With over 80% of solar cells and modules used in Indian projects coming from China, the Corona virus outbreak has the utility scale solar industry hard, but the worst hit are rooftop sector players, because most of them are small sized companies, experts said.
Only about 25% of rooftop installation is accounted for by 10-12 leading players. Hence it is quite likely that small companies may go bankrupt or exit the business altogether because of the current lockdown. “Smaller rooftop players don’t have the financial capacity to bear losses or meet extra working capital requirements. They are also unlikely to get any financial assistance from the government or banks,” said Vinay Rustagi, Managing Director of renewable energy consultancy firm Bridge To India(BTI)
Indeed, the effect on the residential rooftop market may well be catastrophic, Rustagi said. “Rooftop solar is not an urgent necessity for consumers. So when most of them are worried about jobs and financial security, they will delay decisions regarding installation of rooftop solar. Bank debt is also expected to get tighter for most consumers in the current environment,” he said.
Demand for rooftop solar may unfortunately be depressed for a fairly long period of time,” he said.
Total residential rooftop capacity stands at 710MW as of September 2019, according to BTI.
India installed 1700MW of rooftop capacity in 2019. 90% of this capacity installation came from the Commercial and Industrial (C&I) segment. Although developers are worried that all facilities are shut down because of the current lockdown, they appear to be taking measures to ensure revenues continue to flow.
“We are doing contingency planning because we have some customers who are continuing to run, like pharma companies and data centres. We’ll see if they can take more power to make up for the shortfall,” said a leading developer requesting anonymity. “In the short term the priority for open access developers is making sure there is no disruption in the cash flows. But if this situation persists for another three or four months, then that becomes a bigger problem,” the person said.
