The company keeps on talking about REC repurchase obligations (RPO) being enforced on state DISCOMS. Given the poor financial state of affairs of DISCOMS, I think relying on RPO enforcement would be impractical in the short/medium term. If there comes a regulation to enforce coal/gas based power producers to buy RECs then that might be a big growth trigger for the company.
I have some background in solar energy project viability estimation and would like to share my thoughts. Broadly speaking, there are generally 2 kinds of solar power projects:
1) Large commercial projects
2) Small roof top projects
Small roof top projects might require a battery for storing excess solar power generated during the day. The cost and life time of the battery makes such projects un-viable in the short/medium term and also increases the operational headache (One has to perform regular battery maintenance, replace battery every 3-4 years etc). Hence you won’t find a lot of these roof top projects on residential buildings. It might make some sense for commercial establishments which have a a large rooftop area and power requirements during the day. However the trigger for roof top based projects would come when state DISCOMs start implementing the net metering system. In net metering, the rooftop generation is connected to the grid in a 2 way mechanism. One can sell excess electricity generated to the DISCOM during the day, thus avoiding the use of batteries to store the excess power generated. And purchase electricity from the DISCOM when there is no sunlight via the same connection. There is no net metering in India at the moment (correct me if I am wrong).
In the AR the company has not talked a lot about taking up large scale commercial projects. This is a negative in my opinion, given the current state of affairs in India only large scale projects would be viable for most investors and the success of roof top projects depends heavily on the implementation of net metering. That is not likely to come anytime soon.
Awaiting more clarity on the future steps of the management. This could be taken up in the investor concall.
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