Suryodaya Scheme Opportunities and Impact on Various Sectors

The government’s decision to install 100 million solar plants in Indian households would significantly boost the energy sector. This aligns with the Indian government’s global aspiration of “One Sun, One World, One Grid,” an initiative proposed to connect the electrical grids of various countries, powered by solar energy.

While under the Suryodaya Scheme, the government would largely promote the indigenous business of the solar energy value chain, it also creates opportunity for global players to be part of the value chain. This article mentions companies/sectors that can benefit from this scheme as well as find investment and entrepreneurial opportunities.

• Solar panel manufacturing: Most of the raw materials and panels used for solar plant development are imported from China. The government aims to decrease reliance on imports and promote Indian investors and encourage entrepreneurs to build solar panels.
• EPC planning, installation, maintenance, and cleaning: Not every houseowner is familiar with maintaining and repairing solar panels and plants. Thus, entrepreneurs, companies, and startups are likely to play a crucial role and may find business opportunities in some or all the following activities:
  1. Solar planning: Identifying households suitable for solar panel installation.
  2. Clearance: Getting necessary clearance from utility providers for installation.
  3. Physical installation and checks: Installing panels and battery packs, and integrating them with utilities and home energy management system.
  4. Maintenance and cleaning: Maintaining and cleaning at-home solar panels.
• Complementary technology manufacturing:
  1. Li-ion battery: Though Indian entrepreneurs have recently started developing Li-Ion battery packs and battery management systems, India does not have the lithium reserves and capabilities to develop Li-ion cells at a commercial scale. Entrepreneurs may look to indigenous manufacturing of Li-Ion cell, assembling battery packs, and developing battery management systems to optimize India’s power conditions.
  2. Grid integration and home energy management software: Developing software to optimize the energy and cost is imperative, specifically to suit Indian climatic and maintenance conditions as well as to meet the financial expectations of regional customers.
  3. DC cables, equipment, and sockets: Energy output from the solar plant is DC in nature, which is later converted to AC through inverters, for feeding into grids or running house appliances. Most small appliances used at home, e.g., LED bulbs, tubes, mobile phone, USB devices, and TV, use DC power. Even fast charging of EVs is carried out through DC.
  4. Steel frame manufacturing: Solar panels are mounted on steel frames, providing a considerable boost to the manufacturing of large or small prefabricated or custom frames.
• Financial institutions: Apart from government funding, banks, NBFCs, and cooperative financial societies would find opportunity in offering credits for solar panel installation.
• End of life and aftermarket: Entrepreneurs may find opportunities in dismantling, overhauling, recycling, or destroying panels, batteries, and plants. The aftermarket for solar plant components could be an area where entrepreneurs find opportunities for a new business.
• Employment and job market: The renewable energy sector, including solar power, can create jobs in manufacturing, installation, maintenance, and related services.

Companies operating in the following sectors and value chains may lose their market share due to competition for solar energy implementation.

• Coal and oil industry would see a gradual shrink due to the Suryodaya initiative. Currently, more than 75% of Indian electricity generation rely on coal-based generation and is a huge value chain employing millions of workers in coal mining, pulverizing, cleaning, transportation, and power generation.
• Traditional energy providers relying on fossil fuels may find increased competition and market pressure.
• Non-renewable energy equipment manufacturers would see demand weaken over the years.
• Utilities would find competitive pressure from household customers with the solar initiative.

However, the negative impact on the sectors mentioned above would be gradual and not uniform. The speed of change depends on the speed at which the Suryodaya scheme is implemented, market conditions, entrepreneur’s zeal and risk-taking ability, and pace of indigenous technological advancements. It is important to understand that despite achieving economies of scale, per unit production of solar energy would be costlier compared to the overall per unit cost electricity produced, transported, and distributed through fossil fuels.