Companies Diversifying into Solar in India – A Review

Solar is Hot. And Many Firms Wish to Strike when the Iron is Hot!



As of end Jun 2016,  the total solar installed capacity in India is about 7.5 GW. This is expected to increase to 100 GW by 2022, a CAGR of slightly over 50% for the next 6 years.

With the solar power sector expected to grow at such a remarkable CAGR for the next 6 years, (and presumably have significant growth rates even beyond that), there is a huge interest among businesses and the corporate sector in India (and from corporates outside India toot) to invest in this sector.

Solar Mango did a review of some of these investments, and we present a summary of our findings.

Our review indicated 10 trends in the context of companies investing in the Indian solar sector.

Related Diversification by Non-solar Firms

  • TREND 1 – Indian Wind Power Firms Diversifying into Solar
  • TREND 2 – Power Equipment Players Adding More Focus to their Solar Efforts
  • TREND 3 – Companies Eyeing Niche Opportunities
  • TREND 4 – Infrastructure Firms Investing in Solar & Wind
  • TREND 5 – Engineering Firms Eyeing Manufacturing & EPC Opportunities in Solar
  • TREND 6 – PSUs Intensifying Solar Focus

Unrelated Diversification

  • TREND 7 – Large Indian Firms Becoming Independent Solar Power Producers
  • TREND 8 – Conglomerates Start Focussing on Solar

Forays by Firms already in Solar Sector

  • TREND 9 – International Solar Firms Eyeing Indian Solar Market
  • TREND 10 – Companies Currently Offering Solar Solutions Extending Offerings through Vertical Integration




Related Diversification by Non-solar Firms




With solar set to overtake wind as the dominant form of renewable energy in India by 2020, large wind energy companies in India such as Gamesa and Suzlon diversified into solar space recently, and plan to invest several hundred million dollars in the next five years. (Source)

On a related note, a number of wind IPPs are also keen on becoming solar IPPs.

This should hardly be a surprise, given that the wind power companies – be they OEMs or IPPs – are highly acquainted with the renewable power sector. And broadly, the dynamics – the drivers and constraints – are similar for the solar and wind power sectors.

Expect every major wind power player to have a medium-large solar play soon, and not just in power generation, but also in some aspects of manufacturing, especially solar inverters.

Some specifics on how some key wind power players are approaching solar.


  • The Spanish wind turbine manufacturer decided to enter into solar last year
  • Gamesa intends to set up 100 MW solar projects that includes solar EPC, rooftop installation and village electrification in this year and 500 MW in the next 5 years
  • They are also planning to enter into the offgrid sector
  • Gamesa’s investment over the next 2 years for solar is expected to be around euros 200 million
  • Mind you, Gamesa would be interested in not just EPC, but presumably also for solar inverters, as a solar inverter is not very different from (and actually a simpler version of) a wind power converter.
  • In this context, ReGen Powertech, a wind OEM major, also has offerings in the solar inverter sector where it offers a high end of solar inverter for utility scale power plants.

Mytrah Energy

  • London’s AIM-listed Mytrah Energy(India) is an IPP with significant exposure to wind farms
  • Mytrah has plans to invest a total of $400 million in setting up its solar business. Now, given that it is a major in wind IPP, it is quite possible that most of their solar plans also revolve around being a prominent IPP in this sector


  • Wind OEM major Suzlon is planning a hybrid model where solar plants will be set up on same land as wind farms
  • This move is intended to save the company from land and evacuation issues
  • Target is to install 500 MW in the next few years
  • The company has acquired Gale Solarfarms, Tornado Solarfarms, Abha Solarfarms, Aalok Solarfarms and Shreyas Solarfarms for an undisclosed sum, in a bid to further its renewable energy project ambitions. (See more)

Other global wind companies that are diversifying into solar


This is a sector for which solar makes most sense.

Remember, a large part of solar is just the same AC power equipment that a number of conventional power plants use – transformers, switch gear, switches, transmission towers, fuses… – you get it. Thus, companies that are supplying any of these are showing significant interest in entering the solar power sector.

Just to jog your memory, many of these traditional electrical and power equipment companies already has/had significant solar plays – Siemens had a solar inverter division not very long back, GE has invested in thin film solar, ABB is already a biggie in the solar inverter play and so is Schneider, and many of the equipment providers are working on the emerging domains within solar power – for instance on the intersection of software, IoT and power generation.

Here’s a snapshot of how Schneider Electric views solar opportunities in India:

  • Schneider Electric India is eyeing a 25-30% growth in its solar business in the next two years.
  • Schneider already has a good share of the business in medium and utility scale solar inverter sector in India.
  • The energy technology company plans to supply equipment for mini and micro grids such as inverters and charge controllers to companies taking up projects to provide electricity in Indian villages.
  • With this, Schneider offers a complete solar power solution, with the exception of solar panels and wires.


Is your firm interested in diversifying into solar? Send a note to Narasimhan, Co-founder, Solar Mango ( )



With the most prominent sectors in solar fast becoming crowded, a good number of companies are also adopting a more strategic approach by going for niche opportunities rather than go for “commodity” or well known opportunities such as putting up solar power plants.

The size and nature of the niches that companies go after depend on the company in question of course, but the good news is, given the industry and opportunity characteristic available in solar (especially solar PV), a large number of companies from diverse fields can identify interesting niches for themselves in the solar energy sector.

In Solar Mango’s opinion, this route is a highly recommended route. Sure, a niche usually does not appear to have a large market size and value, but becoming a dominant player in a niche is relatively easy, and as any business strategist will tell you, dominating a niche is one of the better ways to build a larger empire for the future. (Classic examples are Tesla, Google, and our own homegrown Reliance).

Here’s an example of this trend in how Crompton Greaves and CEA (LITEN) are exploring the solar market potential in India (Source)

  • Avantha Group Company CG and CEA (LITEN) are investigating for a period of 12 months market potential and opportunities for Solar Photovoltaic (PV) system with storage function for Indian airports.
  • LITEN is a major European research institute and a driving force behind the development of the sustainable energy technologies of the future.
  • Potential of over 500 MW of solar PV generation plants exists for Indian airports alone
  • There is no capital investment in the first phase of this collaboration; however, following investigation if found suitable, the companies intend to set up manufacturing facilities using CG’s infrastructure and expertise in India and technology know-how of CEA for commercialising the business opportunity.
  • This agreement is in line with the synergies that the two countries – India & France, are exploring and combines CG’s infrastructure with CEA’s know-how in the field.


Similar to companies in the power sector, companies in the infrastructure sector too are heavily expanding into solar as it is a natural choice for them.

Within solar, the most obvious entry point for most infra firms is the EPC segment – this is also why you find that this segment is highly crowded

With some of the largest infra EPCs such as L&T and Sterling & Wilson already being prominent players in the solar power sector, more companies in this sector are entering the sector.

Here’s a snapshot of how the infra major Adani Enterprises is making a wind energy foray: ( Source)

  • Adani Enterprises, one of India’s leading conglomerates, marked its entry into the wind energy segment this year (April) by placing the company’s first orders for wind turbine generators with Inox Wind Limited.
  • This is a 50 MW turnkey project to be set up in Anantapur district in Andhra Pradesh and a 20 MW turnkey project at Inox Wind’s Lahori site in Madhya Pradesh.
  • Adani is already into solar, thermal and all other power sectors and has commissioned about 10,000 MW in total.


Not surprisingly, solar energy is a hot area of focus for a variety of firms in the engineering and related sectors. In fact, over 20 engineering firms have been in touch with Solar Mango related diversification into solar and we had provided professional assistance to quite a few of those.

Unlike the infra firms that are mainly eyeing the EPC opportunity, the engineering firms are exploring manufacturing avenues as well. While some of the more ambitious among them are eyeing even manufacturing of polysilicon and ingots/wafers (very risky, in Solar Mango’s opinion), a good number of them are eyeing relatively downstream manufacturing opportunities – solar cells, modules, mounting structures, sub-components etc. Some of them are eyeing niche manufacturing opportunities – for instance, one of our clients is keen on dominating the solar water pump sector.

Sectors within engineering that had shown a special interest in solar

  • Metals and metal working firms
  • Automobiles
  • Heavy machinery and machine tool manufacturers
  • Companies that do a significant amount of EPC work along with their engineered products
  • Boilers
  • Material handling equipments
  • Companies in the construction sector, such as cement manufacturing firms

Here’s a snippet of how an engineering firm, auto parts manufacturer JBM diversified into solar in 2015: (Source)

  • JBM group is one of the leading automotive equipment manufacturers and suppliers in India. It announced plans in April 2015 to install 300 MW of solar power capacity over the next 3 years. The company is also planning to expand into wind and biomass-based power generation and expects to start work on non-solar renewable energy business by the end of this year.
  • With these ambitious plans, the company hopes to become an independent power producer, with plans to invest around $250 million into this program. It is eyeing 15% of the total company revenue from renewable energy business over the next 3 years. To set up the renewable energy capacity, the company will invest 30% of the total capital requirement while seek debt financing for the balance 70%.
  • JBM Group has the advantage of being an engineering consultancy firm as well, so it can set up solar power projects itself and also do the same for other companies.


With the government keen on ensuring that its target of 100 GW in solar by 2022 are met, it is going all out to get the PSUs do as much as possible in this direction, both as developer and as companies manufacturing a variety of products and solutions.

Companies such as BHEL and CEL are investing in both power plants as well expanding their existing solar manufacturing facilities. For these firms, solar is not really a diversification, as both of them have been some of the first to start making solar cells in India, but their contribution to the solar cell market so far has been pretty small, and it is quite possible they might wish to up the ante now.

Many other PSUs not directly related to or involved in solar, such as Indian Railways, Coal India (Hmmm…) etc., are mainly looking at becoming solar power plant developers.

As an example, here are some nuggets on what Bharat Electronics plans to do in solar (source)

  • Bharat Electronics – Maker of radar and avionics is a large state-owned military supplier
  • As Govt decided to bring in 49% FDI in defense manufacturing, Bharat Electronics is looking at diversifying into civilian segment due to the expected tight competition in the defense arena from private players
  • They intend to go for large non-defense projects that complement their core strength.
  • They intend to spend Rs 5 billion in solar, smart-city projects and air-traffic management services.


Unrelated Diversification



And now comes…everyone.

Every second Indian company with small money lying in their banks is trying to invest in the solar sector.

One of the largest areas of diversification for these Indian firms is into becoming a solar power producer. If companies are able to get a PPA, it can be seen that is one of the real low-risk investment avenues that also provides reasonably good returns over a long term.

Companies of all hues, colors and sizes are diversifying into solar through this route.

Investment sizes vary, but most of these firms are keen on getting a solar power generation allocation from the central or state auctions, and well, continue getting money hand over fist for the next 25 years. At least that is the plan.

Not to be left behind other large Indian firms, Arcelor Mittal has become a solar power producer too. Here’s a snapshot. (Source)

  • Steel giant Arcelor Mittal plans to build a 500-600 MW solar plant in Karnataka
  • It will be setting up the plant on the same 1,010 hectares of land that was originally acquired for putting up its 6 million tonnes/year steel mill.
  • On a related note, recently, Indian conglomerate Rattan India Power planned to use a 324 hectare site in Punjab, which was originally pegged for a thermal power plant, to build a 200 MW solar PV project.


A number of Indian and multinational conglomerates had been eyeing solar for sometime. Some of them, like the Tata, had already started playing a significant role through their existing divisions related to power and energy. A number of other such conglomerates are also now getting into the solar game.

Some of these large corporates are going beyond just investing in power plants and have ambitions to invest along many other points (including manufacturing) in the Indian solar energy ecosystem. However, from Solar Mango consulting division’s review and analyses of trends, investments in power generation are likely to happen pretty quickly (as quickly as they can get a bankable PPA), but investments in manufacturing could take time, given the differing risk profile for the solar manufacturing sector in India.

This is how the $25 billion multinational conglomerate Hinduja group is planning its entry into the Indian solar power sector (Source)

  • The Hinduja Group, with business interests ranging from power and automobiles to financial services, will be entering the solar power sector in India to develop a generation capacity of 1,000 MW, in phases.
  • This is part of the group’s strategy to execute only short-gestation greenfield opportunities in India, and focus more on acquisitions for growth.
  • This could entail total investments of Rs 5,500-6,000 crore.
  • This is an integral part of the conglomerate’s plan to invest $10 billion in the power and infrastructure space in the country.
  • The group is looking at states like Gujarat, Rajasthan and Andhra Pradesh to set up its solar power generation units.
  • The group is looking for foreign partners with whom it is ready to build manufacturing capabilities in the power sector


Different Forays by Firms Already in Solar Sector



There has been a tremendous influx of investments and market entry from international firms having solar offerings. The largest among these of course has been from solar panel manufacturers and solar inverters. Of late, at Solar Mango Consulting, we have also seen a significant amount of interest in entering the Indian market shown by sub component makers, some of which include panel sub-components such as backsheets and encapsulants, cables and harnesses, connectors and more.

In addition to components and products, there has been a tremendous interest from solution providers as well. I had the opportunity in the last few years to meet and provide some inputs to companies providing solutions for diesel-solar hybrid solar plants, solar power plant monitoring solutions, and some companies specialising on microgrids etc.

Here’s is something about Caterpillar’s interest in the potential in solar-plus-storage-microgrids (Source)

  • Global maker of construction and mining equipment Caterpillar has launched an integrated micro-grid solution which combines solar PV and energy storage with the company’s power generation equipment.
  • Cat Microgrid Technology is available in a range from 10 kW to 100 MW of modular solutions. It can be configured to include thin-film solar panels, Caterpillar generator sets and a selection of energy storage technologies, including ultracapacitors and lithium-ion batteries.
  • Caterpillar microgrid technology is suitable for applications such as telecoms towers, rural electrification, mining and industrial facilities where the systems can use a combination of green energy, storage and backup, most likely in the form of diesel generators, to form complete energy networks.




This is another trend that is gaining ground.

Companies making inverters are keen on integrating into making modules. Companies making modules are keen on also making cells or becoming EPCs. And companies making sub-components for modules are keen on getting into module making (give examples of Swelect, RenewSys…)

I have been giving numerous examples of large firms so far in this post. For a difference, we look at an example of how a relatively smaller firm offering a niche solar solution is expanding into a larger space within solar.

Span Pumps forays into Rooftop Solar EPC – Kalpa Power (Source)

  • Span Pumps Pvt Ltd, a manufacturer of manual and solar operated water pumps, and a 75 crore-turnover company has made a foray into the rooftop solar power generation segment.
  • Venturing into Solar EPC is a natural diversification for Span, as it is already into the solar off-grid sector
  • The new venture will function under a separate entity called ‘Kalpa Power’
  • The regions targeted for the new business are Maharashtra and NCR as these have a good potential for rooftop solar power generation for commercial and industrial use as the power cost is high and the supply is inconsistent
  • The parent company has made an initial investment of about Rs. 6.5 crore in Kalpa Power which currently has a confirmed order book of over 1 MW capacity and is targeting 8 MW in fiscal 2017.


So folks, that’s a rather detailed review of the solar diversification efforts for a diverse list of companies, from both India and international.


SUMMARY – An analyses of the above trends and the examples provide the following as highlights

  • Related diversification – as expected, firms in this category are exploring all possible avenues to diversify into solar, and not just power generation. This is owing to the fact that companies in this category already possess some of the key strengths required to succeed in the many value chain components of the solar power sector
  • Unrelated diversification – again, as expected, firms from this category are mainly eyeing diversification first through the power generation route, which is a fairly commoditized route where the whole turnkey solution is available as a package from the EPC providers and component vendors. Besides, this route is very low risk if they are able to get a strong PPA, something firms that are new to the power sector would like.
  • New forays from existing solar firms –  logically once again, what we see are companies expanding into domains that are concentric to their current activities. Or, where are they are seeking new markets (in the case of international firms) for their current solar offerings.

Other highlights of analyses

  • Most diversification efforts are currently focussed on the low-risk and low-hanging fruit – power generation
  • The next most prominent sector for diversification seems to be as a solution provider, either as pure play EPC or as a turnkey solution provide for specific sectors or offerings (such as microgrids)
  • In the context of manufacturing, while there is significant interest in diversifying into the manufacturing sector as well, there has been little real action on the ground, except in some investments happening in the low-capex module manufacturing sector.
    • While on manufacturing, one domain where some action is happening is in components such as mounting structures, cables etc – in these cases, companies that are already supplying similar products for other industries are quickly rejigging their operations to cater to the solar power sector.

So! These are early days yet for solar power, and hence the diversification efforts being attempted today can only be taken as initial trends. These could change, for instance more in favour of manufacturing, should the government come up with more policies and incentives favorable for long-term growth of solar manufacturing in the country.

Looking at current trends alone: As can be seen, there is interest in, and moves from, a variety of stakeholders looking at a diverse variety of opportunities. While a good percentage of these efforts are directed mainly towards the power generation segment, the details above show that even within this “commodity” segment, a good extent of differentiation is being attempted (microgrids, solar-wind hybrids etc). What we are sure of at Solar Mango as the solar power sector grows is that many more opportunities – beyond just power production – will open up for a wide variety of companies.


Is your firm interested in diversifying into solar? Send a note to Narasimhan, Co-founder, Solar Mango ( )


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