Tata-BP Solar to invest $300mn to reach 300 MW

Tata-BP Solar is the grand-daddy of solar photovoltaics manufacturing in India. In a major ramp-up strategy announced yesterday, Tata-BP outlined plans to retain their pole position in the solar space in India.

Set-up in 1991, as a 51-49 JV between BP Solar and Tata Power, their Bangalore solar cell plant currently has a capacity of 52 MW. The initial phase of the ramp-up will see an investment of $100mn in proportion of the stake in the JV by BP Solar and Tata Power. This investment will see an increase in plant capacity to 128 MW in the next 20 months. A subsequent investment will increase the capacity to 300 MW by 2010.

We have seen a spate of investments in PV manufacturing in India including Moser Baer PV's 250 MW thin film plant and Solar Semiconductor's 50 MW plant (with a potential to ramp up to 100MW). Tata-BP seemed to be spurred by these developments going by this statement from BP Solar president and CEO Lee Edwards: "This investment (USD 100 million) is part of the roadmap laid out to ensure that the firm retains its number one position in the Indian subcontinent". In the longer-term the company expects to export about 60% of the produced modules.

So how does the Tata-BP ambition compare with MBPV and Solar Semiconductor?

Tata Power is backed by one of the oldest, biggest and most dynamic corporate groups in India. BP Solar is backed by one of the top 5 global petroleum firms, and BP has loudly declared its strategy in the energy space by changing its tag line to "Beyond Petroleum". In terms of size and "lineage" therefore Tata-BP is a giant against up-starts in its space. But dont count the new kids out yet.

One potential stumbling block for Tata-BP is BP Solar's adamant loyalty to silicon-based PV, while more and more PV gurus are increasingly putting their weight behind thin-film. Both points have their merits, but currently more experts are in favor of thin-film. The new companies would be equally adept in both technologies - thin-film and silicon crystalline.

A great leveller would be the increasingly important role played by financial institutions today, as demonstrated in Tata Steel's takeover of Corus, a company many times it own size. What this means is that if the smaller companies can convince financial institutions that they have a great product/idea/plan, the financial edge of their giant competitors would be rather blunted.

One thing is for sure though: there are exciting times ahead in the solar space in India.