Reliance’s REC Acquisition Could Reduce Indian Solar Developers’ Dependence on Imports

The company can optimize its project execution capacity with REC to lower HJT technology costs


Solar developers and module manufacturers believe Reliance Group’s recent solar acquisitions will help India provide an alternative to Chinese products.

In June 2021, Mukesh Ambani, Chairman of Reliance Industries, announced that Reliance Industries would invest ₹750 billion (~$10 billion) in clean energy. The company said it would build an integrated solar photovoltaic (PV) factory, advanced energy storage battery manufacturing unit, green hydrogen, and fuel cell facility in Jamnagar, Gujarat.

Mercom spoke with solar developers and module manufacturers to understand the strategic importance of Reliance’s recent acquisitions and their impact on the Indian solar market.

Reliance’s acquisition of REC

Reliance New Energy acquired REC Solar Holdings from China National Bluestar Group for $771 million.

 On Reliance’s acquisition of REC, Animesh Damani, Managing Partner, Artha Energy Resources, said, “As an Indian developer, we are looking at the foray of the Reliance Group in renewable energy very positively. The Indian solar module manufacturing sector needed a large conglomerate like Reliance to enter the space. For too long, Indian developers have been primarily dependent on Chinese solar manufacturers. Indian manufacturers have not been able to ramp up manufacturing capacities and provide costs at par or lower than their Chinese counterparts.”

According to Damani, Reliance’s entry into solar manufacturing would provide India with an alternative option for Chinese products. The vertical integration would result in competitive prices, enabling  Reliance to take on Chinese manufacturers.

Vinay Pabba, Founder and Chief Executive Officer of VARP Power, concurred with Damani. While heterojunction (HJT) technology is not unique to REC Solar, it provides superior efficiencies to the passivated emitter and rear cell (PERC) modules. “Therefore, this is a smart and strategic move, and Reliance intends to combine its formidable project execution capacity to lower HJT technology costs. The hope is that REC can provide a superior technology product at a compelling price point in Reliance’shands. Therefore, Reliance is trying to be ahead on the technology curve and is investing in REC which has the best HJT product today.”

Bharat Makkapati, Regional Sales Director at ZnShine Solar, offered a different view. “There will not be any immediate significant impact of these acquisitions in the Indian solar market. The investment is more about the acquisition of technology. HJT provides higher efficiency than PERC modules. However, it is an expensive technology because the production capacity is low currently.”

“With this acquisition, REC also wants to expand the production capacity of its HJT technology. This will help Reliance go global and cover European and American markets. I believe Reliance will enhance the production of HJT on a large scale that can drive down the overall price of HJT,” Makkapati said.

In November 2020, the government said in a notification that it would allocate ₹1.45 trillion (~$19.61 billion) for the ten critical sectors over the next five years, including high-efficiency solar PV modules.

Reliance’s 40% stake buy in Sterling and Wilson

Earlier this month, Reliance New Energy Solar signed an agreement with Shapoorji Pallonji and Company to acquire a 40% stake in Sterling and Wilson Solar through a combination of primary investment, a secondary purchase, and an open offer. Sterling and Wilson Solar solar engineering, procurement, and construction (EPC) company with a presence across 24 countries.

Pabba said, “The acquisition of Sterling and Wilson also weaves into Reliance’s narrative of becoming a clean energy giant. Having an EPC company in-house to execute solar projects for internal and external customers becomes easier with sterling and Wilson in their fold.”

Damani disagreed with Pabba and said Reliance’s need to focus on EPC does not make strategic sense. “However, one can assume that this was a well-thought-out decision, which might have entailed a good offer.”

Apart from the acquisitions, Reliance New Energy Solar has invested €25 million (~$29 million) in Germany-based solar wafer manufacturer NexWafe GmbH.

Impact on the Indian solar market

Several solar project developers and module manufacturers that Mercom spoke to believe Reliance’s foray into the renewable energy market and its recent acquisitions will help bring depth to the Indian solar manufacturing market. In addition, it will also reduce Indian solar developers’ dependence on China for modules and other solar-related products.

Makkapati said, “There is a larger space for investment in the Indian solar market. I hope that the current investment by Reliance is just the tip of the iceberg, and it will continue to invest heavily in the market. With the entry of conglomerates like Reliance, Adani, Jindal, and others in the Indian solar industry, India can export solar products at a higher scale to the global markets.”

Pabba said high efficiency and low-cost panels could reduce the levelized cost of energy (LCOE) of solar power, which is a win-win situation for all, including developers, distribution companies, and consumers. This can lower tariffs and make solar more attractive as a technology choice for clean energy in the domestic market.

To address the issues related to the domestic manufacturing ecosystem, Mercom hosted a virtual conference, ‘Mercom India Solar Forum 2021‘ on October 21. The panelists believe that creating a self-sustained solar manufacturing ecosystem is just the start. Success will also depend on technology upgrades, consistency in supplies, quality, and competitive pricing. Click Here to view a recording of this panel discussion.


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