EQ – In Exclusive Conversation With Mr. Sunil Badesra, Country Head, Sungrow India

EQ In Exclusive Conversation With Mr. Sunil Badesra, Country Head, Sungrow India.

1. What do you think about these chip shortages and the demand-supply economics concerning inverters or any other components is there in short supply?

Not only chip shortage even other components which are getting utilised in the inverters are impacted globally. Definitely, there is a shortage in the market for the last one and a half years but now the situation is getting tougher and tougher every month and there is a lot of pressure on us to increase the pricing because the demand is huge in the market and supply is short. There is a slow down in the Indian market but in the overseas market, there is a huge demand for the products and when the demand is more and supply is short so you can understand the kind of pressure on the pricing front on the suppliers.

And now because of the Russia-Ukraine war the situation I getting even more worst for all industries, everyone is aware that if it doesn’t stop soon then we’ll see more impact on our industry as well. There is a shortfall and definitely, as one of the critical suppliers for this solar industry we are also facing the same challenge, however, the commitment we have given in the market and whatever we are giving right now in the market is based on the situation which is under control as of now. Right now, for Sungrow it is more or less manageable but, on the supply chain front, we are also facing the same pressure and soon we may see increase in prices in Inverter segments as well.

2. Now, Sungrow has a huge manufacturing capacity in India, which is more than 10 GW. So what were the factors inspired for this massive expansion and Make in India facility?

Four years back when we put up our 3 GW set up, we were expecting that maybe the Indian market will operate somewhere around 7-8 GW every year and that was happening but in the last couple of years we have seen that this figure has crossed even 9 GW. So, based on that if we calculate, this 3 GW setup was not sufficient for us and at the same time the kind of demand which is coming in the market not only in the inverter but also the storage front, we decided it is the right time to do the expansion. This is the reason why we are expanding this factory from 3 GW to 10 GW capacity. I’m sure that in case we are not able to utilise this 10 GW set up here, the extra capacity we can utilise to export the inverters to other countries as well.

3. You are trying to make India manufacturing not only a facility to supply to India but also to export. This is extremely interesting and something very good Sungrow is doing to India, we are excited to know more about which countries are you targeting to serve?

In the last four years, we have shipped around 15 gigawatts of the inverter from the Indian factory and that shipment has gone to the U.S. market and for other couple of projects we have supplied in Europe market as well. Also, the countries which are near to India such as Sri Lanka, Nepal and Bangladesh also we’re going to cover from this factory. Now, we are expanding the setup to 10GW, so we are also exploring Middle East market projects if we are left with some extra capacity.

4. This is extremely interesting that India’s factory will become so important in Sungrow’s overall manufacturing bases. Is there a plan to expand this beyond 10 GW capacity? Is there a road map in terms of capacity addition that is already set?

Yes, we are already exploring but not in terms of the capacity but the new products which we are launching in the Indian market. We have planned to add a robotic cleaning system, which maybe you’ll see in the next couple of years. We are planning to manufacture it locally and then sell it in the Indian market. In terms of capacity, there is no challenge, we can immediately increase it like this time we have done it in one year and it all depends on the demand which is coming from the market. If market demand is there then definitely we are always ready to increase the investment in India.

5. This is great to hear that Sungrow is not only expanding its product range in inverters but also in energy storage and robotic cleaning. I’m excited to know how the expansion is planned to cover more and more services from Sungrow, especially with respect to first energy storage and then robotic cleaning?

Let me give you a brief on how we’re planning with this 10 GW setup. The current setup of 3GW which we’re having is majorly the assembly. But in this 10 GW set-up expansion, the major thing is the SMT line which we’re putting in. It means all the PCBs which are getting used in the inverters are going to be local and the reason behind it is that there is the majority of the tenders, which are coming these days, are asking for their class-1 requirement which says that at least 50% local content should be there in the inverter. So, I think we will be the first company who is going to do this of having local SMT line for all range of products. In this 10 GW, we have done 4 GW is a string inverter then balance 6 GW is for the central inverters. Whatever the numbers I’m telling you, is based on the single shift, so you can understand, in case we run the factory in two or three shifts, that the capacity is going to get multiplied accordingly. The other products which we are planning is in the BESS. We have already closed a couple of storage projects in India on a bigger scale, 50 MWh+ and going forward we’re expecting that more and more storage projects are going to come in the Indian market.

We are hopeful that as soon as these projects actually starts execution on the ground so we are going to have all the electronics components which are used BESS solution like PCS we’re going to manufacture locally in India. Even we are also exploring the assemble battery cells locally, in case these things works out and can give some advantage to our customers. So, definitely we are ready to do the investment in that batteries as well and as I mentioned we are launching few other products like Robotic cleaning systems with the name of Sunpure and maybe in next couple of years we will set up new factory for that if demand remains there and will start supplying all the robotic cleaning system locally from Indian factory. We also have planned to come in EV segment so there also you will see some movement 6-7 months later.

6. Where do you see more traction, is it going to be more towards rooftop and distributed solar or is it going to be more towards the utility scale projects. I personally see big market towards the utility projects an but also ensure rooftop and distributed solar has going to be another opportunity of its own. So what are your views on where are we going to focus ourselves first?

In the inverters we have three segments, one is in residential and rooftop segment, then C&I and third one is utility. In residential segment, we are already doing storage from more than 20 years. Many Indian companies are there, already doing this in the form of off-grid solutions. In C&I segment, it is going to take more time because it is a bit more of price oriented segment so currently the pricing of batteries are bit higher. Indian market is not going to accept it very easily. I don’t think that in next two years anything is going to happen in C&I segment. Once EV and this utility scale picks up then we can expect some price corrections in the batteries and then C&I market may pick up. Same is with the residential market because it is currently driven by the Lead-acid batteries so, gradually the market will move towards the new technology which is coming in the batteries. I think, you are also aware that many GW scale of tenders are coming, so I hope that it will start moving in next couple of years. We are also preparing ourselves for that so that in advance there should not be any challenge in terms of the capacity.

7. Was India only chosen outside China or there are other manufacturing facilities in other areas of the world?

For Sungrow, India definitely was our first overseas factory. We already have one outside India and that is a very big set up and now we have opened up a factory in Thailand also. India has big potential which makes more sense to have the local set up here because Indian Government is also very clear to support the companies who are making the local investment and which cam comply the local requirements of the tenders like 50% local content in all the inverters. So, we have very clear intention and that was the reason why we set up the factory four years ago. We also made the announcement of 10GW Factory expansion about set up the factory way before the duty was announced.

8. As Sungrow is oldest company in making inverters and you’ve seen the photovoltaic market changing the need and the way we are producing, consuming or transmitting the renewable energy. Over these years of technological innovation and the changing needs of market, what are the expectations that this sector is having from Sungrow, to drive that research and development to keep Sungrow ahead of technological innovations. How is Sungrow reacting to the market how is it bringing the future like it has always been able to do?

Six years ago, when we entered in the Indian market, then only European suppliers were there. So, how were we able to make our position in Indian market? It was because of those solutions which we were offering to Indian customers at that time, 5-6 years ago. That time market was completely operating on a 4 MW block size in solar plant in utility scale. Then, we shifted that market from 4MW to 10 MW block size, where customers were able to save on BOS cost. So this is one of the major reason why this price tariff has been achieved which the IPPs are bidding today. Definitely, technology plays a very vital role in that. Later on, from 10 MW size, we made the solution for 12.5 MW. Worldwide, Sungrow was the only company who first made 10 MW size possible for customers than 12.5 MW and now 12.5 MW is in market from last four years.

Now, we are coming up with new product solutions. The new inverter range which we have started proposing to our customers which is going to give them some indirect benefits in terms of BOS or how they’re going to maintain the inverters over a period of 25 years so there are many things happening. I think over a period of six months you will see what different solutions we are offering in Indian market and then I’ll be in better situation to give you the detailed information on this frame but yes, this is about the block size inverter rating and secondly site initially 1000 Volt market was there then we shifted to 1500 Volt now a lot of R&Ds happening, where 2000 or 2100 Volt solutions are getting worked out. As an inverter supplier will be ready to provide the solution to meet the demand of the market in terms of the new technology which is going to come. Aside this, there are many other things happening, we’re working on R&D where we are planning to remove the transformer also so you can connect directly inverter output directly to the 33 KV align. Over a period of years you’ll see the new solutions which we’re going to offer in the market.

9. You’ve been in Sungrow since Sungrow India has started. As in solar industry., people shift from company to other company. So, what is it with you or with Sungrow that you’re hooked to it. What are those goodies which are making this team so loyal, strong and forward looking?

Yes, you are right that I have completed more than six years with Sungrow India. I was one of the initial team members who joined Sungrow in India. But yes, I’m not the only one, we have many other team members who have completed more than five years and supported in Sungrow journey in India. It’s basically not only the people who are working in company made us to reach at this level but the culture of the company has played a vital role in Sungrow’s success in India. People know that it’s a MNC but the best part is the freedom in decision-making this company has given to the local people. We have majority of the team members who are associated with Sungrow for more than five years. We think that it’s a big achievement which Sungrow has achieved today. If team is stable, product/service is stable and company is stable then definitely nobody can stop you to become leader in the market.

10. Tell us more about the factory, is it a state of art facility with theme of roboticsuser and automations. We will do a factory tour sometime but it will be interesting to hear from you that how proud are you about this facility?

In current 3GW setup, we are able to meet the 20% local content. In the new setup of 10 GW, we are definitely adding lot of machinery, which will be automatic and in some machineries, need the manual intervention. We will definitely invite you to visit, once the complete setup is ready so that you can witness the things and what kind of automation we’re going to do in this factory. This would be better when you take the real factory tour by visiting the factory that would be better but definitely yes we are adding many machinery which is going to be automatic because there are few things which if I have manual intervention there are more chances to have some quality compromise, which we never do. We’re going to completely automize the system.

11. I would love to see the sales chart, like in first year what did Sungrow achieve selling in India and then every year what are the projections?

So we started our journey in 2014, where we installed our first project for utility scale in Rajasthan. In 2017, we achieved 1 GW then in 2018 we crossed 3 GW shipment in India. Gradually, we are growing every year. Initially, it was a bit slow because acceptance of our make was bit challenging for customers but over a period of time they accepted our make and product. Now, every year we are adding four and a half GW of annual shipment. We have already shipped 12 GW of inverters to Indian market and I think we are the only company in inverter segment who has crossed 12 GW in India.

12. In inverter market how do you differentiate yourself? Why should customers consider Sungrow over other manufacturers?

A. This is one of the most asked questions. Why not others manufacturers who are offering the same ratings and Make in India inverters, then why should they buy Sungrow inverter. The reason is that, first, we’re a global company, which gives the reliability to the customers. You’ll find many other companies who are limited to specific countries or specific regions but Sungrow is accepted across the globe. Our products are accepted across the globe. Secondly, when it comes to the product the kind of solutions we are offering starting from residential, C&I to utility. There are few customers who buy utility scale of inverters, at the same time they also do rooftop projects also, so they want a company who can give them the complete solution. If they want to buy rooftop or if anything in utility scale. We are providing the complete solution. Now the third part, the major part which is very critical nowadays, the service, because this is a service driven industry so if service is not there than it is going to be a challenging situation for everyone.

So we are very proud on that because we have done a lot of analysis and study in the market. Also, Sungrow is the only company who have more than 35 on role engineers who are directly on the company’s payroll. We are very strong in service. Sometimes, any product can fail, even our inverters has also failed in the market and we have accepted that, but the best part is in case some challenges are coming in the market we accept that, we provide resolution to the customers because if problem comes and we back out and try to hide our face or we try to hide our news from the market that is not correct. So in case of any problem, we are accepting it and giving the solution to the customer. This is the reason why the most customers which we have are our repeated customers and giving us repeated orders. These are the major 3 core strength which Sungrow is carrying to be able to get the business in Indian market.

13. How much did Indian government has supported or encouraged you? What are the responses since you have set up? Government has been very vocal about the making India a manufacturing hub, so how does the frequency matching is happening with the government?

I have personally met to the MNRE team many times and mentioned the challenges we have faced in previous years. Also, we have been sharing feedbacks with them, continuously. Even today, we are facing challenges in the market which is related to the investment, what we have done in the market and the setup we have put up in Bangalore to make this 10 GW possible. So, the major challenge what we’re facing right now is that despite investing, we’re not getting expected support because especially in the rooftop segment there are, except Sungrow, no other company has Make in India inverters. Other Indian manufacturers are there, who are in Indian market for more than ten years and still they’re importing the inverters from other countries. So, this kind of support we are expecting from government, we were pushing them to impose the duty and definitely they have taken one step. Now, we are expecting that this duty should be increased so that the kind of infiltration which is still happening from outside could be stopped. Otherwise, the kind of investment we have done and the efforts we are putting in Indian markets, sometimes we lack the motivation. This is one of the major things which we are expecting.

Secondly, when we’re talking about the PLI, people are talking about PLI only in terms of modules. I have said multiple times that I understand the modules’ contribution in the any solar project is about 60% to 65% but inverter is also one of the major component which we cannot ignore alongwith the other BOS items. That kind of motivation is very important to the suppliers like us. It is not only as even for other inverter suppliers also even for other BOS components. This kind of scheme is not going to have much impact on us but if it comes in action then definitely it’s a kind of additional motivation. It will be like, government is thinking and have some attention on the inverter companies. Currently, we are just feeling that inverter is completely ignored by the government. Nobody talks about the inverter, it’s just ‘module’ talk. These are the major things, so any other additional benefits if government can give to the players who are making additional investment by fulfilling requirement or 50% local content. This is going to be additional motivating factor for us.