Solar Power is Real!
We have our ways to heat water, use electricity but we probably take all of this for granted and if we lost them we would probably panic. Solar energy is the best alternative we have these days. This is what Azure Power talks about. YourStory had a conversation with Inderpreet Wadhwa ,the founder of Azure Power, where he discussed his entrepreneurial journey.
Please tell our readers about Azure Power?
Azure Power is an independent solar power producer and the first private sector company to implement a megawatt scale grid connected solar photo-voltaic power plant in India. Azure Power's team has decades of experience building industry-leading companies, executing complex infrastructure projects, and financing high-growth enterprises. Azure Power creates innovative solutions to deliver solar energy to its utility, government, and commercial customers. By providing solar energy as a service, Azure Power manages entire project process for their customers, by reducing the upfront and ongoing operational costs and management. Azure is implementing several MW scale solar power plants across various states in India. The plants, once fully operational, will produce clean energy; result in avoidance of CO2 emissions and supply regular power to a large number of households.
What Business Idea inspired you to start this venture?
The market for solar power worldwide expanded by over 6 gigawatts last year. Within India, last year large scale solar power generation expanded by less than 5 Mws. Azure Power is the developer and owner of India’s first privately operated, utility scale, solar power plant in India. The energy from first project in Awan, Amritsar, is enough to power approximately 1,200 rural homes, while eliminating as much CO2 pollution as 530,000 trees do annually.
How many people take benefit from your venture?
We create solar power solutions for customers who understand the importance and value of clean, renewable solar energy. Azure offers clean and affordable solar energy to our customers based on the "Solar as a Service" model. Azure designs, finances, executes, operates, and maintains high quality solar power plants for long term periods (15 – 25 years) and assures long term energy pricing and security. Our customers; whether utilities, governments, or commercial entities, enjoy all the economic and societal benefits of renewable power without having to own or operate power plants.
Azure Power basically targets three audiences:
What are the qualities of your services?
Azure power provide power that is :
What according to you makes you different from others?
We incur the cost of setting up power plants costing seventeen to nineteen crores currently per MW capacity. We also bear the cost of operating and maintaining these plants over long term periods fifteen to thirty years. The customer pays per unit charge based on actual consumption on net thirty terms and the cost to consumer varies based on parameters such as availability of land, duration of the PPA, and incentives applicable.
When governments, utilities, and commercial customers work with Azure Power, through Solar Power Purchase Agreements (SPPAs), they work with one company that controls the entire execution process, without third party reliance. Some of the companies in the market sell systems outright, burdening consumers with high upfront cost of system and AMCs or O&M headaches. With Azure the consumers only pay a predictable energy bill based on consumption. Currently while is there is a lot of interest in the solar sector in India, there are no private companies with MW scale grid interactive experience on the ground in India and who have embraced solar as a service model.
At this point of time the biggest differentiator is that we are the first IPP (Independent Power Producer) in the solar sector and therefore no one else has the experience we have!The Solar energy market will grow to be a huge market where many companies will be successful at building solar power plants. Azure Power looks forward to having competitors who can together build the solar power sector in India. We believe that if we have many successful participants we will increase the opportunity for all companies and provide better, cleaner power to India more quickly.
Tell us how it all started?
Over the past fifteen years as I built several profitable technology ventures in the Silicon Valley, I interacted with several successful entrepreneurs and academicians (while pursuing MBA at Haas School of Business, UC Berkeley). I realized that I had the virtue and skill to create sustainable and profitable ventures through creative business models and the ability to ensemble top talent. With this realization it dawned upon me that I should start my next venture to have a direct and positive social impact with respect to improving the livelihood in parts of rural India. I decided in early 2007 to travel to India and critique various business models, the first of which was around micro finance and another around basic service provisioning using mobile handsets. As I researched, I noticed people in rural areas struggling with basics of food, water and power. Given my undergrad in electronics engineering, passion for solar power development and Indian government policy impetus around rural electrification it was the most obvious sector to pursue. I noticed that most programs were target around lighting one rural household at a time with solar lanterns, small home lighting systems etc. Service becomes a big issue with such a business model. I identified distributed medium scale solar power generation to meet aggregated demand in rural areas as key to energy efficient economic development almost a year ahead of national initiatives in MW scale solar power generation in India. From thereon there was no turning back and I took on the task to prove the model of distributed solar power generation at the tail end to enhance the grid as well as the livelihood of communities in rural India. I had to invest some of the initial capital from my savings, followed by angel investment by friends and family, followed by multiple financing rounds by top tier clean technology investors such as IFC, Foundation Capital and Helion Venture Partners. The business has typical market rate returns.
What challenges did you come accross in your journey?
Financing large scale Solar Power Plant in India in an uncertain economic and financial climate was one of the biggest challenge I faced. I overcame this challenge through persistence and a sound and bankable business model.
Any mistakes so far?
I have built several technology businesses in the past. I underestimated the amount of time required for getting all permits, learnt the hard way and managed under budget with prudent spending approach.
What is in the future of Azure Power?
Azure Power will play a central role in ensuring that India catches up to other countries and harnesses the massive potential for generating power from the sun. The coming years will see a massive expansion in the supply of energy generate from the sun in India.Azure Power has already inked agreements with Governments of Gujarat, Haryana and Karnataka and is also in talks with State Governments in West Bengal, Maharashtra and Rajasthan. We have 1MW running and expect to get to 100MW in next three years. We believe that, in line with the National Solar Mission, up to 1 Gigawatt (1,000 MWs) of capacity will be brought online by 2013 and 20GW by 2022.
Any moments of recognition?
Our work has been highlighted in leading global and domestic publications such as Wall Street Journal, Financial Times, Business Today, Economic times and others. Commissioning of India’s first commercial MW scale Solar Power Plant on build/own/operate basis is one of our biggest achievement.
What words of advice would you give from your experience?
One should work on solid fundamentals and business plan and be persistent with razor sharp focus. Lead by example and create a vision for a billion dollar business. The market is there!
YourStory wishes Inderpreet Wadhwa and Azure Power all the best for their future.