Business Ideas To Advance on Solar Energy in India

For decades renewable energy and solar power was something that common people in India didn’t think much about. But after all the efforts done in this field to promote solar energy now the situation is different.  Climate change, rising energy prices and technology advances have helped change the collective mindset of Indian consumers.

In the future, we would see consumers who are highly informed, environmentally conscious and want to contribute to changing their  lives as well as others. But the focus of this article is on the entrepreneurs who want to earn their place in the solar market but do not know which business ideas to follow.

India business ideas and opportunities in solar energy

Everyday people are becoming more energy conscious and are going green when it comes to the things they use. Solar-powered gadgets and home equipments are just 2 of the many segments where the solar industry is growing in India. We all know that advanced technologies make smart grids possible. There are a lot of solar companies that can provide information and required tools to their customers to help them change their consumption patterns and reduce energy usage  – i.e. reduce their utility bill..

There is a world of business opportunities to discover in solar energy. That’s why starting your own solar energy business can be a very good thing for your life. But how can you start a Solar Energy business on your own?

First of all you need to have talent and passion in order to become a successful entrepreneur in the solar energy business (as in any other business). After learning solar power basics you will need a business model for your company. We identify at least 3 models that you can use.

3 business ideas / models to advance on solar energy in India

CAPEX  model

The most common business model for solar deployment in India today is to simply sell either a complete plant (by an EPC company) or individual components (such as modules or inverters) to an end customer who owns the plant. The consumer pays 100% of the PV system cost upfront. This model, sometimes referred to as the CAPEX model, is pursued by the vast majority of solar companies, such as TATA Power Solar, EMMVEE Photovoltaics or Moserbaer. The term “CAPEX” is the capital expenditure or expenditure on the total cost of a power plant.

This model can be improved, for example, by developing specific, standardized solar kits (Ready to install kits which consists of all components required for installation) for specific customer types, for example in the range of 1-50 kWp. Consumers can purchase these kits from suppliers and get them installed by the local community installer. Such a model is followed by various companies like TATA Power, First Solar, among others.

Renewable Energy Service Company (RESCO) Model

Under a RESCO model, a third party investor comes in to invest into a plant on the consumer’s rooftop and sells solar power to the consumer. There is no investment required from the consumer. If solar power is viable the consumer can benefit from savings from the start. The investor and the consumer agree on a “per kWh” tariff and timeline of a power purchase agreement (typically between 15-25 years). Operations, repair and maintenance of the system would usually be carried out by the project owner and not the consumer.

This model becomes more feasible for larger project sizes as the transaction costs would prevent an investor from investing into small plants (unless many small plants can be easily bundled together). Thus, the model is applicable particularly to commercial and industrial consumers in Delhi, for example, who might not be willing or able to invest upto INR 2.5m (EUR 38,461; USD 50,000) for a 100 kW system, but are ready to commit to an attractive long-term power purchase agreement.

Local Micro Utility Model

Third-party solar power developers could rent roof space from building owners in a designated area, install PV systems and sell the power generated to the rooftop owners, or the DISCOMs at a pre-negotiated tariff. The project developers would particularly target those consumers who might not have the resources or would be unwilling to invest in rooftop solar. Developers can offer building owners a lease income on their rooftop space.

This model allows project developers to bundle rooftop space in a community and thereby minimizing the legal, commercial and technical transaction costs by increasing the size of individual plants. This makes the model especially useful for deployment of solar for residential consumers.

Conclusions about advancing on solar energy in India

Small business ideas in India’s the solar industry are rising. The numbers of consumers are also rising along with installers and manufacturers. If you ever thought in creating your own business then this sector is very appealing. It can start off from only being a home based business offering consultancy on solar panels (for example), but once you start you will understand all the other solar business opportunities.

Are you looking for Solar Installers? On this page, you can find Solar Installers in India, near you, allowing also to compare solar installers and look at projects that they have executed and products.

The E-Book FIND THE BEST SOLAR SOLUTIONS FOR YOUR HOME COMPANY OR FARM is designed to give you a quick start on solar, make your life easier and save you time. It gives you an overview of the different solar solutions and starting points to learn more about them. Download now HERE.

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Gayrajan Kohli
Gayrajan Kohli
Gayrajan is a staunch solar promoter, serial entrepreneur & management consultant. He has a decade of experience in solar PV, disruptive technologies and political consultancy in USA and India. He believes that development of solar and other renewable technologies is critical to India's energy security. Gayrajan holds a Masters and a Bachelors in Electrical Engineering from USA. Follow him on Twitter to gain daily industry insights.
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