Tata Solar- A Dawn under the Sun

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References . Strategic Recommendations 14. Solar Power in India 5. How Tata Solar Follows Competitive Strategy? 7. Porter’s Five Force Analysis 11. Accounting Information 13.Contents: 1. What is Completive Strategy? 2. Competitors 8. What is Solar Energy? 4. Pest Analysis 10. Various Strategies Followed by Tata Solar 9. Tata Solar SWOT Analysis 12. Tata Power Solar – An Introduction 6. Background 3.

Cost Focus In cost focus a firm seeks a cost advantage in its target segment. According to Michael Porter. A low cost producer must find and exploit all sources of cost advantage. then it will be an above average performer in its industry. They may include the pursuit of economies of scale. The sources of cost advantage are varied and depend on the structure of the industry. . Differentiation Leadership In a differentiation strategy a firm seeks to be unique in its industry along some dimensions that are widely valued by buyers. It selects one or more attributes that many buyers in an industry perceive as important. preferential access to raw materials and other factors. weaknesses. opportunities. The fundamental basis of above average profitability in the long run is sustainable competitive advantage. competitive strategy is devised into 4 types: Cost Leadership In cost leadership. provided it can command prices at or near the industry average. proprietary technology. and uniquely positions itself to meet those needs. A firm's relative position within its industry determines whether a firm's profitability is above or below the industry average. a firm sets out to become the low cost producer in its industry. threats in the industry and then go ahead which would give one a competitive advantage. Before devising a competitive strategy. If a firm can achieve and sustain overall cost leadership. It is rewarded for its uniqueness with a premium price.1. What is Competitive Strategy? Competitive strategies are the method by which you achieve a competitive advantage in the market. Such strategy helps firm to satisfy sufficient consumers and gain popularity. one needs to evaluate all strengths. Cost focus exploits differences in cost behavior in some segments.

Differentiation focus exploits the special needs of buyers in certain segments. The problem is trying to get as many people as possible to recognize the need and to spend their hard earned money on this technology. which makes the production of solar electricity possible. This energy is in the form of solar radiation. Solar energy produces electricity when it is in demand – during the day particularly hot days when air-conditioners drive up electricity demand. 3.Differentiation Focus In differentiation focus a firm seeks differentiation in its target segment. 2.e. increasing population and increased access to power has led to rising demand for power in the country. when sunshine hits the PV cell. cells. PV. What is solar energy? Solar energy is. . It is a clear niche marketing strategy. the photons of light excite the electrons in the cell and cause them to flow. combined with country’s industrialization.”) These cells are made from materials which exhibit the “photovoltaic effect” i. The need for renewable energy is obvious in today’s world. Background India’s strong economic growth. Electricity can be produced directly from photovoltaic. generating electricity. energy provided by the sun. This type of differentiation is made to meet demands of border customers who refrain from purchasing competitors’ products only due to missing of small features. simply. (Photovoltaic literally means “light” and “electric.

an estimated total capacity of 17. Solar radiation over India is 5000trillion KWH/year. clear sunny weather is experienced 250 to 300 days a year.000 MW was installed globally. Major states put together then 979. The exhibit below captures their estimates about solar market in India. the solar power industry has been growing rapidly in recent years. In 2010.4. in most parts of India. which shows that there is a steady growth in the solar market after 2017-22 . Solar power from SPV (Solar Photo Voltaic) system and solar concentrating system is produced in environmental friendly manner. The country receives more than 4kWh/m2 /day.4MWp is the total amount of energy derived in form of solar. Solar Power in India Globally. does not generate any waste or pollution. and meets the energy requirement in domestic sector in decentralized manner quite efficiently. Thus this puts India amongst the highest solar radiation receiving countries of the world.

Growing profitably across the power value chain and allied areas. EPC services for solar power projects and creating innovative solar products. Enable employees and associates to achieve and unleash their full potential to deliver outcomes in a sustainable way. thereby making them our ambassadors. Headquartered in Bangalore. delivering sustainable value to all stakeholders. Driving competitiveness by operating our businesses at benchmark levels. Practicing ‘Leadership with Care’ by pursuing best practices on Care for our Environment. Tata Power Solar operates in three distinct segments – cutting-edge manufacturing.5. Community. Mission: To earn affection of customers by delivering superior experience and value. is one of the pioneering solar manufacturers in the world and India's largest specialized EPC player. Being the lead adopter of technology with a spirit of pioneering and calculated risk taking. Executing projects safely with predictable benchmark quality. Customers. Tata Solar Power – An Introduction Tata Power Solar is India’s largest integrated solar company that is driven by the singular vision – harness the power of sun to enable solar everywhere. . in focus geographies. cost and time. Shareholders. The company has more tha118% growth in 2104 as compared to 2013.Vision and Mission Vision: To be the most admired and responsible Integrated Power Company with international footprint. People and creating a culture that will reinforce our values. Tata Solar Power. Tata Power Solar with 25 years of deep domain expertise.

And Solar Water Heating (SWH) applications could be used in residential. Residential Rooftops and Utility Scale Solar power (CSP and PV). solar power is already cost competitive with alternatives in certain applications. It is expected that high-end residential consumers will be proactive in adopting solar rooftop given their higher power tariffs. The solar energy is converted in to electricity by using a photo voltaic array. However. branding and user experience that enables it to reach the Indian common man.6. Solar Powered Agricultural Pump sets and Solar powered Telecom towers. telecom towers are an attractive market for solar PV installations. commercial as well as industrial sectors . but combines this broad scope with a differentiation strategy based on design. Solar water pumping system works on power generated using solar photovoltaic system. Consumer categories: -Domestic -Agricultural Solar powered equipment is more environmentally friendly and economical in its operation compared to equipment’s powered by an internal combustion engine (ICE) or nuclear power. In the off-grid space. A large number of these consumers are likely to start adopting solar power from 2017-18. according to KPMG report. Solar Market Segment: -Grid Connected Solar Potential -Off-Grid Connected Solar Application Potential -Solar Water Heater (SWH) Grid Connected Solar Potential includes. The residential consumer category contributes to about 29 percent of the total Indian Power requirement. How Tata Solar Follows Competitive Strategy? Tata Solar targets the mass market with its products. this is expected to increase to 34 percent by 2021-22. The current strategic goals of Tata Solar are market diversification and operations expansion. government involvement will be required in encouraging non-high-end residential and agriculture consumers to use solar power. For irrigation and drinking water solar PV water pumping systems are used in India. For example. Tata Solar has a generic cost leadership and product differentiation strategy in the solar energy industry. And Off-grid connected Solar Application Potential includes.

Product Innovations Tata Solar product portfolio embraces more than 60 models today. every home today is facing at least one of these challenges. Tata have helped countless businesses benefit from these policies while attaining their sustainability goals for the past 25 years. Solar Projects with Power Producers Tata Power Solar can design a fully integrated and customized solar power plant project for you. affordable and green Solutions for Business Tata Power Solar. Focus on both domestic and international markets. Programs with governments Partnering with multiple government and non-profit agencies. Refineries. Industry leaders trust Tata Power Solar. Tata Solar Dynamo roof top solar power generators Product Differentiation Tata Solar reaches Indian mass and industries by launching new and innovative products since inception. Meet Solar RPO & REC regulations. It has many first to its credit like Solutions for Consumers Solution for Consumers Power cuts. A promise of No CAPEX and a low OPEX. Government Funded Projects to start new plant and to increase market share. Customized systems for unique challenges. Nearly 75% of sales is achieved from exports to Europe and USA. We have the prowess to manage solar energy projects of such scale and the much-needed know-how to work within the confines of regulatory policies or the geography constraints. Ports. no electricity at all. in some cases. we are at the forefront of this mission – provide sustainable solar solutions. Profit from power. rising bills and.Turnkey solar solutions. it is essential to increase production capacity. lowincome homes and isolated regions across India. ranging from Rooftops to solar pumps. our pursuit to enable solar continues like. we have developed an array of solar lighting. heating and power backup products that are reliable.Tata Solar Objectives Focus on retail customers in metros. From big cities to remote villages. . Tata Power Solar has played a pivotal role in making electricity accessible in off-grid villages. Sunjevini a power converter that charge your converter with solar energy. At Tata Power Solar.

For the B2C model.schools. Many companies with large roofs Reduce electricity costs Contribute to carbon emission reduction Take advantage of other incentives Increase value of property Reduce electricity costs Comply with carbon emission targets Reduce electricity costs Display corporate social responsibility Gain emission credits Sell electricity Sell carbon emission allowances Land Owners / Project Developers Electricity Companies Motivation Big companies. higher margins up to 15 per cent were offered to the dealers. Many councils who own buildings with large roofs . often globally operating. both on-grid and off-grid solar projects and residential. which was higher than the industry average of 6 per cent to 10 per . it requires a vision. a pioneer of the solar industry offers a broad range of photovoltaic solar modules that feature high efficiency and best-in-class manufacturing edge. our broad range of solar energy panels and modules are among the top tier PV panels available to multiple customer segments including industrial.Globally Trusted Module Tata Power Solar. Target Markets Who? House Owners Councils Corporations Where are they? How many? Millions of domestic roofs and developers / architects of new buildings. commercial. Achieving supply chain superiority or excellence is within the reach of any company. However. admin buildings etc. Price and Promotion Tata Solar has shown strength in another significant aspect that is distribution network. as well as the organizational imperative and willingness to invest in the right direction. Consumer Spread energy mix Comply with regulation Would otherwise have to buy carbon emission credits (in the EU) Use solar powered lights or charges instead of oil lamps (especially in developing countries or remote areas) Use solar powered products for novelty val Tata Solar Distribution Networks Apart from the Product. With an in-house production capacity of 200 MW for modules and 180 MW for cells.

cent. inverters. Thus. Competitors * Azure Power * Bharat Electronics Limited (BEL) * Bharat Heavy Electricals Ltd. necessary construction equipment. In B2B model. (CEL) * HHV Solar Technologies Private Limited * Micro Sun Tech Private Limited * Moser Baer India Limited * Photon Solar Energy Systems * Punj Lloyd Delta Renewables * Reliance Industries Solar Group * Renewable Energy Systems Limited * Solar Semiconductor * Sun Energy Systems * TATA BP Solar India Limited * Titan Energy Systems Limited * Titan Energy Systems Ltd. tally it up. Price Give the customer a detailed accounting of all equipment and service fees. and come up with a total. the target market of professionals was reached. transformers. and warranty info to better inform the client of what they are buying. This helped them penetrate the market deeper into the urban markets. and installers. (BHEL) * Central Electronics Ltd. This total is usually pretty high. In the proposal include all the equipment needed. 7. Use marketing to . Various Strategies Followed by Tata Solar Products Goods: panels. * TRA International * Waaree Energies Private Limited * Webel SL Energy Systems Ltd. spec sheets. * XL Telecom & Energy Limited 8. Perform maintenance at no charge if anything breaks. engineers. tie ups with major corporate houses saved the margins of the distributors and Tata Solar could provide the corporate houses a lesser price than the market. Services and ideas: have expert and experienced salespeople. where corporate selling was involved. Perform analysis of the property and financial implications of the purchase.

rather than a huge expense. Place Salespeople need to be available to travel to the individual sites to perform the analysis. TV.Transphorm Partners With Tata Power Solar to Introduce India’s Most Efficient Solar Inverter.DuPont is collaborating with Tata Power Solar to provide a safer. more efficient. Give them immediate feedback.get the client to think of the purchase as an investment. Informs the public of the benefits of solar without having to spend money on advertising. Manipal varsity unveil solar car prototype . Public Relations: media is constantly reporting about new developments in the renewable energy industry. Solar Panels are complex and customized.Tata Power Solar.Tata Solar working on Indo-China partnership for solar energy . . Meet face to face with the potential buyer to understand their goals and resources. Tata Solar Collaborations . Sales Promotions: Direct marketing: uses direct communication to generate a response in the form of an order or a request for further information. . named Project Disha. anything to get your message across Personal Selling: very important. billboards. radio. to reach out to customers across the country and overseas Advertising: newspaper. and go wherever they need to close the sale. where the electricity supply is unreliable. Promotion Tata BP Solar has embarked on an extensive retail distribution network. reliable and cost-effective alternative to kerosene lamps for home lighting in areas such as Uttar Pradesh.

Economical In the recent round of reverse auctioning process for the solar projects under the National Solar Mission.76/ kWh for solar PV projects. the negative impact and contribution to climate change from burning fossil fuels and deforestation. companies engaged in R&D in solar power are also offered several subsidies and tax exemptions. Technical Technological developments and investments catalyze the advancement of technology. IREDA has come up with several schemes to not only encourage the use of solar-powered systems.59/ kWh to INR 12. The budgets has also encouraged private solar companies by reducing customs duty on solar panels by 5% and exempting excise duty on solar photovoltaic panels. It Political regulates the market through MNRE (Ministry of Renewable Energy) and financial assistance is provided by IREDA (Indian Renewable Energy Development Agency Limited). strengthen the ability of energy consumers to harness solar energy. The government has initiated a Renewable Energy Certificate (REC) scheme. but also facilitate businesses in the arena. and the impact of global warming on biodiversity. the price discovery for levelized tariff was in the range of INR 10. Social There are two overall forces in the social environment that are influencing the growth of the renewable energy industry: increasing environmental concerns and increasing energy demand. setup. improved manufacturing techniques. In addition to emerging technology. . have led to increasing environmental concerns. and improve manufacturing equipment and techniques that enable low cost production. nanotechnology. Growing environmental awareness which is defined as the increasing knowledge and understanding of the finite nature of many of the world’s resources. and the stability of delicate ecosystems. and improving concentrating solar power systems. which is designed to drive investment in low-carbon energy projects.9.24/kWh for solar-thermal and between INR 10. Tata Solar PEST Analysis PEST Analysis The government has huge presence in the Solar Energy market. future technology being aggressively pursued by research and development include thermal and electrical storage systems. solar hybrid lighting. (MNRE) provided financial assistance to the installation of around 33 grids of solar photovoltaic power plants.49/kWh to INR 12.

etc. But for the non-high end residential consumers’ government’s role will be important.e. Tata Solar Porters 5 forces Analysis Suppliers Power: Solar technology has oligopoly characteristics dominated by a small number of players. only a small part of residential segment i. The time taken to reach grid party would also depend on the bargaining power of the developers. Since the awareness in the market is very low. like rural. agriculture. -High switching costs for the firm in the industry is high. but then with government intervention and rising awareness the price of solar energy is coming down. hospitals.10. Degree of influence exerted over the industry by the suppliers: -Product is unique and scarce. since the consumers are price sensitive -Consumers are demanding in terms of value-added. Buyers Power: The industry’s major power lies within the buyers’ side. Degree of influence exerted over the industry by the buyers: -Forcing down the prices. higher quality -Low switching costs for the buyers -Substitute products are available . The product is critical for the company. high end residential consumers is the pro-active group. -Suppliers are more concentrated in the European market because of better technology. There is no substitute product for solar. hotels. The Suppliers of the solar energy supplies also too many industries.

Since the solar prices are coming down and the support from the government will be the major driver in this regard. Moser Baer. Mahindra. are: -There are many substitute products available -Customers’ switching cost is low as they can easily switch over to them as there price is less. BHEL. The substitute i.e.e. -Switching cost for the consumers for the conventional market is low. mitigate 2.Threat of New Entrance: The threat of new entrance is not that prominent now but it will be high as soon as grid parity is reached. like Reliance. -Some prominent companies in the solar market. are: -Market is crowded with indirect competition from indirect competition but with some direct competition. companies dealing in conventional residential pump it is very high. Threat of substitute product: Another prominent power in the industry is the threat of substitute. conventional sources of energy are already present in the market and it is dominated by them. -Product is not differentiated. -Government policy makes the entry barrier lower but after the grid parity it is expected to go down. -The technology is not protected. Now the segment has high entry barrier but not very low exit barrier so the segment is attractive. The exit barrier is expected to go down after the grid parity is reached. Industry Rivalry: The intensity of rivalry from the direct competition i. companies dealing in solar equipment. Degree of influence exerted over the industry by the threat of new entrance.e. Investment opportunities across the value chain from manufacturing to EPC to project development over the next decade.5 bn of imports). etc. . whose brand image is much higher. -The major barrier to entry is the distribution channel. Degree of influence exerted over the industry by the threat of substitute product. The imperative for action today is strong and therefore is the case for persistence and consistency on part of the Government. is low but from the indirect competition i. For the industry. Degree of influence exerted over the industry by the industry rivalry. are: -Low scale of economies before the grid parity. this represents a significant investment opportunity. Solar power has tremendous potential to meet almost 7 percent of our power needs by 2022.6 percent of our carbon emissions in that year and save over 71 MTPA of imported coal in that year (equal to USD 5.

Beneficiary of major Solar lighting system schemes Warranty of upto 5 years is a major benefit Manufacturing plant based in the country Huge supply network and service facilities. Opportunity Existing supplier network be strengthened. Supply from Tata subsidiaries for component could improve margins To expand its product mix. Present systems utility limited to lighting and heating. Use of its R & D Centre’s for development of newer cheaper products.11. High cost of the product. Newer and bigger entrants like Philips entering the solar lighting system market . biogas is another cheaper option compared to solar water heating systems. Tata Solar SWOT Analysis SWOT Analysis Strength First established manufacturer in the country. Products limited for indoor use mostly Poor efficiency of the solar panels as compared to competitor products. Quality of the products manufactured is durable Weakness Limited portability of products available. Threats Chinese solar lighting products providing cheaper alternatives For water heating. Portable product market yet to be tapped.

Financial Performance and Sales: .12.

i. This refers to the point when the cost of the solar power equals the cost of conventional power. used to track the sun movement – improve 20% solar power 5. In the exhibit below. Increase the plant capacity to cater market demand. 6. Promote Single Axis Tracking System technology. the difference between cost and price (includes margins across the value chain). Strategic Recommendations The key driver of the growth of this sector is the concept of Grid Parity. And India will reach its grid parity by 2019-20. 2. 7.13. Cost reduction is achievement of economies of scale 8. Company to reach out to as many people and organizations as possible to through different marketing media. . In order to meet the rapidly growing electricity requirements in coming years. 4. It is expected that the solar tariff to lie anywhere within this band depending on the bargaining power of the developers. Invest in R&D for cost effective technologies and increase the segment – like developing the Solar Water Purifiers.e. The band variation signifies the margins. Improve the cell efficiency and production cost. Tata Solar have to focus on following:1. Emergence of low cost manufacturing locations. 3. it shows a band representing solar rooftop costs. Technological advancements 9. Promote low cost solution to convert existing inverters to solar. 4. MNRE (Ministry of Renewable Energy) 8. Google finance 6.renewableenergyworld. moneycontrol. IREDA (Indian Renewable Energy Development Agency Limited).com 3. 5. www. www. . References 1. www. bridgetoindia.14. Mercom Communications India 7.