Decoding The Reliance Gambit In Renewable Energy

Highlights :

  • It’s all on schedule for Reliance Industries solar and clean energy foray so far.
  • What more can we expect based on the progress so far?
Decoding The Reliance Gambit In Renewable Energy

It All Started in 2017

It was on the firm’s 40th anniversary celebrations in 2017 that Mukesh Ambani, Chairman, Reliance Industries first asked the rhetorical question, “Can Reliance become a clean energy company?”. “Why Not?”, he answered it himself at the time, without getting into any further details. Almost three years later, at the firm’s 43rd AGM in June 2020, he announced plans to be net carbon zero. You wouldn’t have blamed the few skeptics who assumed he was just following the herd, as global oil and gas majors had started handing out their own net zero targets. But the Reliance target stood out for its audacity. Net Zero by 2035. When almost every oil major bigger than Reliance was still sticking to 2050. One might quibble over the finer details, but the date still stuck home, and indicated a serious plan in the works.

Renewable Energy industry

Cue to the 44th AGM on June 24, 2021. Ambani finally offered the outlines of his plan. In an announcement that made an immediate impact, the firm announced plans to invest $10 billion (Rs 75,000 Crores) in the next three years into clean energy. With solar getting the lions share of attention and investments. Announcing the commencement of work on developing the Dhirubhai Ambani Green Energy Giga Complex on 5,000 acres in Jamnagar, Ambani said that ” Reliance will build solar manufacturing units, a battery factory for energy storage, a fuel cell-making factory and an electrolyser unit to produce green hydrogen as a part of the business”.

Plans were shared to build four Giga Factories to manufacture and integrate all critical components of the New Energy ecosystem as seen by the firm– solar photovoltaic module factory, energy storage battery factory, electrolyser factory, fuel cell factory. The big difference? The extra focus on Green Hydrogen, and perhaps a relegation of plans to develop carbon capture and storage technologies to the background for now. Interestingly, the firm had specifically mentioned `15,000 crore of the planned investment for investments in value chain, partnerships and future technologies, including upstream and downstream industries. These would also include a dedicated Renewable Energy Project Management and Construction Division, besides a dedicated Renewable Energy Project Finance Division.

“With these new initiatives, Reliance will put Gujarat and India on world solar and hydrogen map. All our products will proudly proclaim ‘Made in India, by India, for India and for the world,” he said.

Plans Set In Motion

Less than 4 months since the announcements, the firm has moved quickly, to establish the broad contours of its clean energy plan, as promised. So far, while work continues at the Giga complex in Jamnagar, all the attention has been taken up by 5 key moves the firm made. First, a $50 million (Rs 375 crore) investment into Ambri Inc, a US based firm working on a new, liquid metal, low cost battery that it hopes to deploy for large energy storage projects. Announced in August, Reliance, through its specially created subsidiary, Reliance New Energy Solar Private Limited (RNESPL), joined other key investors including Bill Gates, that helped Ambri close a $144 million round.

If the $50 million investment into Ambri seems small, there was nothing small about the next major announcement .

The culmination of discussions that were rumoured to be on for over 6 months, on Sunday, October 10, Reliance, again through RNESPL, announced the acquisition of REC Solar Holdings AS (REC Group) from China National Bluestar (Group) Co. Ltd for an enterprise value of $771 million (Rs 5780 crore) . With a total manufacturing capacity of 1.8 GW of modules finally, REC has three factories— two in Norway that make polysilicon (the precursor to ingots, then wafers and finally cells and modules), and one in Singapore to make cells and modules. (See Note at the end of story-WHY HJT?)

In a statement following the announcement, Reliance stated that “REC was the first to introduce half-cut passivated emitter and rear cell technology, which is adopted by all major manufacturers today, while REC has moved on to its next-generation heterojunction tech,”. The firm made it clear that it plans to use this industry leading technology from the 25 year old REC group in its fully integrated, metallic silicon to PV panel manufacturing giga factory at the Dhirubhai Ambani Green Energy Giga Complex, Jamnagar, initially starting with 4GW per annum capacity and eventually growing to 10GW per annum. Besides its technology, REC Group already has a strong presence in India in the rooftop and commercial segments. The somewhat pricey (typically selling at a premium of upto 20% over many existing Chinese offerings) brand is also well respected among the installer community for both its quality and other critical aspects like a longer warranty and service support.

Even before the news of the REC acquisition made it to media headlines, the next announcement, made within 2 hours, followed. The acquisition of a 40% stake in Sterling and Wilson Solar Limited, (SWSL), one of the biggest EPC success stories from India in solar, for Rs 2850 crores. SWSL with a global presence and experience in the solar sector especially, offers Reliance the Project management and Construction division that was always part of its announced plans. The SWSL acquisition, involving purchase of a 40% stake in the firm from its embattled promoters at Rs 375 per share, can be considered a bargain buy, if recovery pans out as planned for the firm. Remember, the same firm had a successful IPO back in August 2018 at a price of Rs 780. Two days later on October 12 came the announcement of a 25-million Euro ($29 million or Rs 215 crore) investment into NexWafe, a German firm which has developed ‘green’ solar wafers, the precursor to cell and module manufacturing. NexWafe is developing and producing monocrystalline silicon wafers grown directly from inexpensive raw materials, going directly from the gas phase to finished wafers. This proprietary process obviates the need for costly and energy intensive intermediate steps such as polysilicon production and ingot pulling on which traditional wafer manufacturing relies. NexWafe uses in-line manufacturing, both for the formation of an initial release layer as well as for epitaxial deposition of silicon in an atmospheric chemical vapor deposition process. NexWafe’s unique patented technology is expected to drastically cut wafer production costs, making solar photovoltaics the lowest-cost form of renewable energy available.

Finally, and it’s fifth announcement, Reliance has entered into a partnership with Danish firm Stiesdal A/S. The firm has been working on developing Hydrogen Electrolysers. These are the final, critical part of the chain to produce green hydrogen, with energy for the electrolysers coming from renewable sources. No funding details were shared about the deal. However, speaking at the fourth assembly of the International Solar Alliance recently, Madhukar Garg, President, Refining and Petrochem R&D Reliance confirmed plans to use 3 GW of solar power to generate 400,000 tonnes of Hydrogen at the proposed electrolyser facility.

Thus, after taking into account future commitments to Nexwafe, Reliance is still left with Rs 5500 crores of its planned investment into technology acquisition, partnerships and the value chain. The only missing parts, based on the firm’s earlier announcements? Fuel cell technology, and possibly a clean energy financing vehicle.

While the fuel cell technology is an area where the firm will no doubt be considering options possibly, it is the area of clean energy financing that could be the surprise move from the firm. India still doesn’t have any significant clean energy focused financing firm, especially at retail and corporate financing levels. Government firms with a mandate to finance clean energy like IREDA, focus on large, utility scale projects or projects where they are advancing funds purely on the basis of the borrowers credentials. All this, even as the clean energy financing market is on a tear, worldwide. In the US market for instance, Goodleap, a firm specialising in financing sustainable home upgrades as it calls it, has seen its valuation go upto $12 billion, after a recent $800 million fund raise. Development of a carbon finance and credits market will possibly open up the kind of scale and opportunities that Reliance thrives on.

The Playbook

The Reliance approach is already very different from that taken by other global energy majors. Most have gone with high investments into energy generation, be it solar, offshore wind, or even Hydrogen now. Reliance, by going with a manufacturing led approach, has already taken the path less trodden. So far, there are three clear takeaways:

While Make in India is integral, in keeping with its own philosophy, and the support and scale it finally sees in India for clean energy solutions, the global markets are a must too. REC’s HJT modules, for long seen as the IPhone of modules could now see serious scale and a larger market in the future. REC Group took it beyond the residential segment in the US to more niche segments elsewhere. As an industry observer told us, now there is every possibility that HJT modules from them will seek niche customers in every segment, including the hitherto ignored utility segments.

In case of partnerships Reliance has gone with exclusive rights for building or selling the product in India and nearby markets, as seen for its deals with Ambri, NexWafe or even Stiesdal. Thus, be it battery storage, or Green Hydrogen eventually, the firm will hope that it has made a bright start on the path to easy technology access for each. It’s largest deals so far, the REC Group buyout and Sterling and Wilson Solar buys, have simply made it clear that global scale will always be in the picture. While REC offers it both the cutting edge technology to target global markets, the Sterling and Wilson Solar deal offers it the kind of global expertise and supply chain familiarity with not just solar parks, but many other areas where SWSL has won projects. Be it Data Centres, or waste to energy. Reliance’s own captive requirements too will be huge, as big, if not bigger than any project SWSL has executed so far.

Reliance is one of the 4 bidders in the solar PLI scheme to have bid for 4 GW capacity covering all 4 stages of manufacturing, from polysilicon to wafers to cells and modules. That increases the odds of its winning significantly, especially with the modern Heterojunction Technology it has access to courtesy the REC Group buy.

One of the most interesting aspects that is noticeable is how Reliance seems to have stayed away from the solar energy developer or generation market so far, preferring to focus on manufacturing, especially in solar. Speculation on the rivalry with the current leader in renewable energy, the Adani Group, or the Tata’ group firm Tata Power, is possibly too early in that context, as both Adani and Tata Power, despite having a significant manufacturing capacity in place and plans to expand further, seem more focused on being on the developer side of the business and generating solar power to sell. Adani in fact has been snapping up renewable energy assets for some time now, notably the $3.5 billion buyout of SB Energy’s portfolio of almost 5 GW. Tata Power on the other hand, has preferred to take the organic route, focusing on a national footprint for rooftop solar installations, as well as its own projects.


Name Existing Module
Vikram Solar 2.5 GW
Waaree Energies 2.0 GW
Adani Solar 1.5 GW
Tata Power 0.6 GW

Top Manufacturers + Developers. Pure Play Developers Like Renew Power, Azure Power also have plans to get into manufacturing. Other key manufacturers like Premier Energies, Renewsys India, Goldi Solar and Emmvee Photovoltaic are all sub 1 GW for now, and focused on manufacturing only.


The Missing Piece/s

Fuel Cell technology and Finance. We expect the firm to make its move for these two final pieces in due course. While Fuel cell technology offers enough global partnership options, it is the financing option which should be very interesting to watch, as Reliance is unlikely to need any foreign partner or specialised inputs here. So while its stated goal is to have a renewable energy project finance division,


expanding that definition to cover, say, rooftop solar projects at residential level is not a stretch of imagination. There are established US models to learn from, as well as a domestic market that offers both scale and growth, the two must haves for any project the firm gets itself into. Add to that its access to low cost funding as well as own healthy cashflows, and a push into financing seems to make more sense than ever for Reliance.

Solar financing in India has been hobbled by the usual problems, and some more. Be it the high initial project cost, lack of information on performance and output, or even considerations of recourse should a buyer/user default, financial institutions have typically been very wary of investing too much here. Thus, installers here in India rarely offer financing as part of their suite of offerings, except for a very few that have raised some initial capital to test the market. The huge underperformance of the rooftop solar market has been attributed to this, among many other reasons. India has currently achieved less than 20% of its 40 GW target for rooftop solar, that was set for 2022 end. All this, when the economics of solar power today are truly on solid ground, with payback possible in 5-8 years, depending on the nature of the project and location. With dropping storage costs, the role of financing will only grow larger, and opens up a significant opportunity for Reliance, besides other players hopefully. Full segments like micro grids have been hobbled by lack of financing, which could change soon.

A Reliance backed initiative in financing would do as much to shake up and move the market ahead, as the simple act of the firm’s entry into clean energy did.



When news first started going around in May-June this year about the interest of Reliance in HJT technology, or Heterojunction Technology to give it its full name, it wasn’t such a big surprise. Unlike the reigning standard, Mono PERC, which dominates market share right now, HJT is seen as one of the two most promising options, besides TOPCon (Tunnel oxide passivated contact (TOPCon) technology). However, in both Mono PERC and TOPcon, Chinese dominance looks impregnable, thanks to the vast scale and manufacturing innovation pipelines key Chinese manufacturers have developed over the past decade. And the fact that upgrading from MonoPERC to TOPcon is a far more easier task than moving to HJT from a MonoPERC line.HJT, where key technology providers include Meyer Burger, a Swiss engineering firm, offers a break from Chinese dominance. While the original technology involves placing a crystalline silicon cell between two layers of thin-film silicon, it is Meyer Burger’s patented smart wire technology that has brought in a level of efficiency and promise that makes it a real contender for the future. Its higher efficiency potential means more efficient modules, and fewer area required for the same output. REC Group, as one of the early majors to bet on HJT, offers somewhat of a head start, having already sold modules based on the technology in the many markets it operates in. It’s Alpha Series 60-cell module with HJT is already being sold to select clients worldwide.Importantly, the HJT manufacturing process requires fewer steps (4) than Mono PERC (7), making it potentially lower cost and more efficient at scale. Backers add that a lower temperature coefficient also means that it has higher energy output over longer periods, making its own case for buyers looking to own and run their plants.Finally, unlike upgrading from MonoPERC to say, TOPcon, upgrading to an HJT line is not so simple, giving manufacturers breathing space should the technology prove to be superior at scale, as Chinese manufacturers seem to be more committed to Mono Perc (existing) and TOPcon (Future) technologies for now. As an insider added, most new greenfield manufacturing plants could be HJT, while brownfield upgrades would involve MonoPERC to TOPcon.”


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