In 2012, when the Hero Group entered the renewable energy space, there was no 175 GW generation target and the sector did not have the buzz it has today. Whether it was foresight or pure luck, the company is keen to cash in on the first mover advantage.

Ask Hero Future Energies Managing Director Rahul Munjal, the eldest grandson of Brijmohan Lall Munjal, about the group’s diversified portfolio (considering it has essentially been a two-wheeler maker), he jokes: “We knew the BJP was coming to power.”

After winning a solar power project in Madhya Pradesh at tariffs less than ₹5.5 a unit without any viability gap funding support, Munjal shares his views about the sector with BusinessLine. Excerpts:

You have shifted your focus to solar from wind projects. What brought about this change?

When we started, we had said solar will be 25 per cent of our portfolio. Today, we say it will be 50 per cent. Besides, solar tariffs have now bottomed out. We are looking at a portfolio for wind and solar in the 50:50 ratio. Right now, we have a total of 268 MW of generation capacity, and of this, 48 MW is solar. For this year, we would like to do 150 MW each for solar and wind.

What about hydro? Has it gone off your priority list?

From the beginning, we were very clear that we will not go into greenfield hydro projects and only look for acquisitions. We have looked at some projects in the past, but let go as they have not made much financial sense.

Besides, with all the problems surrounding hydro, it just does not make sense at the moment.

What is the progress with your commitments made during the event Re-Invest 2015?

We had committed 5,000 MW by 2022. This year we should end with 550 MW. We will try to reach 1,000 MW by the end of next year, which would leave us with 4,000 MW to achieve in the next four years. Hopefully, we are close to it.

Given the Hero Group’s manufacturing legacy, would you enter solar panel manufacturing down the line?

No, we are not looking to enter manufacturing at all. This is because we are at the right end of the food chain. I don’t think we are in a position to start manufacturing solar panels at the cost and quality that China has already achieved.

They have achieved it because of certain government incentives and also because of the order book they have in hand. To become a manufacturer in solar today you need to be able to sell at least 1,000-2,000 MW. What excites me is the research.

At some point in the future, we would enter the research space — I just don’t know when.

What do you make of the Centre’s ambitious renewable energy targets?

I like the fact that the government has got the ball rolling and got the world excited about renewables. Whether 100 GW is the right number or if it is too high doesn’t really matter.

Even if we miss the target and reach 100 GW a couple of years later, there is absolutely no harm in it. It will still be a great achievement.

If by 2022 we are adding 10-14 GW a year in renewable, I think we will be in a very nice space.

Correction

This copy has been modified to correct the designation of Rahul Munjal, from Chairman of Hero Future Energies. He is the company's Managing Director.

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