Home 2019 Learnings of an Energy Entrepreneur

Learnings of an Energy Entrepreneur

by Roli Gupta
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For most of us living a modern lifestyle “roti, kapda aur makaan” is not enough anymore. We need “bijli” in equal measure. In fact, I’d wager, if we had to choose between “eating when very hungry” or “recharging when the battery is dying”, many will choose the latter.

I grew up in north India and vividly remember studying in candlelight because of the frequent power cuts. Many years later, it’s still a problem in many parts of the country, though lesser. So naturally, it seemed like a problem worth solving. That, combined with the desire to accelerate the adoption of sustainable living, gave me the inspiration to start Oorjan in 2015 ⁠—   a startup in the solar energy. What a ride it has been!

We were lucky to have timed many tailwinds ⁠— steep price reduction (250x in 40yrs!), favorable government policies (subsidies and electricity grid policies) and rising consumer angst about pollution and unsustainable living.

In fact, I’d wager, if we had to choose between “eating when very hungry” or “recharging when the battery is dying”, many will choose the latter.

We focussed on the household and SME rooftop solar needs. We realized that financing is a must to make rooftop solar affordable and ventured that data will help customer trust a new technology. At that point in 2015, neither was financing nor data were easily available. So, we had a good start ⁠— the market acknowledged our innovative approach with awards from Govt. of India, ADB Bank, Yourstory, etc. We used a combination of solar-IoT (a platform that we developed) and EMI financing to onboard solar customers, got some passionate early consumers, but did not really find a product-market fit. Thanks to being one of the few companies that raised external capital, we continued to experiment to find the elusive hockey stick growth.

We started with being a financing platform where customers could approach us to get loans for their solar purchase. Globally easy financing has been key to solar energy growth. India had a gap here, so we decided to start there. We realized the market was too small (2015-16) for being a financing only player.

So we expanded our scope, and moved to a marketplace model (2016-2017) where we focussed on educating the customers, using data to answer questions about whether the technology works and encouraged them to buy by making it easier to pay through installments. We realized that since everyone was a first time customer of solar panels, there was a huge anxiety in customer’s mind both before and after the purchase. More than a technology, it became a relationship sale with long sales cycles. They wanted the full service experience and a single neck to catch in case of an issue. Surprisingly, we realized that for motivated customers price was not the most important criterion, but it was top-3.

We realized that since everyone was a first time customer of solar panels, there was a huge anxiety in customer’s mind both before and after the purchase.

Even with great tailwinds, the customers were not lapping up the systems at good volumes. So with fewer than expected customers, it became fairly insecure supply ecosystem due to the huge competition for few good deals. We collaborated with the last-mile installers and launched a technology platform to help SMEs increase their solar sales. But it became difficult to build trust in a hyper competitive, undifferentiated environment.

So we realized (2018 – ) that to last long, we will have to be a full service provider or a solar installer, where all the differentiating features of our offering (IoT, finance, technology platform) should be the enablers rather than being the trump card. This path allows us to focus on building longer term personal relationships with the customers, housing societies, etc and provides a better path to larger projects and better customer experience.

I learnt many things the hard way by spending 4+ years as an entrepreneur, and almost a decade in energy. These are not insurmountable obstacles, but help to set the right expectations when operating in solar, and more generally energy world.

Firstly, and most importantly one needs to remove friction for the buyer. A frictionless user experience removes anxiety for the buyer. Which means a scenario of ‘many stakeholders’ is a deal-breaker. Notwithstanding, the government’s right intentions, it’s a machinery that does not move quickly or predictably. The problem gets compounded in power sector because electricity is a concurrent mandate, and states and center are don’t often working in synchronization. It doesn’t help that electricity has been a big vote-bank issue in India forever. Now compound this with housing societies management committees for solarizing societies, and suddenly you realize very little is in your control. As a corollary to this, we realized that in such an environment it’s difficult to outpace the market. So if the market does not chance upon a hockey-stick growth path, neither can you.

Secondly, know whether your product is a pain-killer or vitamin – both sell, but differently. Residential solar is a high-priced, vitamin. Of all the purchases in the same price bracket (Rs 1-5 Lakh), solar falls low in the priority list. Although customers desire was genuine and financing available, we have to compete with second cars, vacations, jewellery, wedding expenses, kid’s coaching expenses, etc. For businesses, the economics (and purely economics of a 3-4 yr payback) is more convincing and hence good solar adoption is happening in the sector. Even better adoption is happening at corporates, who have CSR/green mandates to purchase green power with budgets allocated. The economics of the latter, justifies the long and personal sales process.

Residential solar is a high-priced, vitamin.

Lastly, as almost every startup entrepreneur eventually realizes, patience is key. Stuff happens, but often not as fast as one wishes.  Each of our pivots took more than a year. I realized during each of the pivots that we were giving up a “moat” or a sustainable advantage that could make the company highly valuable. But considering the bleak investment outlook, it made sense to do whatever it takes to survive and build out the company differently. These are hard realizations and part of what one signs up for when venturing to build out a company.

We are growing well having served hundreds of customers. I passed on the baton to my co-founder to run the ship, and hopefully with the time that we have bought, thousands more solar roofs will be enabled by Oorjan, tons of carbon offset, and a good outcome for everyone’s sweat and tears.

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