Competitor Scenario for MW Solar Power Plants

What is the extent of competition present in each of the customer segment of the MW Solar power plant sector? This is an important question to answer for each new entrant, because all else being equal, a segment with less competition is more welcome!

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MW Solar – Competitor Scenario

Stakeholder/Customer Segment Competitor Scenario
Power Purchasers

  • Government utilities
  •  Private companies
  • Captive consumers
  • There is significant competition from large and well-heeled companies when it comes to bidding for government allocations. In fact, the profile of companies getting allocations has changed between 2010 and 2015. In the beginning, there were a number of small companies getting allocations, each for a few MWs. By 2014, a dominant % of allocations were going to a few large companies with the average allocation size increasing to 50+ MWs
  • For the private PPA sector, the market is yet not fully developed, and is still very small. Solar Mango feels that here as well, it could soon be a field where large IPPs and developers will dominate and small companies can fight only in niche sectors
  •   Of course, there is no competition if you are looking to put up a solar power plant for captive consumption. Here, the only aspect you might have to compare is to Own or Buy: Do you wish to put up a solar power plant yourself, or is it a better deal to simply purchase solar power from a third party?
  • So overall, Solar Mango expects only limited opportunities for small and medium enterprises as solar power plant developers

  • Large Independent Power Producers
  • Small Independent Power Plant Developers
  • Developers for Captive Consumption
  • Here, the main players offering services are the EPCs.
  •   Significant competition exists for the EPC segment, but the good news for entrepreneurs is that the competitors are not yet organized for all customer segments
  •    When it comes to catering to large IPPs/developers, the market is quite organized. Be it EPCs, be it companies offering niche expertise or be they component-makers, large IPPs look for established players with brand names to reckon with. Thus, small players will find it difficult to play a direct role here.
  •   But for the small and medium scale developer segments, the EPC competition is fairly unorganized. Many prominent, large EPCs and engineering design firms are not keen to work with the smaller developers owing to their cost structures and overheads.
  •   For the small and small-medium developer segment, outsourcing opportunities are available for entrepreneurs – be they in land procurement, in design, approvals or in construction sub-contracting. Because of the unorganized nature of the market, entrepreneurs who invest in building a brand, have a clear focus on specific regions, and approach the market in a professional manner stand to win handsomely within a short period of time
  • In sectors such as Financing, the need for assistance exists from developers and competition is limited, but these are domains in which only a few entrepreneurs (especially those with an investment banking or private equity background) could add meaningful value

  • Large, National EPCs
  • Medium-scale Regional/ National EPCs
  •  Small, Regional EPCs
Competition for Outsourced Services

  • There is significant scope for small and medium businesses when it comes to providing services to the EPCs. Here too, competition exists, but the competitors are not organized players
  • Be it in land procurement, in design, approvals or in construction sub-contracting, EPCs need specialists to get the work done for them. Entrepreneurs, who are able to build a brand, focus on specific regions, and approach the EPC market in a professional manner could stand to win handsomely within a short period of time. The added benefit is that over a period of time, some of these entrepreneurs could also go up the value chain and offer EPC services on their own
  •  Construction sub-contracting is emerging to be an excellent niche opportunity for smaller companies with a construction background; if they can bring a significant region focus to their offerings and thus can provide more value for the construction part of the solar power plants in their regions, these entrepreneurs could find significant traction with medium and large EPCs for such projects

Competition for Component Supply

  • The other large need for EPCs is component procurement. This need is met largely by incumbent component suppliers. There is reasonable competition for most solar power plant components (panels, inverters etc.), both from domestic and from international (especially Chinese) suppliers

  • Panel manufacturers
  • Inverter & Other Balance of System Manufacturers
  •   One of the key vendor segments for OEMs is the sub-component manufacturers. Here, there is significant competition in most sectors except perhaps solar cells and a few other niche sub-components which are solar-specific
  • Currently, many OEMs do direct sales to large buyers, but at the same time are looking out for resellers and distributors to expand their reach throughout the country and be able to focus on smaller MW scale projects as well
  • Solar Mango strongly recommends this sector for those with a marketing/sales and distribution backgrounds

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