The surge in global power demand and consumption has highlighted the importance of renewable and sustainable energy sources. Owing to the Indian government’s promising initiatives, schemes, and programs, solar power generation has increased in recent years encouraging experienced businessmen and startups to invest in solar energy businesses and reap huge profits.
Before we dive into all the compliances, formalities, documentation, and industry research, we need to figure out the type of solar business that would be ideal according to the business needs as investment in the solar business would vary depending on the type of solar business and organization wishes to set up.
EPC stands for Engineering, Procurement, and Construction. Solar EPC companies obtain the necessary solar materials from a manufacturer, perform engineering work, and provide customers with installation and after-installation services.
Solar knowledge, solar product knowledge along with a great network is what are of utmost importance to establishing an EPC business in the solar industry. This business might require less investment but requires more skilled workers, a network and an experienced team.
Manufacturing companies are those who produce these solar items that are further bought and used by the solar EPC businesses. This usually consists of the materials that are required for solar projects.
To avoid the hassle of setting up a factory and manufacturing the products, some businessmen choose the Original Equipment Manufacturing (“OEM”) route. OEM is a process where another company for manufacturing the products utilizes their own machines, skilled workers, and factory.
A business owner embarking on a major project in the solar industry might require some advice from an expert in the said field. They appoint a solar energy consultant in such cases to oversee the said project.
Solar consulting companies provide detailed information and knowledge to suggest solar solutions to people. These companies present a golden opportunity for those who are passionate about green energy.
As aforementioned, there are various types of businesses that an entrepreneur or start-up can delve into. However, selecting two types of businesses simultaneously has proven to be risky in the initial stages of establishing the business. To understand the market better, market research should be conducted to weigh the pros and cons and gain a better perspective of the industry. Following are the few business sectors wherein the solar business can be established:
The entrepreneur has to invest a substantial amount of capital in this sector. A business in this sector is handed the responsibility of production of goods and accouterments in the solar business. This sector requires a significant investment as it necessitates the purchase of machines to manufacture the product, the land required to set up the factory, and the wages of the workers, among other things.
Repair, maintenance, and installation are all part of this industry. One will need solar expertise and a technical team to complete duties like maintenance and installation of the solar plants.
The marketing industry requires a high level of competence rather than a huge financial investment. However, by employing website creation and digital marketing, you should be able to generate leads and turn them into clients.
These businesses handle the entire process of selling solar systems, including obtaining leads, qualifying them, and conducting in-home or virtual consultations.
The business investment will vary depending on the type of solar business chosen. A solar panel or inverter manufacturer would demand a larger investment; a solar installer business would require a smaller investment. If taking into account the average amount of investment that would be required to establish a solar business in India, then it would be as below:
|Type of Business
|Solar power plant installation
|INR 4,00,000 (four lakh) and above
|Solar power plant manufacturing
|INR 5,00,000 (five lakh) and above
|Solar power plant sales
|INR 1,00,000 (one lakh) and above
|Solar power plant maintenance
|INR 50,000 (fifty thousand) approx.
The next step is to legitimize the company by getting it registered and authorized by undertaking company registration. A company can be registered under the Company’s Act, 2013 in various forms including, without limitation, private or public limited, proprietorship, and limited liability partnership. It's critical to understand the limitations and capabilities of each type before establishing a business.
Following are a few of the documents, certificates, and licenses that are required to get the company registered:
Because the government is already making great efforts to encourage as many people as possible to use solar energy, it is critical to keep up with the ever-changing state government's laws, rules, and regulations.
Since it's possible to start a solar energy business in a variety of ways, each sector portrays a lot of prospects for growth, and expansion and the potential to generate profits. As a result, each business model necessitates multiple registrations and licenses required for their business. However, some mandatory registration that applies to every business model to establish a solar energy business in India includes the following:
Solar certification verifies the quality of Photovoltaic ("PV") modules and confirms that the company has followed international guidelines. Demonstrating the quality of your PV modules is important not just for the industry, but also for comforting your clientele. Clients might expect a return on their investment in your goods if you can demonstrate that your modules meet solar energy requirements.
The Bureau of Indian Standards ("BIS") and the Ministry of New and Renewable Energy ("MNRE") regulate PV modules in India under the compulsory registration scheme. The PV module must be tested according to the specified standard under the given scheme. The product must pass all testing requirements before the manufacturer may offer it in the market.
Considering the ample rooftop space, government schemes, and sunny days in India, the country is witnessing a solar boom and will experience a solar revolution in the coming years.
The Indian government is enthusiastic about solar energy and is taking a variety of steps to promote it. The Indian government has implemented a number of policies to help the solar industry grow. The government plans to lower the capital cost of constructing a solar power plant, making it more cost-effective for young and inventive entrepreneurs to invest in the solar industry in India. In today's world, the solar business in India is one of the most profitable. The solar energy industry's profitability is currently at an all-time high and will continue to be so in the future.
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