Solar energy heating up new firms in Pune
Solar Energy has emerged high on the horizon as the next big thing to change the way we spew carbon. Safe, free and all there to harvest. While the past was riddled with several constraints in terms of cost of photo voltaic panels, things have changed now. Not only are these PV panels cheaper to manufacture they have also become more efficient (they now harvest from 16 to 21.5 percentage of solar power)
Add to this the Government’s pro-solar policies and solar makes a lot of business sense. As it did to Swati Bhagwat of Bhagwat Energy.
“Earlier my husband used to manufacture solar water heaters. But three years ago we saw the opportunities that solar power presented and decided to venture into that. We set up our first project of 40 MW in Mumbai only recently.”
Though there are a lot of players who have entered the field, setting up a solar company is not as it seems. Says Shivhar Mendkule of Saururja, “the biggest issues we had to tackle was the Government registrations and approvals. They have different practices and it makes things difficult for a start up or actually, anybody.
For Sunshot it was lack of experience. Says Rahul Dasari one of the founding members, “When we started, our major problem was that none of us had any prior experience in this field. And of course not much capital. So we did what we could do best in the given circumstances. We read up as much as possible in the field of renewable energy. Then we picked up small consultancies. These paid us very poorly; in fact they didn’t even cover the cost, but we still did them. It helped us gain the all important experience that we were looking for. We did about eight to 12 such consulting jobs.”
For Bhagwat the reverse was true. They started out with solar water heating systems and then slowly grew to Photo Voltaic (PV) panels. Says Swati, “Our business has grown with the changing scenarios. First we would supply solar heaters that the government had made mandatory for all new buildings. With that we had established relations with the local builders. Then came solar energy but since that was dependant on batteries that made projects unviable, things did not work out. Now, the government has introduced this net metering system where you can pass on the power you generate onto the grid, we saw opportunity and set up our own PV manufacturing plant in addition to doing installations.”
Solar Energy is a capital intensive initiative. To set up a solar plant one needs to invest heavily and that can be seen as an obstacle to many businesses. “But” says Rahul, “that is not really true. Let me explain. If you want to set up a 1MW solar plant the cost approximately is ₹5 crore. Thanks to the government, you get accelerated depreciation of 60% in the first year and 40% in the next year. In addition to that you get ₹1.2 to ₹1.3 income tax benefit.
“A 1MW unit will generate approximately 15 lakh units a year. Multiply this with the cost of power ₹9 to ₹10 for industries and ₹15 for malls and you save ₹1.35 (industries calculation) per year. So in three years your solar plant has been paid for.”
Despite this cost plays a big role in getting contracts. Says Swati, “in the manufacturing space we are competing with a giant, Vikram Solar but though their PV panels are cheaper than ours, our installation cost is cheaper than theirs. Add to this the fact that we are personally present at all our sites and we win.”
For a start up, attracting talent is a big headache. Says Shivhar Mendkule of Saururja, “Luckily for us all of our directors are technical people. I am an MTech; our technical director Avinash Chinmaygabe has an MS in Renewable Energy from the UK. Ninety per cent of our team is tech people.”
For Sunshot, after crossing the self-learning curve, they managed to hire a good team. Says Rahul: “In 2013 we got ₹3 crore from an HNI in Pune. With this we built a team and could even invest in R&D.”
Says Swati, “For a start up getting good people is the biggest hurdle. People don’t trust you since you are new they’re not sure how long you will last.”
With so many players in the solar power arena, what is it that separates them from the rest?
For Sunshot it is their cloud-based IOT. Says Rahul, “We have developed in house the best could based IOT platform that connects the solar panel, the MSEB and the diesel generator. We can control through this IOT platform in real time our clients power needs and switch from solar to generator to MSEB.”