SolarSquare | Making power when the sun shines

June 12, 2024

Solar seems like the obvious solution to generate electricity in a sunny and growing country like India. But it’s only now that we are finally seeing a solar revolution. And even now, there are issues that must be addressed before solar can have a significant share in our power generation.

Why solar has taken time

There are four main reasons solar hasn’t taken a more significant share of power generation, not just in India but globally. These are:

  • Until recently, solar photovoltaic cells were unaffordable, with a break-even point at more than 10-12 years. As with many other industries, it’s when China decided to ramp up production that the cost has fallen — to a point where solar panels are now being dumped.
  • Since solar energy is intermittent, i.e., it can only generate power when the sun is shining, it needs to be augmented with normal electricity from the grid. Going ‘off-grid’ is still not feasible for most urban dwellers unless they install still-expensive batteries.
  • The grid consists of power generators, sub-stations, transmission lines and distribution companies. These are expensive. Many entities have invested a lot of money to set up this infrastructure — and they obviously want a return on their investment. Letting solar generators connect to the grid may mean these entities have to forego some profits.
  • It’s difficult to get finance (i.e. loans) for upfront investment into solar energy. The power output from a roof-top solar installation varies depending on the quality of civil and electrical workmanship, as well as ongoing maintenance. There is no secondary market for solar panels, let alone for entire installations. 

What changed to make solar viable

We spoke to Shreya Mishra, CEO and co-founder of SolarSquare, for an episode of The Climate Conversations.

According to Shreya, the solutions are now emerging to to each of the four issues with solar energy. In her words, the four ducks are lining up.

As reported by ET Energy World: “the steepest dip in solar installation cost in India over the past decade is due to a combined effect of reduction in solar module prices and overall reduction in BOS costs. The solar module prices in India from 2010’s levels have gone down astonishingly by 82 per cent to 85 per cent till 2022 impacting the cost of utility solar PV plants by close to 81 per cent in the country.

This is mostly because China did what it always does best — flood the market with low priced products. China’s solar exports to India had grown drastically in the last few months of 2023. This was possible because component manufacturers have been exempted from registering under the Approved List of Module Manufacturers (ALMMs) till 31 March 2024.

India is taking advantage of this free-fall in costs by putting in supportive policies for both, manufacturers of solar panels as well as for ‘prosumers’ (consumers who are also producers of electricity) of solar power. India is targeting creating 500 GW worth of non-fossil fuel based generation capacity by 2030. A good chunk of this will have to come via solar. India’s supportive policies include: 

India has also launched a number of schemes — Solar Park Scheme, VGF Schemes, CPSU Scheme, Defence Scheme, Canal bank and Canal top Scheme, Bundling Scheme, Grid Connected Solar Rooftop Scheme, and more. The full list is available here. The government also plans to train around 100,000 individuals to install solar panels on residential homes. In fact we have already trained more than 56,000 such ‘Suryamitras’.

India has also facilitated ‘net metering’ for residential prosumers for loads up to 500 KW, through an amendment to the Electricity Act

The most recent policy announcement was a subsidy for installing on-grid solar for 1 crore (10 million) houses under PM Surya Ghar Muft Biji Yojna.  

How SolarSquare is building out the final mile – customer trust

SolarSquare was founded in 2015 by Neeraj Jain and Nikhil Nahar, to provide solar solutions to large corporations. In 2020, it pivoted to the residential segment, when they realised the ‘ducks were lining up’ — with the break-even period falling to under five years due to technological advancements and cost reductions.

The firm brought on Shreya, who happened to be Neeraj’s ex-classmate and wife, to build out its retail value proposition and brand. As she explains in the interview, the startup build out its USP:

  • WindPRO mounts: SolarSquare has developed pre-engineered, prefabricated solar pergolas called WindPRO mounts, which are cyclone-proof and allow families to use their rooftops while generating solar power.
  • Standardization and safety: The WindPRO mounts ensure standardised quality and safety across installations, reducing the risk of errors during customisation and ensuring the installations can withstand high wind speeds.
  • Scalability: The standardised installation process and prefabricated components make their product scalable, as it reduces the need for on-site customisation and allows for consistent quality across multiple locations.
  • 5-Year installation & financial viability warranty: SolarSquare provides a five-year maintenance plan that includes regular cleaning, quarterly health checks and remote monitoring. They guarantee the solar system’s power production, offering financial compensation if the system under-performs. This 5 year warranty period is the same as the break even period.

SolarSquare claims to be the leader in residential solar rooftop, citing the national portal — with about a 30% market share in all the 15 cities in which it operates. More than 30% of its leads come from word-of-mouth and referrals, reflecting its high net promoter score.

While bootstrapped and profitable as a B2B company, SolarSquare raised funding to scale its residential pivot in 2022. While some of its investors, like Rainmatter, were impact-oriented, other investors were betting on purely financial returns. It has raised follow-on rounds, with the most recent one in May 2024 taking the total to more than USD 20 million, according to Entracker. The company is yet to file its financial statements for FY24, but its revenue from operations grew 35.4% to Rs 107 crore in FY23. It posted a loss of Rs 35 in the same period.

We agree with Shreya. Now is a good time to go solar. Let’s make power while the sun shines.

Consulting Producer, Zerodha

Post a comment