— Kai Vogt, Director - International Business, centrotherm photovoltaics AG

centrotherm photovoltaics AG is one of the world's leading technology and equipment provider for the photovoltaics sector. In the 2010 financial year, the group achieved revenue of €624.2 million. Kai Vogt tells Sandeep Menezes that India has missed the bus in semiconductor manufacturing and can ill afford to do so for the solar PV manufacturing.

What is centrotherm's future business strategy in India? How will centrotherm's foray into India benefit the solar sector?
India is regarded as an important growth market for centrotherm photovoltaics. We now have local presence by opening a subsidiary in India to support our existing and prospect customers in getting them to be best in class with low production costs and produce high quality solar cells. Our office in India will provide sales and support services to our clients.

Our early customers in India manufacture c-Si cells with the highest efficiency in India and compete with global players in quality. We are bringing the most advanced solutions with German engineering and technology to drive down the cost of solar PV electricity.

We are here in India to support and enable the National Solar Mission, one of the objective is to take a global leadership role in solar manufacturing (across the value chain) of leading edge solar technologies and target a 4-5 GW equivalent of manufacturing capacity, including setting up of dedicated manufacturing capacities for poly silicon material to make solar cells.

Tell us about some global projects wherein centrotherm's equipment, technology has been utilized.
centrotherm photovoltaics brings with it more than 30 years of experience in serving the PV industry as leading equipment and technology supplier. The company has enabled and shown success especially in countries like China, Taiwan, Korea and others.

In the segment of silicon & Wafer centrotherm photovoltaics succeeded last year the commissioning and production of first silicon at polysilicon factories in Taiwan, China and Europe, and the signing of an agreement to construct a silicon factory in Qatar comprising an order volume of around €150 million.

In the segment Solar Cell and Module centrotherm photovoltaics AG has successfully transferred excellent laboratory results to production operation at the Chinese customer Dongfang Magi Solar in the first quarter 2011: an average 18.5 percent solar cell efficiency was achieved by using an upgrade package for selective emitter technology and exceeded the current industrial average.

 In the second part 2010 centrotherm photovoltaics has started the first step of the large-scale solar cell production project at Chinese state company Lu'an Group Corp. in Changzhi. The 60 mw solar cell turnkey factory is based on state-of-the-art technology. At the same time, the foundation stone was laid for additional production lines to manufacture solar cells to a level of between 300 and 360 mw, which will be installed during the second expansion stage. In overall terms, the customer plans to expand its manufacturing capacity to one GW over the coming years. In parallel, centrotherm SiTec GmbH, a one hundred percent centrotherm photovoltaics AG subsidiary, is setting up production systems at Lu'an Group for the manufacture of polysilicon with annual production output in excess of 3,000 tonnes. centrotherm photovoltaics is setting and supporting a new trend in implementing the integrated factory concept by delivering polysilicon production and solar cell manufacturing as a one-stop solution to position their customers as cost leaders on the market.

Do you foresee India evolving as a base for solar PV cells given that it does not yet have established semi-conductor industry?
It is absolutely clear that India has to develop a base for solar PV cells to fulfill the Solar Mission objectives. India has missed the bus in semiconductor manufacturing and can ill afford to do so for the solar PV manufacturing. The lack of semiconductor manufacturing industry should motivate India to ensure that the nascent manufacturing market for solar PV develops and provides the energy security that the country needs. We wish for the first phase of solar PV to be successful as it sets the tone for the mission success. We believe the central and state governments are doing their part and it is up to the industry to execute.

Solar energy generated from just 10 per cent of India's Thar desert, can meet all of India's power needs. But solar as an energy option is still under utilized in India. What is your view?
The abundant sunshine in India and growing energy needs makes it imperative that we overcome challenges to make solar energy a reality to meet a large share of the energy needs. It is clear that there are enough fallow lands available in India to make this a reality. However there are other challenges:

• Cost of funds in India as solar PV has a high upfront capital cost. Understanding of the technology by banks to finance solar projects
  
• Diesel subsidy masking the true cost of electricity in stand by diesel generators. Some efforts have been made to rectify this by Ministry of New & Renewable Energy by targeting solar power usage in telecom towers for example.
  

The solar mission has targeted installed capacity of 20,000 mw by the end of XIII Five Year Plan in 2022. How feasible is this target? Tell us about the role to be played by companies such as Moser Baer in achieving this target?
The 20GW target by 2022 has to be viewed in context of the energy needs of India in 2022 and the fossil fuel availability. The policy makers in India have no choice but to set ambitious targets and drive the industry. A similar effort is underway in countries around the world. Already there are reports of coal for the upcoming thermal power plants being secured from mines in Australia and Indonesia. The target for solar mission is definitely achievable if the pace of innovation is kept up to reduce the price. This means the technology developers like centrotherm continuing the pace of innovation, manufacturers building scale to lower the cost, installers that develop new applications and techniques while the government facilitates the regulatory field.

Centre recently specified that only Indian components should be utilised in manufacturing solar photovoltaic modules to claim subsidies under JNNSM. Any comment?
The regulation mandates that the c-Si modules for a solar power plant should be manufactured in India this year and the c-Si cells and modules should be manufactured in India. We are supportive of the Government efforts to boost local manufacturing and develop the value chain.

India's solar industry is projected to generate $3 billion in revenues by 2013. Will this growth be mainly driven by domestic demand?
The solar mission target is for installation of 1.3GW by 2013 (including solar PV and solar thermal). The $3 billion revenue projection is in sync with that domestic installation target.

There are huge solar PV off-grid opportunities across India since over 400 million people do not have access to grid connected electricity. Comment.
Solar PV off-grid enables remote villages and tribal sections to get access to electricity. The upfront capital and cost of funds is a deterrent for off grid opportunities. Our customer Tata BP Solar has pioneered this in India by working closely with banks and making it a viable option for many rural households. We believe that with the government focus for inclusive growth and making electricity available for rural, the off-grid opportunity will develop further.

Critics argue solar industry can't survive without governmental assistance. Comment.
The total cost of subsidies and environmental impact of fossil fuel (coal and diesel) is not captured in their market price. The pollution and health cost for usage of fossil fuel is bourn by the country. It is imperative to invest in the future development of new and renewable energy sources.

The cost of fossil fuel energy will continue to increase as these resources turn scarce. On the other hand, solar PV is established as a technology that has been successfully reducing the cost of power as the industry grows. Already the cost of solar PV power has reached the grid parity levels (cost of conventional energy sources) in some markets and more markets will open up as the cost continues to come down.