This is a long time coming … and given that SunEdison has now crashed into bankruptcy and CEO Ahmad Chatila just resigned, it might have been more useful to publish earlier. Nonetheless, the points Pashupathy Gopalan, SunEdison’s President of Asia Pacific & Sub-Saharan, makes in the presentation are still relevant today.
As you can see, this presentation was given at the large institutional investment conference in Mumbai, India, at which I also presented. (A video of the presentation from India’s Minister of Power, Coal, and New & Renewable Energy, Piyush Goyal, should be coming shortly as well.) As always, a bit of a summary is provided below the video, but I think it’s much more valuable to actually watch the presentation — and then look at the notes.
Pashupathy didn’t start off with a presentation. Rather, he started off by collecting questions from around the room, and then answering several of them in grouped monologue of sorts, then he did that again. In the first group of responses, he started off by answering a question regarding the viability of SunEdison’s and other solar companies’ extremely low solar power price bids in auctions in India and elsewhere. Such low bids were not considered to be around the corner just a couple of years ago, and the questioner (as well as many others around the world) wanted to know if meeting such prices was really viable in the coming few years.
Pashupathy highlighted the continuing evolution of solar panel technology and costs, via one improvement after another, including improvements at the cell and panel level as well as improvements in maintenance (keeping the panels clean) that maximized output at lower cost. He also noted government support that took away risk, and better financing terms as a result of this and as a result of the overall improvement in solar bankability.
He also highlighted a report from Bridge to India that showed ~75% of winning bids in solar auctions in India were from foreign companies, demonstrating that India’s solar market had matured a great deal and was seen as a smart place for investment and development, even at low prices.
I was happy to hear an expert like Pashupathy say what I’ve been saying about energy storage, that it’s in some key ways where solar was 8–10 years ago. It’s an exciting, nascent, niche, but fast-growing market — we obviously love following it at this stage, and readers seem to love watching its quick transformation as well.
Pashupathy went on to discuss rooftop solar, noting that SunEdison was probably the largest deployer of rooftop solar in the world and it had been doing rooftop solar in India for 6 years. As an electricity provider through PPAs in India, he said they found the business to be “painfully complex.” He added that commercial properties often treated rooftops as valuable real estate, using it for various purposes. He also commented that SunEdison, as a PPA provider around the world, needed to be sure it had access to the roof for 20–25 years in such cases — not exactly something you can count on. That includes needing to transfer the contract if the building changes ownership. In other words, he wasn’t super bullish on rooftop solar in India. He did highlight transmission and efficiency benefits with rooftop solar, but he expected business models built around rooftop solar were a long way off from being strongly viable.
Pashupathy also discussed curtailment risk for wind power in India, but was clear that he didn’t see that as a risk for solar in India.
Interestingly, he also chimed in on electric cars, noting that this transition is going to happen faster than people think as well. Of course, he saw this as a positive sign for the future of the solar market. 😀
Pashupathy indicated that SunEdison’s projection is that $5–6 trillion will be invested in solar in the next 15 years. Addressing questions about how realistic India’s solar and wind power targets, he commented that he thought these targets wouldn’t just be achieved but would be blown away.
After the second round of questions, Pashupathy discussed the experience curve as it related to Moore’s Law and as it relates to solar and solar-quality silicon. He made the case that silicon was the oil of the coming century, and energy security would be about silicon security. He also discussed the process of silicon manufacturing, and how silicon manufacturing has become more economical in recent years.
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