Verify Markets Interviews Sharat Kaul of Solar-Apps Energy
Sharat Kaul is a Bangalore, India-based social entrepreneur and innovator. He is the founder and managing director of Solar-Apps Energy Pvt. Ltd., offering financing and engineering prototyping solutions. In 2016, Solar-Apps helped finance a 125 kW elevated solar system, prototyped utility-scale floating solar power plants, delivered portability with Wi-Fi enabled all-in-one LED street lights and marketed web-enabled irrigation pumps. Since its inception in 2010, Solar-Apps has completed over 50 solar projects across India of varying complexities.
Sharat is an active member of ASSOCHAM, the CII CEO Forum and Indo-American Chamber of Commerce, in addition to serving as adviser to the Agastya International Foundation. A US born son of Kashmiri Pundit parents, Sharat has over 25 years of experience in the semiconductor and microprocessor industry with companies like Texas Instruments (US) and Synopsys (India). He is passionate about renewable energy and founded Solar-Apps to create innovative solar applications that make a difference in people’s lives. Sharat holds a BSC from Bangalore University, a BSEE from the University of Texas, Dallas, and an MBA from the Cox School of Business, SMU.
Can you describe your operations in the recent years? What are your plans are for the next 5-6 years?
We are focusing on and operating in multiple market segments - these segments are in ranges from 1 kW up to even 50 MW.
From 1 - 100 kW, we do the project as Engineering Procurement and Commissioning of the plant. We also undertake the Annual Maintenance Contracts of all of the plants. We have completed about 50 projects already. These are systems with batteries, without batteries, systems on the roof, with elevated structures, car parking sheds, and much more.
From 100 kW to 1 MW, we do rooftop solar and we provide financing for all of those. We are channel partners for investors that own the solar assets and sell the power.
For larger scale industrial plants, we also do the project management consulting wherein we help float RFPs or tenders, short-list vendors, and aid the client through project commissioning.
These are our core business segments on the EPC and finance side.
After all that, we also specialize in advanced engineering and prototyping of solar applications. We create electric or battery-based systems and make them into solar powered electric systems; then we try to miniaturize them for portability.
Would you elaborate on the prototyping aspect?
Sure, for example, one of our prototypes is an all-in-one streetlight. Instead of a system requiring a separate battery box, a structure for the solar panel, and a light with wiring, we have a product with the battery, the light and the panel all integrated into one unit! The concept being that there would be no installation cost, no wiring, and you can move the light from place to place. We plan to add modules like Wi-Fi and CCTV cameras to this innovative mobile solar application.
Another example is the micro-irrigation pump, which is just a 0.1 HP pump that can be put on a cycle so a person can put solar power can pump water as a business service because it is portable. We’re also doing micro-villages and smart villages where we put small micro plants and we put LED lights and some basic loads to power homes. We’re also doing solar plants on water, floatovoltaics!
What part of India is this taking place?
In Bellary, Karnataka on a man made large 250-acre pond.
How did you come across this concept and how did you manage to implement it?
It’s still a process, the customers approached us and they had a challenge: they wanted to avoid the evaporation of the water; they wanted to avoid the damage to the panel when the water levels changed. The customer needs advanced engineering and mechanical engineering design; we have a patented approach to how we are doing it. It still has to be commissioned; it’s currently under process.
It’s great that, these technologies are also coming to India. Does the functioning of the Karnataka’s floating solar power plant is similar to the one in Japan?
The solar plants are near identical, 1 MW generates about 1.5 million units of power per year, but the way you put it on the water can be on the floatation system, it can be on wooden planks it can be on steel it can be on concrete, but what we’re doing is a little bit different with a cantilever mechanism - with a counterweight. It is actually like chain links. I can’t talk too much about it right now because it is a work-in-process.
What would you say are the strengths of Solar-Apps?
Our strengths are in sales, marketing, and advanced engineering. We understand the industry because we have been doing it for so long, with over 50-years of cumulative years of experience already under our belt - plus we already executed so many projects. The experience of our team, our maniacal attention to quality, and our enthusiasm with new product development really sets us apart. Our alliance partners make us a very strong contender.
Who are your partners?
We’re channel partners with ZTRIC Inc., a US-based investment firm, for our advanced engineering and product development there is a company called Prodigi, and we have a solar CRM software tie-up with Australian Access Solar, to name just a few.
What are the factors that drive the business for your company?
The increased usage and depletion of fossil fuels will cause higher costs in natural gas, petrol and diesel, which are drivers contributing to the growth of the solar industry. The demands for solar have increased so much in the past few years that the panel cost have come down dramatically - so cost is also a major driver for people moving over to solar energy. There is also the need to go mobile without wires and miniaturization. This is also a good place for us, because we are trying to miniaturize things that use solar power instead of electric power from the grid. You have been seeing solar cars and gadgets, which don’t need wires anymore because they can be charged with solar power. The high cost of power, low cost of solar and the need for more mobility are all major drivers.
I understand that you are working on mini grids as well, correct?
We look at a village, which may not have connectivity to the grid or may have very limited connectivity, and then we set up a 5-10 kW solar system with batteries. We draw power lines to the villages and give them plug-points and then we are also offering an all-in-one lighting solution. We are also going to create a system where the energy usage is metered and it automatically gets billed from the phone. The customer can pay for the power, maybe 10-15 rupees (15-25 cents) per unit, and their consumption is so low that it becomes a self-sustaining model.
Do you also cater to telecom towers through mini grids?
Diesel consumption from these towers is one of the highest violators in India. Indus has over 400-500 thousand towers and there is close to 800 thousand towers in the country, so we had done a lot of studies about these Base Transceiver Station towers and how to solar power them. We’re working with Indus towers right now and providing them with net metering, so then you can put systems without batteries on these towers.
Can you just tell me why Solar-Apps is doing better than its competitors in the field it operates?
They are stagnant; if you look at it, it is like two pyramids. On the left hand side, you can see a pyramid with the market is huge at the bottom of the pyramid, very small systems with 1-10 kw, but the numbers are very large and at the top of the pyramid are the massive utility plants of 10, 50 and 100 MW and in between are the industries with about 100 kw, so we are making systems ourselves in 100 kw and the larger ones, we’ve been consulting.
The bottom of the pyramid is where the competition is the largest. For most of the players, the barriers to enter are the smallest, the investment capital is smaller, so you have a lot of players, whereas at the top of the pyramid is very limited to only people with deep pockets, the large industrialists such as the Mahindra’s and the Tata’s. Yes, we do have competition everywhere, but we are trying to create a niche for ourselves.
What are the trends you see in the solar energy sector in the next 7 years in India?
I see the cost of storage coming down and cost of the panels coming down, I see the storage technology getting better and smarter. The technology that goes in the batteries and the panels will improve dramatically, so we’re going to see much smaller and high efficiency panels at much lower rates, like transparent panels, ones that go on buildings, cars and other moving objects like trains. The batteries will be unrecognizable; they are going to look beautiful, unlike the ugly ones we have today. It would be a future where batteries won’t have to be charged with wires; they’d instead be charged through inductive charging and the age of wires will go away. Actually, there is a company called WiTricity, which specializes in wireless charging.
What would you say are the rules, regulations & policies that affect your business here in India?
One of the policies is obviously the Jawaharlal Nehru National Solar Mission saying that they want to do 100 GW of solar by 2022, out of which they want to do 40 GW of rooftop solar; that impacts me. Then the need for specific projects like telecom towers and laying solar panels over canals, these impact, us as far as policy goes. As for Rules & Regulations, the government offers a 30% central subsidy for the rooftop solar and they offer 90% for backward state, so that helps us for certain projects. Funding for startups in innovative research is also helping us, they do funding with the Indian institute of Science, other technology labs, smart cities as well as the universities, so that helps us. Then they have the Ministry of New and Renewable Energy channel program and they are helping companies like us, giving us notifications about projects that are coming up. Then there is also the Renewable Purchase Obligation, which means that if you are a large power consumer, 3% of your total power must be from renewable energy or through Renewable Energy Certificate and that another one where people are desperately trying to meet their Renewable Purchase Obligation.
What are your growth and expansion plans in the next 7 years?
My growth plans are to find as many power purchase agreements as possible as an independent power producer and be able to maintain these plants for 20 years on Annual Maintenance Contracts. I make money on the tariff and I make money on the Annual Maintenance Contracts. I also see myself doing much larger projects, which last 2 to 3 years, the floating project on water is going to be at least 2 to 3 years and if that continues, it would be on multiple lakes. I see myself doing larger projects and probably moving away from the smaller projects, but we have to do the smaller ones first.
What about your expansion plans on micro-grids?
Well, micro grids and village electrification are not ways where we would be making a lot of money, there is no money to be made in the poorer sections of society; all of that is going to be done through social service and community service. It is not something that is going to make anyone rich and that’s a fact. Growth and the scale will not come from micro grids because there is no money to be made, so the micro grids will be made once we make money. We will use our money for the micro grids for the betterment of villages. Or when we get grants for funding, but making a revenue model and making money with consistent positive cash flow is doubtful there.
What about utilizing funds of Venture Capitalists?
Yeah, there are energy funds, and private equity players, which would be interested in projects we do, they might even be interested in special purpose vehicle/entity where we set up an entity, and debt financing. I’m looking for Venture Capitalists in case one of my prototypes becomes a product like the all-in-one light or the irrigation pump. Maybe a Venture Capitalist might pick that up, or pick up Solar Apps if they like our business plan, helping us scale and grow.
Can you tell me about the challenges you face in the business?
The challenges are consumer education, the high cost of solar power (which is now coming down). It takes the world sometime to recognize that this is cheaper source of power, it is a lot of education. As I told you with the bottom of the pyramid, the 1-10 kW and the 10 - 20 kW range, anybody can become a solar installer. There the competition is huge and the barriers to entry are really low. The opposite is true for the larger projects where it is harder to enter because the capital requirements are so high, so the middle is where I think we are going to be playing; the 100 kW area and doing the financing and some of the Engineering Procurement and Commissioning. Furthermore, solar is typically required in backward areas and getting to these sites is hard due to poor connectivity.
What is your vision for the company?
I have set myself a target of INR 1 billion in 5 years; I haven’t set a target for 10 years, for a INR 1 billion, we need to be doing a lot of big projects and have a lot power purchase agreements in place and a lot of Annual Maintenance Contracts.
What is the value proposition of Solar-Apps?
We’re a product innovation company and we’re looking at a niche market, where I think we have an ability to do sales and marketing in this niche where others don’t. Also, we are innovative, creating something new instead of doing the same things over and over. Furthermore, we are hassle free, flexible, and we get the job done. We get it right the first time, and the high focus on quality and not giving up until it is perfectly done.
We are a very analytical company; we rely on data and analytics for our projects, we use a lot of software simulations and it is not so trivialized, calculating the tilt of the earth, how much sun is coming how much shadow is there, how much power is being produced! We do the layout with the tilt of the sun and the angle of the panels and the seasons, and we have software, which estimates the amount of power that is going to be generated.