India is witnessing a massive transformation in the power sector. The Centre has an ambitious goal of installing a capacity of 40GW from rooftop solar power systems by 2022. This will facilitate an affordable and a cleaner energy source. In a conversation with Potshangbam July, Radhika Choudary, co-founder and director, Freyr Energy, talks about how her firm plays an important role in helping meet the government’s green energy targets.
EB: When and how did the idea of starting Freyr Energy strike you? What are your key offerings in the solar sector?
I started my journey in the solar sector in 2008 and, over a period of time, realised that making solar a reality in India needed efforts at the grassroots level. The need of the hour was to think beyond the regular brick-and-mortar way of doing things that was then prevalent in the market. Saurabh Marda and I established Freyr Energy in 2014 with an aim to make solar energy accessible to all.
EB: Tell us about the new SunPro+2.0 mobile app, the updated version of SunPro. How does it help to run the solar business with ease? And what is your strategy for the company’s future growth?
SunPro+brings together vendor management and project execution on to the platform, ensuring the quick and efficient execution of our projects. This helps us reduce further overheads.
SunPro+has helped us to expand our channel partner network and now includes 250+partners from diverse backgrounds. This has ensured that Freyr has easy accessibility to customers. Our customer acquisition costs are around 1 per cent.
Internationally, we are pursuing an opportunity wherein SunPro+will be offered to small and mid-sized solar companies as a SaaS model, which will help them grow their business. In developed countries, the cost of acquiring a customer can range from 10-25 per cent of the selling price of the system. Advanced analytics, backed by machine learning algorithms, will help users make better decisions as it relates to the performance of the sales team, the customer segments to target, and predicting demand in upcoming quarters, to name just a few features. The platform is customisable for each enterprise user’s preference.
EB: Can you elaborate on the benefits of a solar rooftop (SRT) installation? How does it contribute to generating clean and green energy?
Rooftop solar, as many already understand, is a clean, green way of generating your own electricity. In fact, every 5kW system is equivalent to planting 60 trees. But what many do not understand is that it is also a financially sound investment. Solar users enjoy a ROI of a minimum of 20-25 per cent. With very low maintenance, and the life of a rooftop solar power system being 25 years, it is a low risk investment as well.
EB: How many solar rooftop projects have you installed in the country so far?
Freyr has successfully installed solar in over 1200 sites, with a cumulative capacity of 12MW of rooftop solar energy across 19 states in India. This includes installations at homes, petrol pumps, educational institutions, manufacturing plants, police stations, communities in rural areas, etc. Freyr has installed projects ranging in capacity from 2kW to 1MW.
EB: How are the business activities on the overseas front?
Currently, we have a footprint in the US, Singapore, Ghana and Nigeria. And as shared earlier, internationally, we are pursuing an opportunity wherein SunPro+will be offered to small and mid-sized solar companies as a SaaS model to help them grow their business.
EB: There are large scale solar rooftop installations in commercial, industrial and government/PSU segments but not much in the residential sector. What is holding back faster adoption in the residential domain?
The major issue is with how to create awareness on the benefits of solar to households. The government is doing its bit promoting solar through subsidies and net metering policies, but there is much more to do. With the increase in awareness, residential consumers will come forward to adopt rooftop solar power systems.
EB: The government’s ambitious solar rooftop targets do not look achievable at the moment, with reports surfacing that India has achieved only 10 per cent of its 40GW target from this segment. What are the flaws that need to be rectified?
Until June 2018, the Solar Energy Corporation of India (SECI), a central government body, offered schemes that were standardised across the country. Right now, the policies are being drafted and implemented by the state nodal agencies and hence the policies differ from state to state. This causes confusion for the customers. So, a standardised policy for subsidies and net metering will drive the solar rooftop segment, especially in the residential category. Net metering is a utility billing mechanism that offers a credit to residential and business customers who are generating more electricity than they consume with their solar panel systems and hence feeding it into the grid.
EB: What would you like to suggest to the policy makers to accelerate the pace of SRT installation?
Other than a standardised net metering policy, discussed earlier, tax breaks for investments in solar can help accelerate the adoption of solar rooftop systems. Currently, the government is providing subsidies for solar. But this is limited to a certain customer category.
EB: Have there been any positive developments with potential investors to support expansion plans?
Yes. The funds we have raised in our earlier round are being utilised for our marketing efforts in the Indian market and to engage with our current channel partner base.
EB: What are the challenges that users face in adopting solar energy?
The challenge is that the awareness level is low. The customers are unable to differentiate between various options available as the information provided is a little too technical for some. Some states still do not have net metering policies that benefit the customers/users.
EB: What do you think are the Indian solar energy industry’s prospects over the next five years?
Despite a few challenges, we see that the industry is definitely growing at a healthy pace. India is already one of the lowest-cost producers for solar power. The potential in the market is very huge and with the right support from the government, we should be able to grow at a faster pace.