“The Sun Shines Everywhere”
In the winter of 2009, the City of London was reeling in the aftermath of the financial crisis and I was working at a German alternate investment fund. Our first investment was in a solar inverter company. As I read up on the global solar market and analysed the position of our investment, it struck me that India, my home country, has lots of sunshine and faces many challenges in the power sector. The simplicity of the problem statement and the potential solution got me thinking. I was a recent graduate from the London School of Economics and my time there instilled in me the concern for issues around the development of growing economies. Capitalism was taking a beating in 2009; however, I did not see a distinction between profits and impact. The world has seen many examples of individuals that have given back to the society through the means of a profitable enterprise.
Like healthcare and education, accessibility to affordable power is a basic human need, crucial in eliminating poverty and creating a level playing field in the society. Entrepreneurs are excited by the challenge of solving a problem, especially a big one. In 2011, I quit my investment banking job in London and moved back to India to pursue my journey with solar. I spent a few years at one of India’s leading renewable energy financiers. It helped me study the solar market in detail and develop relationships with industry stakeholders.
On the one hand, the power tariffs in some parts of India are higher than global averages, while on the other hand, over 300 million people in India don’t have access to electricity. Given the state of transmission infrastructure, large parts of the country have to contend with frequent power cuts. For India to be a strong global economy, energy security is key and in my opinion, distributed solar is the way forward. For generations, small business owners have demonstrated the entrepreneurial spirit of India. Enterprises such as manufacturing facilities, schools, and hotels provide employment to many. Power is a key cost component for them. A marginal change in their power costs significantly impacts their bottom line and results in higher productivity.
In March 2015, I started Sunvest Energy Private Limited (www.sunvest.in), a rooftop solar company focused on residential and small commercial markets in urban and semi-urban India. We believe that rooftop solar, akin to a consumer product, will be owned by every building in the years to come. Net metering regulation for solar — the ability of the roof owner to sell power back to the electricity utility — is very new in India. Net metering allows for potentially any roof to go solar and connect to the grid. Our projects are either the first in the neighbourhood or the very first few in the state. We have noticed electricity bills for some of our residential customers fall significantly. Another customer, a resort in the foothills of Himalayas, plans to bank its solar power during the week to offset its peak consumption during the weekend.
Our observation is that in developing countries there are too many players in the value chain, hence our model of a comprehensive solar solution, which includes customer acquisition, installation, utility permissions, financing, and after sales service, ensuring that the customer speaks to only one entity. Technology innovations around customer acquisition, data monitoring, consumer financing, and most importantly, integration of solar with storage solutions like batteries, will ensure a significant growth for this sector in the years to come.
Our biggest challenge so far has been to understand and work with the complex regulations around net metering and utility connections. In light of this, the need for battery technology is even more important. The rooftop solar business is currently open to regulatory risk. Battery backed solar systems will mitigate this risk.
Given the need for technology and innovation, I am excited to be invited to the Global Entrepreneurship Summit 2016 in Silicon Valley this June. The initiative, convened by the U.S. Department of State, is an ideal platform for entrepreneurs to meet and discuss ideas that have the potential to scale and impact the lives of millions. In addition to GES, I have been selected as a GES+ delegate, which means I will have access to a day-long intensive program before the official start of GES that will pair 150 leading industry experts and investors with 150 of 2016’s most dynamic global youth entrepreneurs. California is a big supporter for distributed solar, so I am also hoping to meet with key stakeholders from the solar industry and explore partnerships for Sunvest.
The sun shines everywhere and, ironically, more so in developing countries. I have noticed similar challenges in Sri Lanka, Philippines, Thailand, Kenya, and other countries. The West has the capital and the technology solutions, however Asia and Africa are the growth engines of the 21st century.
As an avid long distance runner, I am reminded of the wise words of the Ethiopian running legend, Haile Gebreselassie, who once said “No race begins at the start line.” A lot of effort, sacrifice, and belief goes into reaching that start line. In the journey of solving complex problems, if you are at the start line or have already taken off, I would love to connect, share and learn from you. I can be reached at sishir@sunvest.in or @sishirgaremella and @sunvesting
