Vikram Solar Plans to Invest $1.5 Billion in US Solar Production

Vikram Solar Plans to Invest $1.5 Billion in US Solar Production

Information about the Kolkata-based Many industry observers was surprised by Vikram Solar’s plans for a manufacturing push in the United States, but it is not as surprising as it appears.

Last week, a new venture backed by one of India’s oldest large-scale solar panel manufacturers announced plans to invest up to $1.5 billion in the US solar market, beginning with a factory in Colorado next year.

VSK Energy LLC, a new company, will build on Vikram Solar’s experience in solar manufacturing and supply chain to build a plant that can compete with imports from China.

The manufacturing story in India has been mixed, peppered with a long period of struggle until Solar finally took off post-2014, and again, due to industrial action issues at its plants. While issues in West Bengal may be understandable to some extent, the Tamil Nadu story has not been smooth for reasons that this article cannot go into at this time.

In India, the company currently has 3.5 GW of module manufacturing capacity. The company also received a 1 GW allocation in India’s Phase 2 PLI scheme for solar manufacturing, one of the smallest among 11 allottees save one.

The significant move to the US, however, brings the company to a market it is familiar with, thanks to years of exporting its made-in-India modules there, as well as other markets in Europe and elsewhere.

VSK is a collaboration between Vikram, based in Kolkata, and two private equity firms based in New York, Phalanx Impact Partners, and Das & Co, an investment and development firm with solar holdings in both the United States and India.

The company plans to start manufacturing modules in Brighton, Colorado, next year. It intends to open a second facility in an undisclosed southern state in the United States in 2025 to manufacture cells, wafers, and ingots. Due to favorable climatic conditions, solar adoption is expected to be much higher in the southern US states. These moves in the United States are undoubtedly influenced by incentives provided by the Biden administration’s Inflation Reduction Act, which is heavily focused on supporting US-based manufacturing.

While the Colorado facility is expected to initially produce 2 gigatonnes (GW) of modules per year, with plans to double that amount later, the plans for the second factory are even bigger, with a potential investment of up to $1.25 billion.

According to Gyanesh Chaudhary, chairman of Vikram Solar, the investment decision was largely influenced by US policies encouraging clean energy manufacturing.

“For us to take this step forward is because of all of the positive policy initiatives by the government and the Biden administration to promote renewable energy,” he was quoted as saying in an interview.

Vikram Solar was a pioneer in solar manufacturing in India when it first opened its doors in 2006. It remains to be seen whether its latest US move will pave the way for other Indian firms.