Cos Like Tata Selco Make Profits From Renewable Energy

Rahul Gupta could not manage to get a job in 2010 when he graduated from IIT Roorkee. This March his company, Rays Power Experts, will clock a combined turnover of Rs 600 crore in four years of its existence. At 27, Gupta has 125 employees working under him and is already preparing to compete with well-established companies to bid for large solar parks. Gupta's story suggests that solar energy sector is no more only about preserving the planet. It also makes great business sense.

Solar energy makes business sense for small entrepreneurs as well as big corporate houses such as Tata and Adani. The dwindling cost of producing energy from the sun has made a compelling case for big companies to start up businesses. The government has plans of installing 100 GW of solar power in India by 2022, instead of an earlier target of 20,000 MW, which itself looked ambitious once upon a time. Thus, solar energy has transitioned from being merely corporate social responsibility to opening up a sea of opportunities within a span of four to five years.

Ratul Puri, chairman of Hindustan PowerProjects, will add 2 GW of solar power over the next two years by investing Rs 12,000 crore, adding to his portfolio of thermal and hydroelectric power. In fact, according to Puri, more conventional power producers like him will in the next few years start investing heavily in renewable energy. The solar revolution, meanwhile, is not confined to setting up megawatts and large solar parks. It finds its best application in the remotest Indian villages where transmission lines and government agencies haven't reached in almost seven decades.

In such areas, social good and profits go hand in hand. When Tarun Singh - an electrical engineer working in the US for eight years - came back to India to start his own venture, the renewable energy sector was a 'no-brainer'. He realised power was still as scarce in his home state Bihar for the rural poor as he remembered from his childhood days. In June 2010, he started Veddis Solars, bringing solar energy solutions to villages of almost all districts in Bihar. Another large area of growth includes decentralised or rooftop solar power for commercial buildings.

Shubham Sandeep, an alumnus of IIT Delhi, gave up his cushy investment banking job at Deutsche bank within two years of joining it and teamed up with batchmate Nimesh Gupta to start a solar rooftop installation company, Aeon Solaris, in 2013. At the end of two years, the 26-year-old Sandeep is eyeing a turnover of `10 crore.

Installation of solar energy in the country, whether it is large-megawatt parks or local solutions, cannot fully take off without having adequate domestic manufacturing. The government's new target has speeded up production as well. Tata Power Solar CEO Ajay Goyal in 2014 increased module manufacturing capacity by 60% taking it to 200 MW a year. Depending on further government policies, his company is prepared to make the additional necessary investments.

The promising business prospects of the solar energy also made Sumant Sinha, the owner of Renew Power, which was originally a wind energy company, diversify into this business in 2013 December. Soon after, ReNew Power bagged the largest tender in Telanagna of 140 MW, taking its total solar projects to 250 MW in a year's time. The company aims at installing 100 MW every year for the next three to five years.

But if the solar sector has created a new area spilling over with business opportunities, it also requires an ecosystem for entrepreneurs. There is movement here as well, as experienced workers in the field have taken to mentoring budding entrepreneurs. Harish Hande, recipient of the Ramon Magasaysay award in 2011 in the field of social entrepreneurship, had demonstrated in 1995 how energy is related to poverty reduction when he established his for-profit organisation SELCO. Hande, an IITian and alumnus of the Massachusetts Institute of Technology, is mentoring entrepreneurs.

Solar energy price is reaching parity with conventional energy when pitted against good quality and imported coal. While its future course depends on several factors, not always predictable, its recent growth makes it a strong contender for a large part of India's energy needs. Here is the story so far, told by the recent participants in the growth.

Article source: http://economictimes.indiatimes.com/industry/energy/power/solar-businesses-how-cos-like-tata-power-solar-selco-are-making-profits-from-renewable-energy/articleshow/46180434.cms

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