Comments
US-based SunEdison’s MoU with Adani Enterprises to build a $4-billion plant to manufacture solar power equipment in India will take more time to materialise.
“These deals take a long time to manifest themselves. It took us two years to negotiate our (manufacturing) deal with Samsung in South Korea. This is because such projects are capital intensive and extremely expensive committal plans,” Ahmad Chatila, Global President and Chief Executive Officer of SunEdison, told BusinessLine .
SunEdison and Adani Enterprises signed an MoU in January to construct a $4-billion facility to “vertically integrate all aspects of solar panel production on site, including polysilicon refining, ingots, wafers, cells and panels production”.
Cost advantage Chatila said: “…For a chemical plant, you do not know the price, you do not know the volume, it takes three years to implement. So, because of that, the risk is much higher.”
Emphasising that SunEdison remains committed to manufacture in India, he added that the cost advantage will only be on the cell and module aspect of manufacturing.
“There are two sets of cost in relation to manufacturing. One is the chemical plant where we have to use the most advanced technology, leapfrog the installed capacity in the world and create something new. On the cell and module side, which is assembly, we think India can be competitive and be lower in costs than any other country in the world,” he said.
Clarifying on the recent announcement of selling 425MW of its solar power plants to the company’s ‘yieldco’ TerraForm Global, Chatila said: “There are three models we follow — one is we sell the projects to our yieldcos, in some cases we keep the projects on our balance sheet and finally we also sell the projects to third parties like we always did. We will keep using these models for future projects as well.”
Yieldco model In the ‘yieldco’ model, the firm sells its power plants to a yieldco company owned by it, which in turn collects revenue and pays dividend to shareholders. SunEdison has two yieldcos — TerraForm Power and TerraForm Global, with the latter focussed on emerging markets.
Chatila said that as the cost of credit falls in India, competitors will be able to match SunEdison’s aggressive bid. Recently, the US firm bid ₹4.63 a unit for a solar power project, the lowest seen so far in solar.
He expects solar power tariffs to come down by a further 15 per cent over the next two-three years driven by technology improvement, evolution of business models and reduction in operating and maintenance costs.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.