Cleantech venture capital, India, Solar

Moser Baer’s new bet on solar energy (India)

January 11, 2008 ( – Encouraged by the rising demand for non-conventional energy, Moser Baer PhotoVoltaic Ltd, a unit of CD, DVD, and other optical media maker Moser Baer India Ltd, is looking at revenues of Rs6,000 crore in 2009 from its thin-film solar photovoltaic panel factory at Noida, which will start operating from April. The Noida unit will be the world’s second largest such unit after Phoenix, US-based First Solar Inc.’s. Photovoltaic cells convert the sun’s rays into electricity.


The push for Moser into this manufacturing stems from the company’s expectation that the cost of energy generated from such sources will increasingly become competitive as compared to electricity generated from some of the more expensive conventional sources, such as diesel, as crude prices top $100 or Rs3,950 a barrel.

MBPV today has technology, partly developed in association with start-up firms it has invested in, that generates electricity at less than Rs15 a kilowatt-hour, or unit, which it expects will drop to under Rs5 each unit in three to four years, said Ratul Puri, executive director of Moser Baer. The cost of generating so-called peaking power to meet small spikes in electricity demand through diesel or furnace oil is at around Rs10 to Rs12 a unit.
Puri is betting that synergies between making optical discs and photovoltaic panels and efforts to drive down high prices of solar cells will push up sales volumes sharply. “The market has extreme price elasticity. With every 10% fall in pricing, demand increases by 3x to 6x (three to six times),” he said.

Moser Baer had made a similar bet in 2000 when it set up a factory with the capacity to make 40 million compact discs a year (global demand the previous year was 60 million); today, it has a 17% share in the $23-billion-a-year market for discs.

The Noida unit will make equipment capable of generating 60 megawatt, or MW, of power just behind First Solar’s 250MW capacity today that is being ramped up to 1 giga watt.

“We plan to ramp up this 60MW at the thin film fab in Noida to 200MW worth solar energy by the end of 2009. That should get us revenues of $1.5 billion,” said Puri. Moser Baer ended last year with revenues of more than Rs2,000 crore.

MBPV is also preparing for a push into electricity generation through photovoltaic technology. In November last year, it signed an agreement with the Rajasthan government to set up a 5MW solar power project, which will be the largest grid-connected solar farm in India, costing about Rs100 crore.

Companies and governments are keen to start photovoltaic-generated energy. The ministry of new and renewable energy last week said it would subsidize as much as Rs12 of each unit of solar-generated electricity.

“In spite of having such immense potential, solar (energy) has not been able to take off because of expensive installation costs. So we hope that this subsidy, even though at a demonstration level, should help popularize solar photovoltaics,” said Vilas Muttemwar, the minister in charge of renewable energy.

Effectively, electricity from MBPV’s Rajasthan solar panel farm will then cost Rs3 for consumers, though the firm will be paid Rs15 a unit.
An expert questioned MBPV’s aggressive pricing expectations.

The price per unit of solar-generated electricity will likely drop only “to Rs12 a unit in the next three to four years,” said Shirish S. Garud, a fellow of renewable energy technology applications at The Energy Research Institute. One critical reason for this slower price drop could be issues related to the supply of solar grade silicon, a key input in solar panels.

Puri expects that MBPV’s stakes in four photovoltaic start-ups-spread over three main solar panel technologies: conventional crystalline silicon, the thin film solar panels and concentration-will help it, though. Between the first quarter of calendar 2006 and the middle of 2007, MBPV announced tie-ups with four firms.

One of these, California’s Solfocus, for instance, develops a high concentration photovoltaic product, which uses a large lens to focus the sun’s rays better on a small surface. MBPV bought the manufacturing rights and exclusive distribution rights to make and sell the product in India and neighbouring countries.

MBPV also has a minority stake in the California-based nanostructures technology firm Stion Corp., an innovator of nanotechnology-based photovoltaic products which it will begin making by 2009-10. And it has investments in Solaria, another concentration technology firm based in Fremont, California that makes low-cost, high efficiency solar solutions (MBPV will begin shipping these panels by end-2008) and a 40% strategic equity stake in Slovenia-based Solarvalue Proizvodnja d.d.

Thin film photovoltaic panels present ample room for further development and deployments since 90-95% of the solar panel demand is currently met by crystalline silicon. “Thin film is an emerging market and mass production has not yet taken off,” said Amol Kotwa of research firm Frost and Sullivan.

“Thin film will see large emerging applications and a robust demand (for manufacturing capacity) that is expected to grow 10-fold from 250MW currently to 2GW by 2010 with a market size of $6 billion,” said Shushmul Maheshwari, chief executive of RNCOS E-Services Pvt. Ltd, a New Delhi-based market research firm.


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