On making errors: How and why we write about the Indian solar industry
We regularly publish reports on the Indian solar market. These are read by a majority of national and international market stakeholders: on average by 10,000 people, including most industry leaders. We realize and appreciate that our views and opinions are taken seriously and influence the market. That only reaffirms our commitment to ground them firmly in facts. Only: facts, are not always clear. This can lead to inaccuracies or errors in our writing – such as in our current INDIA SOLAR COMPASS (April 2013 Edition). We strive to always improve our coverage and analysis and get to the bottom of key market developments. In this endeavor, we invite all market participants to be in active touch and share information with us.
- In a young, dynamic market, such as the Indian solar market, getting facts right is of particular importance – but also particularly challenging. A good case in point is project commissioning deadlines.
- We strive to provide independent, analytical, transparent, business-driven and fair opinions to the market. This can be contrarian. We believe that asking questions and challenging assumptions helps the market grow.
- We interact with all market participants and constantly receive information from the market. Some of which is off-the-record, which we don’t make public. Some is on record, wherein companies help us clarify certain topics.
In writing about the Indian solar market, we rely on primary information from market participants as much as on our own wits. Such information is sometimes difficult to gather and then to verify. The market has many grey zones, involving the complex management of infrastructure projects with multiple interests, significant investments and an imprecise regulatory environment.
Commissioning deadlines are a case in point: penalties for overstepping are high, commissioning is not always entirely within the control of the EPC or developer (who also depend on the cooperation of the authorities) and rules are not as clear as they should be.
In our current INDIA SOLAR COMPASS (April edition), we had originally written that a number of projects under NSM batch two/phase one did not meet the February 26th commissioning deadline. This information was based on a list published by the Ministry of New and Renewable Energy on February 28th, which listed projects commissioned. We assumed that the projects not listed were not commissioned when we published the report on April 1st 2013. Some of the involved parties have reached out to us directly to clarify the matter and give us details to show that they have successfully met the commissioning deadline. In fact, in a list published by the MNRE and dated 26th of March, most projects are listed as commissioned. We have subsequently updated the passage in our report (refer) and will cover this topic in more detail in our upcoming publications.
There have been three direct take-aways for us from this incident. Firstly, we need to research even more thoroughly and involve the other stakeholders in the industry even more actively than we already do. Secondly, in a dynamic environment, we need the involved companies to also interact with us as has been done in this case. Thirdly, the process of ‘commissioning’ should be handled with more transparency and precision by the involved regulators. We have reached out to them and while having very helpful conversations, it is clear that they would also appreciate a better process. In batch one of phase one of the NSM, there already was a discrepancy between reported and actual commissioning dates for eight projects and NVVN had to review all projects to find these discrepancies (refer).
This incident made me think about why we do what we do. We believe that solar is (a) a useful technology for India, that (b) it can help India to develop, and that (c) it is a good business proposition for those who accept normal returns and take a long term-view. It can be a ‘good’ thing for people, for entrepreneurs and for the environment. I personally see solar more along the lines of a distributed ‘mobile phone’ revolution than of an infrastructure play. But it might not be either or and other paths can emerge. The verdict is out, the competition is on and many energetic market participants – many of them much smarter than myself – are developing new solutions even as I write this.
What I can say – speaking for myself and for my colleagues at BRIDGE TO INDIA – is that, if the solar market gets derailed into a quagmire of Indian infrastructure business-as-usual, we would rather not be a part of it. We believe that there is a link between quality (in our case: of analysis, but also: of products and processes) and transparency – and a sustainable market, and ultimately, progress for the country as a whole. Access to reliable and analytical information is a key driver for the market to prosper. It allows for the best allocation of resources and assessment of risks. It reduces costs (e.g. of lending, but also of making mistakes) and helps channel the efforts of numerous energetic, new market players – whether individual entrepreneurs or large corporates – towards the commercially viable, scalable solutions that are needed and within reach.
We want to see the market grow and prosper. We understand that it is young and dynamic and that India is a very diverse and complex market place. We believe that so far, things have gone quite well. India has rapidly built a strong base with an installed solar capacity now exceeding 1.4 GW. On the policy side, this has been achieved through a successful process of trial-and-error, wherein clarity was sacrificed for flexibility with the result that competition was kept high and costs low. In addition, a host of new solar business models outside the dedicated solar policies have been established. These focus on providing solar power solutions to energy-starved end-customers.
The market will continue to develop in exciting ways. In order to cover it, we interact closely with all stakeholders: with government and regulators, with consumers and with businesses, entrepreneurs and financiers. We find that most of them are very cooperative, ready to share information and exchange views. Many reach out to us for our off-the-record opinions on certain topics. And we, in turn, reach out to them. There is a growing group of stakeholders that understands the value of interaction, analysis and communication. There is an ‘Esprit de Corps’ of being co-pioneers in an electrifying market and a sense that we work for the same goals. We invite everyone to become a part of this community, to help us understand what makes solar work and what holds it back, so that we can be as accurate as possible in our market analyses and help build the market – in everyone’s interest.
Tobias Engelmeier is the Managing Director at BRIDGE TO INDIA.
What are your thoughts? Leave a comment below.