’s management has trained a strong focus on customer engagement, due to which, it has managed to increase its repeat orders to the tune of 30 per cent of the total order value.