The rooftop solar enigma
Solar rooftop EPC companies are closing down and large EPC players are shutting down their rooftop EPC divisions, according to a report in a national business daily. Let us analyse the reasons for this, and also the possible way forward.
The first obvious reason is competition - what with roadside vendors also becoming solar EPC players, connecting modules, cables and inverters on the go, and doing so at margins that satisfy an individual contractor's needs. Such a contractor has no overheads, no engineers to pay and with very little accountability. And, the established players cannot compete with him.
Another reason is that we are reaching a plateau stage in rooftop segment, largely because the major rooftop customers have already adopted solar. There are no significant repeat customers/repeat business. And, as more customers adopt solar, the available market keeps shrinking. The repeat business may happen after 2-3 years when storage becomes cheaper and these have to get integrated with the solar systems.
One thing that EPC players keep forgetting is the cost of servicing rooftop customers. Such customers are remotely located, and established players have limited/no parallel customer support infrastructure. Service calls are aplenty, and serving the rooftop customers is a nightmare. While projects are won at wafer-thin margins, the cost of serving a customer a visit is pretty high. Some service calls take away your profit, and more service call over a longer duration start hitting your bottomline. And, this becomes acute when the customer is a subsidy-influenced one. The paperwork and follow-ups to collect the subsidy is significant.
And, as I have been shouting from rooftop, the rooftop solar EPC business is a consumer market and has to be dealt as an FMCG business. It cannot be localised. It has to be standardised. It has to have a large network for sales and support. It needs national level advertising, branding, marketing. It needs to continously innovate.
But, question remains - Why do it for a one-time customer?
Solar Energy Expert.
5 年In my view, nobody is harming this industry except the players themselves since beginning. Even in vegetable market, all traders sell potato at same rate grossly but in Solar any rate is possible. Players are ready to invest a part from their own pocket to kill the competitors. Hence solely blaming the government and its policies is not going to help. Be united and see how the rates are stabilized for everyone. There is huge opportunity in Rooftop sector.
IIT,Co founder,RE,Energy Storage and MicroGrids
5 年Cmon,we are on the way to become a 5 trillion USD economy.So what if power supply issues push demand down,so what if auto sales are down,so what if farming is in distress,so what if there is drought in half of the nation,so what if unemployment is at a 45 year high,so what if exports are down,so what if bank NPAs keep going up,so what if MSMEs are in very bad shape.Things are fine.India keeps shining.