India almost came to a stand-still with a major power shut down affecting 11 states on July 30, 2012 and subsequently affecting 20 states on Aug 1, 2012 in the country. With the growth rate in India averaging at 8% in the last decade, the energy demand has been growing by 6.5% while the power supply has risen by less than 6% per annum. There has been a serious deficit in meeting the power demands in the country. While this may be true, India also ranks 6th on the hot list of the top 10, G20 countries for green energy investment. Green energy companies are a witness to that.
“The recent power shutdown is believed to be caused by the overdrawing of power. Building new power plants takes decades. Power management is complicated. Solar can be installed in months and can be the lowest cost way to take care of the peak power requirements,” says Kushant Uppal, Founder, InteliZON.
Kushant had recognized this potential even way back in 2006. The idea struck Kushant when he was still in the U.S at the heart of their startup ecosystem – Silicon Valley. With the solar products in the market being expensive, with bad design and being unreliable, Kushant decided to cash on the opportunity and introduce solar products in the rural area. “There was a social element involved in it. If it was not a commercially viable business then the social impact will be limited. With those thoughts and motivation, InteliZON started,” shares Kushant.
In 2006-2007, receiving funding from Emergic Capital and Venture East as seed funding, Kushant moved back to India and started InteliZON. Based out of Hyderabad, currently, InteliZON has 20 direct employees and 20 indirect employees (outsourced) who handle production of the products. InteliZON’s solar lamps are designed with LED light sources and Lithium ion battery combined with proper electronics to gain advantage over the lead acid batteries used in the industry thereby bringing down cost through technological innovation. They have bulb and torch lights with battery integrated in the bulb and torch light. Though the running cost of solar energy is zero, the upfront cost is 4times the cost of other energy efficient sources. Having sold about 75000 lights so far with focus on households and community, 95% of their sale has been in India while 5% has been from Africa.
Like any other company entering a new market with its products, InteliZON also had its own share of challenges. “Taking an innovative product to the rural market, we saw reluctance because urban people are not using this product. So the question was why they should use it,” explains Kushant. Fortunately, with the concept of solar and LED picking up due to power cuts, corporate companies are also investing in solar power as backup.
With India and Africa being their target markets, InteliZON uses several direct marketing channels such as village entrepreneurs, retailers, FMCG channels and a few light financing schemes to market their products. InteliZON is also involved in a pilot project in Africa called ‘Light up a Village’. On receiving funds from donors, a committee was formed to manage the funds in the village. All the households have been given a light for free and are required to contribute a sum less than the expenditure on candle or kerosene on a monthly basis to the village committee. It would be committee’s responsibility to use the fund to replace the batteries every 2years and even replace the light if needed once in every 5years.
“Commercially viability is improving. Not all are rushing for it but it has definitely become more affordable for more people than five years ago. Technology has helped us get here. That trend will continue as I see. Energy efficiency is picking up but solar energy industry may be one or two years behind in India,” shares Kushant. Over the next two or three years, Intelizon is expecting to grow to 10times their current size. “The quality and reliability and partnerships have been established. It is about tapping the right channels established for business. We expect growth in 2-3years,” concludes Kushant.
Even with all the glitches, India has managed a 54% increase in investment (Pew Energy report) in the green energy sector (with an investment of $4.2 billion) due to its National Solar Mission with a goal of 20 gigawatts of power installed by 2020. The next challenge would in setting better examples for the rural market to adapt to solar power sources.