Even as India takes the lead in setting up a global solar alliance, the industry for solar products in the country is caught in a bind. Despite years of research, subsidies and a growing basket of products, none has been able to build a successful national brand and the industry continues to be the preserve of unorganised businesses selling in local marketplaces.
There is a range of solar products now available – lamps, mobile phone chargers, radio and music players, garden lights, power back-up systems and agricultural pumps – but the market for these products is in disarray. Information is hazy and incomplete, small and regional players hold sway and the supporting businesses – service centres, helplines and product supplements – imperative for a vibrant marketplace, are missing. The result: demand is low as urban consumers stay away and rural consumers turn to solar only when there is no other energy alternative.
|NO LOGOS ON THE SOLAR TRAIL
Such a phenomenon defies market logic. Solar powered products not only reach un-electrified areas but have the potential to be huge energy savers. Although the initial investment is high, solar power is cheaper in the long term and even the initial cost is sliding down slowly. (Solar home systems cost anywhere between Rs 5,000 to Rs 5 lakh and solar mobile chargers, between Rs 500-2,500.) Yet, there are barely two dozen companies operating in this space and most are local players with a notional national presence.
Blame lies with the energy policies or lack of them say some companies while others say the returns from this business are less than half the quantum of investment. Also vulnerability to fakes and cheap imports from China keeps the large companies away. “With policy flip-flop in off-grid solar space, the confidence of both customer and investor gets jittery,” says Shubhra Mohanka, CEO and co-founder, Solid Solar. Solid Solar is a brand owned by Gautam Polymers and is present largely in the northern states such as UP, Uttarakhand, Bihar and J&K. Mohanka adds, “A lot of time and investment is needed to educate the customer. The rural populace is ready to take it up as long as there is no conventional power available. In urban areas, people still consider it a costlier option.”
Greenlight Planet in Mumbai, Shashwat Cleantech in Gujarat, Anu Solar in Bengaluru, Maharishi Solar and D-Lite based out of Delhi are among the other regional players. Products of Green Light Planet and D-Lite are available online, which may help expand the market. But going online can help only if the brand is known. “There is no brand recall for solar products and that’s where a manufacturer fails to register with urban consumers,” says Karan Dangyach, founder, Shashwat Cleantech.
Shashwat Cleantech is one of key manufacturers of solar agri-pumps and is present in Gujarat and Maharashtra. Going national would mean aggressive advertising, which Dangyach says, is a risk that few want to take, given that even those companies that have tried to build a brand in this space have not found much success. “Tata Power Solar brands and sells its solar lamps for rural areas. It has been in the industry for 25 years. But there is minimal brand recall in areas where it isn’t present though the impact has been phenomenal in the areas Tata has worked,” says Dangyach.
To an extent, the problem lies with the way the industry is perceived; it is seen more as a social enterprise than a business. The perception derives from the nature of the industry and from that of its founders. Greenlight Planet, for instance was founded by T Patrick Walsh, a University of Illinois student in 2005 who designed and sold the first solar-lantern in 2006 in Odisha. The original intent was to make solar affordable and accessible, not to build a business.
To add to the problem, government support has been erratic. The Ministry of New and Renewable Energy (MNRE) along with NABARD used to have a scheme that subsidised the purchase of solar lamps, home systems or solar back-up solutions and equipment. NABARD and other rural banks used to provide low cost financing alternatives. MNRE also had channel partners manufacturing solar products and some state governments had pitched in with additional subsidies taking the total to 75-85 per cent.
However, the subsidy payments to companies dwindled after the initial euphoria. The payment backlog ran into months. Now, the MNRE has rolled back the schemes and with no state support, even the banks are reluctant. “It is a very slow market. The sector needs to be mature enough to be left without subsidy,” says a Delhi based sector analyst. The margins are low and companies find it difficult to rustle up the investments required to market their products. This makes it near impossible for brands to flourish and keeps out the large and established players. Now with the global push in favour of solar power, it is perhaps time to script a new story for the sector.