Business Briefing 15/08

Applied Materials’ Madhusudan Atre does a reality check on India’s solar power ambitions.

The California-based $8 billion firm Applied Materials is the world’s largest capital-equipment supplier for the semiconductor, electronics and solar power industries. Madhusudhan Atre, the company’s president in India, speaks about the future of solar power in India.

Q Is the National Solar Mission’s (NSM) target of generating 20 gigawatts of power by 2020 a wild goose chase?

A It is a stretch target, but not a wild goose chase. The policy is put in place by experts who have consulted the industry and academia. The target is a significant statement of intent. Previously, what you got from the Government was mere platitudes about clean energy. Now for the first time, we are talking hard numbers. Even if we achieve 50 per cent of the target, it will be great. Spain, for instance, has set up 2-3 gigawatts of solar power capacity in about a year.

Q Is it a bigger business opportunity for private players than nuclear power?

A I don’t know if it’s bigger or smaller, but this could prove to be a fantastic inflexion point for India. Currently 1 MW of solar power requires 3-4 acres of land and an investment of $3-4 million. A rough calculation suggests that the NSM’s target presents a $300 billion business opportunity.

Q Isn’t solar power in India a chicken-and-egg case? End users want to wait till its cost of production comes down, and producers want to wait till economies-of-scale kick in, to go in for mass production.

A Things should happen in unison, and that’s why the NSM is important. Applied Materials’ challenge is to manufacture equipment that can keep costs low, utility companies need to ensure distribution is efficient, and banks should consider this a priority lending sector. More than the on-grid production where huge panels on vast tracts of land generate power and feed into the grid, from an Indian perspective, the off-grid standalone, localised generation would be more important. There are 250,000 cellphone towers in India—they will number 400,000 in the next two years. Almost all of them run on smoke-spewing diesel generators. It’s very easy to replace those diesel sets with solar power at least for the 12 hours when sun is shining. What cellphones did to telecom, solar will do for power. You can reach every hut in every remote corner of the country without laying the wires and transmission lines. You just have to plonk something on the roof.

Last week Arti Gupta went to a Standard Chartered Bank ATM in Bangalore to withdraw Rs 3,000 using her State Bank debit card. The transaction was declined. But when Arti checked her account statement later, she found that her account had been debited Rs 3,000. Unable to get help from SBI’s call centre, she vented her anger via an online forum. The problem is not new or unknown, but in recent weeks, there has been a spate of similar incidents. An ICICI Bank spokesperson explains that this happens due to excess load on the ‘national switch’ that acts as a clearing house for interbank ATM requests. This switch conveys the withdrawal request to your bank, which takes the amount out of your account. But sometimes, the switch does not convey the approval from your bank to the ATM, which is unable to dispense cash even though your account is debited! “Ideally, one should withdraw cash only from your own bank’s ATM,” he says. If the problem became endemic last week, he says, it was because of the load caused by PSU banks’ two-day strike. RBI guidelines say that once a bank receives such a complaint, the bank has to investigate and credit the amount back within 12 working days. “If that does not happen, a customer can approach us and can also claim compensation,” says an official in the banking ombudsman’s office.

About The Author

arindam