Sep092021
Posted by:admin
Caspian Climate Conversations | Episode 3
Featuring Gagan Vermani, Founder & CEO, MYSUN
MYSUN is India’s leading rooftop solar company, primarily in the business of rooftop as well as distributed solar-powered solutions supplying solar energy solutions to residences and
commercial establishments, both onsite and offsite. Gagan is a veteran in the Indian solar industry and prior to founding MYSUN, he was the MD and CEO of Sunborne Energy, a company funded by General Catalyst Partners and Khosla ventures.
To tune into the recording, please use the available link here: https://on.mentza.com/circles/3344
Please find below a summarized transcript of this interesting conversation
How can solar rooftops and distributed solar be used in the agricultural sector?
Once converted to electricity, solar energy is just like any other energy, so anyone using energy is also a potential consumer of solar energy. All that is needed is an onsite shadow-free roof area or in the case of large buyers, they can buy power through open access from off-site locations. Within the agricultural industry, there are typical farming applications like solar pumps and other off-grid solutions. In addition, agriculture in India is a huge industry with a host of allied activities that can potentially use solar energy, like warehousing, animal feed, etc. which in essence are a huge potential market for solar energy.
Can you give us an example where you have done a solar energy installation at any step in the agricultural value chain and how did your customers benefit from it?
Godrej Agrovet is a large client of ours dealing in various agriculture-related business activities like animal feed and warehousing. We have done a 1 MW project for them in Rajasthan. This is an on-site project where we have set the system within their campus on the roof. This system is generating 1.5 Mn units of electricity every year amounting to annual savings of 12 mn INR at their current electricity tariff for close to 25+ years (i.e the expected life of the solar system). Consider that tariff rates go up, the savings are in fact higher.
Though the savings through the solar systems can be huge, so are the upfront investments which means a lot of customers would not be able or willing to make those investments. Considering this, do you also bundle your products and services with financing solutions?
Yes, indeed we provide multiple options-
- Fixed long-term tariff: We invest upfront and enter into a long-term power sale agreement with the customer.
- The customer invests CAPEX: This is typical for SMEs where companies like MYSUN do not want to take credit risk and offer long-term PPAs. Customers pay the initial down payment and balance over 3-7 years. Monthly EMIs are structured such that payout is less than the savings from the solar system, which translates into the solar system paying for itself.
Caspian works with companies in the agricultural sector across organic food, organic cotton, farm to fork, fruits and vegetables, etc. involving smallholder farmers. How would you explore options to work with these companies?
All that a solar energy system needs is shadow-free area to put panels. It is highly modular in nature and therefore whoever needs electricity, should explore the benefits of solar energy.
Reflect a bit on why an agricultural company would hesitate to implement solar roof-top solutions? Suggest what can be done to address those solutions.
Considering the tariff difference (traditional electricity costs of 7-12 INR per unit vs. 2-2.5 INR for solar electricity cost on a Levelized basis for 15-20 years life-cycle). Wherever upfront CAPEX is a concern, institutions like Caspian can play a role. We also provide financing solutions like the ones we discussed earlier. In the agricultural sector, there are many small players and it makes perfect sense for them to use the financing opportunities.
What percentage of the total electricity bill is being taken off using your roof-top?
It really varies depending on the current electricity consumption patterns of the users, and the size of the solar system they are using. Typically, the savings have been seen ranging from 20-60%, even 80% in certain smaller units where the contribution of electricity cost to the overall operational cost is very high. Apart from the financial savings, it is the green quotient that gives an edge to the small companies in a highly competitive market looking for suppliers dealing in clean energy.
