SunEdison Inc, a major US investor in renewable energy in India, has not firmed up its plans to set up a multi-billion dollar solar panel manufacturing unit and has said it will not acquire any power generation projects in the country.
“The way we used to run our business in Asia was from India. Now that India has become so large, Indian resources will focus only on India,” Ahmad Chatila, global chief executive officer and president, SunEdison, told Business Standard.
“We do not need to add a lot of people because we do not construct these projects, we are just developers. Our staff strength will not increase in India,” he added.
SunEdison has announced plans to develop 15 GW in the next seven years in India. “Today we have 2 Gw in pipeline. We will focus on organic growth. We could partner others, but we are not buying companies,” Chatila said.
SunEdison has won close to 800 Mw of solar power projects through the National Solar Mission in Gujarat, Rajasthan, Madhya Pradesh, Andhra Pradesh and Karnataka. Around 157 Mw is operational and the rest is yet to be commissioned.
Battling deteriorating financial health, SunEdison India has sold 425 MW solar power projects to TerraForm Global for $231 million. Business Standard reported last month the company was downsizing its Indian operations by laying off 5-10 per cent of its Indian workforce.
Chatila said SunEdison was not under debt pressure but faced challenges from falling oil prices. Its investors had started pulling out because their oil investments were under pressure, he said. “Like any other dislocation, the cycle will last three or four quarters,” he added.
Chatila said SunEdison had completed 1,600 projects with none stranded anywhere in the world in the last 10 years. “You do not achieve such a level of execution if you take risks. We are a risk-averse company. We do not take merchant risk or forex risk. We do not launch a project unless we know we can finish it,” he added.
In wind power, Chatila said SunEdison would deploy projects as an independent power producer and not look at acquisitions. SunEdison called off its deal with Continuum Wind Energy last month to acquire 412 MW of the latter’s projects.
SunEdison is still indecisive about its investment in a solar manufacturing unit to bet set up with Adani Enterprises.
“The investment we are thinking of making is billions of dollars, and these things take a long time to manifest themselves. Doing a power plant is much easier. It takes three years to construct these chemical plants. You do not know where the volumes and price will be, and the cost could be higher,” Chatila said.
The company does not have a specific strategy to meet its India target of 15 Gw by 2022. SunEdison has been operating in India for five years and recently quoted a historic low tariff of Rs 4.63 per unit for a 500 Mw solar power project in Andhra Pradesh. The same tariff was quoted by another developer to win a 350 Mw project in the state.
“We have reduced our costs by 80 per cent in the last five years. Cost will continue to decline and efficiency will improve. I do not know the exact number, but a 30 per cent reduction in tariff from current rates (is likely). Solar panel prices will see the same reduction,” Chatila said.