Land-rich Suzlon Energy looking at EPC contracts in solar power segment

Suzlon Energy is eyeing engineering, procurement and construction business in the solar power segment.

It’s a plan the company had evolved six years ago, but shelved later due to various reasons.

Speaking at the India Economic Summit in New Delhi in November 2008, Suzlon’s Chairman and Managing Director Tulsi Tanti had said the company was interested in building solar plants for others — just as it does windmills.

A lot happened in the past six years. While the cost of putting up solar photovoltaic plants dropped steeply — from $3 to 60 cents per panel space needed to produce a watt of energy — Suzlon’s fortunes dropped, too, after its acquisition of German company REPower for $1 billion, just before the global economy collapsed.

Now, Suzlon’s finances are getting back in shape, thanks to a major restructuring exercise.

Under the exercise, the company is selling chunks of its business to its European subsidiary Senvion (formerly REPower) and paying off debts with the proceeds. (Alongside, the profit-making Senvion will raise €500 million by selling bonds and another wad of cash by selling shares.)

Net profits, Tanti has said in statements, are visible in two quarters.

Therefore, the time has come to revive solar plans. Sources in Suzlon have told BusinessLine the company has enough land-plus-transmission infrastructure to support creation of 80-100 MW of solar PV capacity. Land for another 300 MW can be quickly mobilised, as the company has ‘agreements to sell’ in place.

Suzlon’s intention is to build solar power plants and sell parcels of them to investors.

Today, it costs around ₹7 crore to create 1 MW of solar PV capacity.

Thanks to global emphasis on green power, there has emerged a crop of renewable energy companies. These ‘independent power producers’ would like to have in their portfolio all kinds of renewable power, mainly wind and solar. Suzlon wants to put both on the offer platter.