From Rs 10 lakh to Rs 3Cr, Eco Mitram Solutions is shining bright with its clean energy solutions
With a vision to change the renewable energy market space in India and provide effective solutions for renewable energy sources and environment conservation, Eco Mitram Sustainable Solutions Pvt Ltd was established by four friends - Rituraj Sharma (28), Shashank Jain (30), Ravi Saini (30) and Anuraag Verma (30) - in Jaipur, Rajasthan in 2014.
The founders say the company also aims to meet the cut-throat demand for energy through sustainable solutions.
Today, Eco Mitram provides renewable energy plants without taking any money upfront. For this, it signs the BOOT (Build, Own, Operate and Transfer) agreement with its customers and does the installation, maintenance and servicing of the plant for the agreed tenure.
Eco Mitram also provides electricity generated from the plant to the customers at a discounted tariff through a Power Purchase Agreement (PPA). Apart from this, it provides services like operations and maintenance (O&M) and also maintains project portfolios.
The Jaipur-based venture was started with an initial investment of Rs 10 lakh, and now has an annual turnover of Rs 3 crore. The founders, who are MBA and BTech graduates, arranged the funds to set up the company through friends and family. Today, the company has a team of 12 members who are actively involved in its day-to-day operations.
The founders say a proud moment for the company was when it completed 1 MW rooftop project recently and also became the second runner-up at Elecrama Expo, 2018.
The market size
The National Institute of Solar Energy has estimated India’s solar power potential to be around 749 GW.
As on October 2015, India’s total thermal installed capacity stood at 195.6 GW, while hydro, renewable, and nuclear energy installed capacity was 42.5 GW, 36.5 GW and 5.8 GW, respectively. Rituraj says,
“The companies working on the Opex model (operating expenses) are very few, like Tata Solar, Ampuls Solar, Solar Town and Mahindra Susten, and they are not into segments with a capacity less than 500 KW. The market potential still remains huge as can be derived in terms of the renewable energy gap.”
The company says it differentiates itself from the competitors as it does not go below the production of 100 KW capacity, but claims it also selects projects that have a smaller capacity like 25 KW.
“This is because we do the analysis of the project on the basis of financial, technical and legal parameters,” adds Rituraj.
The company says it is associated with big names like Artha Energy and Sunwaves Power at present.
The impact of the business on the society has been manifold according to the founding team. They say the customers got access to clean energy and there was an increase in the awareness about the use of renewable energy systems. There is also an increase in the number of users day by day, who have an inclination towards using clean energy.
Management, customer acquisition
The company says it follows three strategies to gain customers - a segment centric approach, a location-centric approach and associating with EPC contractors, events and fairs.
Managing critical areas such as supply, cash flow and capital management has been made easy as the departments and the work has been divided, according to the founders.
Rituraj says, “We have developed our own processes to manage the key areas. I look into the area of planning and execution, raising funds, client acquisition, business development and investor relations. Shashank handles finance management, vendor management and client relations, Ravi deals in vendor management and operation management, whereas Anuraag handles technical issues and researches over policies and trends in the industry.”
According to the founders, there have been many challenges in their business journey. But a major issue has been the fossil fuels being exhausted continuously at a high pace, creating a huge demand and supply gap. Other challenges have been the rising electricity prices, which has been going up by 5-10 percent every year, and the lack of awareness about renewable sources of energy. The cost of setting up a solar power plant is also very high. Rituraj says,
“In the beginning, it was difficult for the business to cope up with the price fluctuations and keep a large inventory of PV modules and inverters. Debt raising has been another major issue. Although there is an extensive buildup around us, it is still a very tedious process.”
Because of high capital expenditure, the business also faced a cash crunch in the initial days. But with time, it created its own parameters to judge the investment capacity, risk and returns from the projects. Rituraj says the parameters are such robust and accurate that the current portfolio which the company manages provides them with fixed returns in the range of 12 to 16 percent.
The sector requires the government’s support in many ways says Rituraj. In order to import renewable energy products, the business requires positive fundraising opportunities from financial institutions.DISCOMS (Distribution Companies) can act as a role-playing party to secure RESCO (Renewable Energy Service Company) projects and then the defaults in payments can be curbed to a larger extent.
He says, “Although a few opportunities are available, the financial institutions deny us the loans or make the process so tedious and time consuming that the project’s parameters start changing the values, making the project financially unstable. So we expect a helping hand from the government in this.”
Eco Mitram says it plans to create and manage portfolios of solar rooftop PV plants of 500 MW capacity in the next five years and wants to take more steps to make solar energy affordable.
Rituraj feels that in order to become successful in any business field, the entrepreneurs should never compromise with the quality of their products or services. He says, “The real asset for any company is its customers and an uncompromising attitude on quality will help the company build good customer relations.”
(This story is published in partnership with the MSME Ministry to showcase success stories of SMEs)