In late 2020, entrepreneurs Neeraj Jain and Nikhil Nahar decided that will confound most entrepreneurs. Regardless of operating a Rs 100 crore bootstrapped and worthwhile startup centred on establishing solar energy installations for giant firms since 2015, they determined to make, what many felt on the time was, a dangerous pivot in direction of the (B2C) residential photo voltaic phase.
To assist them make that pivot, Neeraj roped in fellow entrepreneur and IIT-Bombay graduate Shreya Mishra, who had prior expertise of operating a shopper enterprise.
“Neeraj and Nikhil have been solely 26 and 27 respectively once they based SolarSquare in 2015. In the identical yr, I based Flyrobe, a style rental startup. It was very totally different from the world of photo voltaic power. I bought my startup in 2019, and within the following yr, my husband Neeraj satisfied me to affix SolarSquare. He was an engineer with banking expertise however needed to do one thing with deep that means and goal. Whereas he had a very good grasp of the photo voltaic market, he needed my experience in constructing shopper companies. That’s how we began experimenting within the residential photo voltaic phase, which is extra B2C,” remembers Shreya, co-founder of SolarSquare.
This was going to be a troublesome pivot as a result of the economic phase may be very totally different. As an organization within the industrial and industrial phase, SolarSquare was establishing large and customised solar energy installations price a couple of crores for Fortune 500 firms. That is in contrast to the residential sector the place they’re coping with particular person householders.
“Neeraj and Nikhil took a really daring name to experiment within the residential photo voltaic phase as a result of they understood the large enterprise alternative it provided at a time when no organised firm within the photo voltaic power area noticed it. They noticed that the residential photo voltaic phase seemed like the chance of the longer term. In the event that they have been to decide to this, they needed to focus all their energies on it. That was a significant inflexion level,” she provides, talking to The Higher India.
The residential photo voltaic phase offered the chance of the longer term as a result of common Indian households have been combating rising electrical energy payments because of growing tariffs and common incidences of maximum climate situations. Rising electrical energy prices in lots of states made it crucial for customers to discover different options. One viable answer for particular person householders and residential societies was to undertake rooftop solar energy installations.
As Shreya explains, “For the residential phase, we’ve constructed a number of standardisation in photo voltaic installations that has allowed us to scale. Think about doing tiny photo voltaic installations which can be customised to every house! It’s too advanced a course of for a B2C operation. We standardised all the pieces and made prefabricated ready-to-install photo voltaic kits, which get put in in simply six hours. In different phrases, we underwent a number of studying innovation for this phase.”
Barely three and half years later, SolarSquare has emerged as a number one residential photo voltaic model in India with a shopper base of greater than 10,000 particular person householders and over 100 residential societies. As Shreya claims, “Quite a lot of serendipity led us right here. At present, we’re operational in 16 cities unfold throughout eight states. Over two rounds of funding, we have now raised about Rs 130 crore and we’ll be doing near Rs 200 crore in revenues on this monetary yr.”
Although about 20% of SolarSquare’s enterprise nonetheless lies within the industrial and industrial photo voltaic phase, they’ve pivoted near 80% of their enterprise in direction of the residential phase. Within the course of, they’ve additionally doubled in dimension as a enterprise — a big feat.
“At present, 80% of our enterprise is within the residential phase the place we work with particular person properties (2BHK, 3BHK) and residential societies. RWAs purchase solar energy installations for his or her frequent areas like lifts, water pumps, avenue lights, and so forth. Most of the high-rise residences you see in Mumbai, Pune, and Bengaluru are SolarSquare clients,” she provides.
Overcoming doubt
In January 2024, Prime Minister Narendra Modi mentioned that the Union Authorities had set a goal of putting in rooftop photo voltaic in a single crore households over the subsequent few months. When SolarSquare determined to pivot to the residential photo voltaic phase in late 2020, this main market alternative wasn’t obvious.
“Even households weren’t conscious of the advantages of photo voltaic. Folks didn’t know the fundamentals. Many individuals confuse rooftop photo voltaic installations with water heaters. They didn’t know you possibly can energy your house with photo voltaic. There have been a number of myths and misconceptions that wanted to be addressed and consciousness ranges have been very nascent,” explains Shreya.
SolarSquare’s first mandate was to create a model on the again of “academic advertising and belief.” To that finish, they printed movies, content material, and blogs, and labored with influencers to create consciousness. They’ve additionally printed a free home-owner’s information to going photo voltaic.
“Earlier than putting in something, we are going to assist a home-owner perceive why photo voltaic is sweet for them and how much photo voltaic set up is sweet for his or her house. We determined that we’d first educate folks earlier than promoting them something. See, there was rampant mis-selling on this business. Residential photo voltaic is a fragmented and unorganised market involving a number of native operators who do that as a aspect enterprise. Folks have been bought second hand or rejected panels as a result of they didn’t know tips on how to authenticate guarantee or high quality of merchandise,” explains Shreya.
“Additionally, many have been bought solar energy installations with out after-sales service. In case you are shopping for photo voltaic, shopping for the correct after-sales service is essential as a result of, with out it, your funding goes down the drain. We needed to educate folks about these items,” provides Shreya.
The subsequent largest problem for SolarSquare was convincing potential buyers that their choice to foray into the residential phase made enterprise sense.
“After we went out to boost funds, potential buyers thought that residential photo voltaic is a small market. Most of them have been extra engaged in fintech and e-commerce. They felt that residential photo voltaic was a really brick-and-mortar enterprise the place it’s important to go from one house to a different, educate folks, shut an order, set up panels at their properties, and keep them for years. No one understood this market and its potential,” says Neeraj.
Chatting with Forbes India in June 2022, Shreya claimed that residential photo voltaic was a ‘$50 billion alternative’ based mostly on her estimates. It was a really daring declare again then given how worldwide market analysis and advisory firms like Customized Market Insights estimated that the complete Indian photo voltaic power market was price $38 billion in 2022.
“Trying again, I most likely wildly underestimated the market. With one crore properties doubtlessly going photo voltaic within the subsequent three years, this market will most likely see $25 billion. In a decade, this might very effectively be a $75 billion to $100 billion market,” claims Shreya.
“It’s a novel time in historical past the place you may create a shopper model in power. In any other case, power has at all times been the sport of enormous firms and Authorities-owned energy vegetation. Power is now private and personal, and we will create a shopper model round it. Buyers took a number of time to construct their understanding of the chances on this market,” she provides.
How you can go photo voltaic with SolarSquare?
So, how can a home-owner in India set up solar energy of their properties with SolarSquare? A journey with them begins with registering an inquiry both on their web site or WhatsApp. As soon as clients register a question, SolarSquare units up a ‘free photo voltaic session’.
“Our photo voltaic marketing consultant, a educated skilled, will go to your house, survey your roof, perceive your electrical energy necessities, examine your electrical energy payments, and information you to the correct photo voltaic answer on your house. They will even clarify how solar energy works, what are the totally different know-how selections out there, and so forth. We seek the advice of the shopper with the correct answer for his or her house, reply all their queries, and solely then comes the query of promoting something to them,” claims Neeraj.
Additionally, many customers perceive the advantages of going photo voltaic. No matter cash they put into putting in photo voltaic, they’ll recuperate their funding in three to 5 years relying on the electrical energy tariff after which take pleasure in 20 to 22 years of free electrical energy. Nevertheless, the preliminary funding of Rs 2 lakh to Rs 3 lakh to put in a rooftop photo voltaic system is usually troublesome for many middle-class households in Indian cities.
“Throughout this session, we additionally take the buyer’s PAN card, examine his mortgage EMI eligibility, and current the EMI schemes we will supply to them. Folks can go photo voltaic on a six-month zero-cost EMI, 12-month EMI, or 60-month EMI. That makes it an inexpensive proposition. Additionally, in case of 60-month EMI, their preliminary down fee to us will get coated by way of the subsidy given by the Union Authorities,” claims Shreya.
To energy a 2 to 3-BHK house that doesn’t have air conditioners, a shopper will want a 3-kW to 4-kW photo voltaic set up. If such properties have an air conditioner, they might require 5-kW to 6-kW.
“Essentially the most generally bought residential rooftop photo voltaic set up is 3-kW. A photo voltaic equipment for this power requirement is about Rs 2 lakh, of which the Authorities covers Rs 78,000 as a subsidy (below the most recent ‘PM-Surya Ghar: Muft Bijli Yojana’). The buyer finally ends up paying solely about Rs 1.2 lakh,” she explains.
“On this 3-kW system, customers find yourself saving Rs 3,000 to Rs 3,500 a month in electrical energy payments. In a yr, this quantities to roughly Rs 36,000 to Rs 40,000 a yr in electrical energy financial savings. In about three to 4 years, you may recuperate all of your preliminary funding. Following this, this photo voltaic set up can provide you free electrical energy for the subsequent 20 to 25 years,” she provides.
“For the buyer on a five-year EMI, their internet funding comes right down to zero as a result of their down fee will get coated by the subsidy given by the Union Authorities, and month-to-month EMIs are coated by way of month-to-month electrical energy financial savings achieved after going photo voltaic. In internet phrases, the household doesn’t even have to rearrange any substantial sums. We name this the zero funding scheme of photo voltaic, which we educate the buyer about throughout a session,” says Neeraj.
As soon as the household (shopper) decides to ebook their providers, the startup attracts up an in depth technical design, takes care of all their Authorities permits, and applies for his or her subsidy. After the buyer has accepted the ultimate design, they pay an advance which is roofed by the subsidy, after which, the corporate delivers their ready-to-install photo voltaic equipment.
“Our ready-to-install equipment contains our trademark Wind Professional Mount elevated buildings, that are also referred to as module-mounted buildings. Measuring about six ft tall, these buildings are the spine of our installations holding up the panels. These buildings are very sturdy, include a 10-year guarantee, zero-rust assure, and certification from IIT-Bombay that even throughout a cyclone with wind speeds of as much as 170 kmph, nothing will occur to the rooftop photo voltaic construction,” she says.
“See, these photo voltaic installations are topic to exterior climate, elevated, and on prime of a roof, and topic to excessive wind velocity stress. They should be sturdy. We set up our photo voltaic equipment in simply six to seven hours. As soon as put in, the shopper requires an inspection from their native energy discom. As soon as the location is inspected, their last financial institution particulars are uploaded on the Authorities portal and the subsidy comes into their checking account inside simply 30 days,” notes Nikhil.
The Union Authorities lately launched the Nationwide Portal for Rooftop Photo voltaic on the again of which all of those Authorities subsidies and purposes are executed.
“We care for all these purposes for the buyer. We care for Authorities permits, subsidy purposes, EMI purposes, inspections, design, procurement, and so forth. We’re a full-stacked model that provides end-to-end options for the Indian shopper,” says Shreya.
Following set up comes an important half — after-sale service. India is a rustic the place roofs are topic to a number of mud and a wide range of exterior climate situations. These components trigger a number of put on and tear on rooftop photo voltaic panels.
“We provide a five-year complete photo voltaic care plan wherein we care for all the pieces from panel deep cleansing to technical, mechanical, and electrical upkeep. As soon as put in, it’s your roof and photo voltaic power however our accountability. As a coverage, we promote a five-year complete photo voltaic care plan so that buyers can take pleasure in the advantages of zero-electricity payments yr after yr. Shoppers can renew their after-sale care plan with us after these 5 years,” notes Neeraj.
“In case you take a look at rooftop photo voltaic techniques as an funding, you’re seeing 20-25% IRR (inside charge of return) if it provides you the correct efficiency. Upkeep is essential as a result of that’s the way you realise that 20-25% IRR. Each month or three months, a educated SolarSquare technician will come to your house, do a whole technical examine, electrical upkeep, and mechanical examine, and do a deep cleansing of the photo voltaic panels to make sure any laborious mud or fowl droppings are eliminated. Following this examine, you will note a spike in energy manufacturing,” claims Shreya.
Seeking to the longer term
One of many largest challenges shifting ahead for firms like SolarSquare can be managing photo voltaic panels that attain the tip of their lives. These discarded panels are sometimes left strewn round or ultimately get blended up with home strong waste and find yourself in landfills.
In accordance with a report by the Worldwide Renewable Power Company, “giant quantities of annual (photo voltaic panel) waste are anticipated by the early 2030s” and will contact 78 million tonnes by 2050. Shreya, nonetheless, believes there are methods to increase the lives of those used panels.
“In case you keep your rooftop photo voltaic set up effectively, it will probably last as long as 30-35 years. So, as soon as a shopper retires their photo voltaic rooftop system, they’ll donate the panels to non-profits working for a worthy trigger. These panels can run for an additional 10 years as a result of they’ve been maintained so effectively. These photo voltaic panels can have a second-hand life too,” she notes.
However she does admit that ventures like SolarSquare must devise complete plans to recycle decommissioned panels. “Since we’re solely a nine-year-old firm, we don’t have any photo voltaic installations which have reached the tip of life. The query of disposal and recycling is essential. Fortunately, you have already got firms within the US that may recycle 70% of the parts and supplies used to make photo voltaic panels,” she says.
In India, in the meantime, a workforce of researchers on the Centre for Sustainable Applied sciences (CST), led by Dr Monto Mani and working out of the Indian Institute of Science (IISc) in Bengaluru, is exploring whether or not outdated discarded photo voltaic panels may be upcycled as a constructing materials. With this, they wish to lengthen the panels’ helpful life by a couple of many years.
Nevertheless, by way of their future as a enterprise, issues look good.
In December 2021, they raised Rs 30 crore of their Seed spherical. Throughout their Sequence A spherical in October 2022, they raised Rs 100 crore. “Decrease Carbon, one of many world’s largest local weather tech funds, is our shareholder. It was their first funding in India. We even have Elevation Capital, who’re buyers in Swiggy and City Firm, and different notable buyers on board,” she says.
Furthermore, based on a November 2023 report by the Council on Power, Surroundings and Water (CEEW), greater than 25 crore households in India have the potential to deploy 637 GW of photo voltaic power capability on rooftops. In accordance with a Occasions of India report on the identical, “Additional, the CEEW report discovered that deploying simply one-third of this whole photo voltaic technical potential might assist the complete electrical energy demand of India’s residential sector (~310 TWh).”
For ventures like SolarSquare, the alternatives are large and the longer term appears to be like promising.
(Edited by Pranita Bhat; Pictures courtesy SolarSquare)