Solar panels are one of the most demanded components in India. Humans have realized the ultimate power the Sun can offer, thanks to the technological developments the world has witnessed. The Sun up there in the sky is one of the largest sources of energy that humankind can ever witness. Called the burning ball, the energy of radiations from the Sun possesses energy packets that can fuel our whole planet. Let’s check out how to start solar business in India below.
Solar energy is the root cause of all the energy existing on the planet, either directly or indirectly. This evergreen and renewable energy can also be stored and utilized as per requirement using solar panels. Therefore, this concept provides an excellent opportunity for people with the capacity to deal with solar panels. Given the present-day scenario where electricity is short of and is critical to be produced, solar power is inevitably the future of energy on the planet.
Consequently, countries lacking earthly energy resources have opted for solar power and used the most abundant solar radiation. The first usage of solar power dates back to 2010, but the market was tiny and lacked susbisidial support. Since then, researchers have extensively carried out and eventually succeeded in harnessing the energy obtained from the Sun.
Therefore, it is expected that by 2030 the world will witness the highest rate of solar energy in producing electricity instead of natural resources, thanks to the government for extending subsidiary support. Starting a solar business in India would be comparatively more profitable in India because it is a tropical country with solar radiation at almost any point time throughout the year.
This can be an important factor in drawing investments from various companies to establish the solar business in India. The scope of solar business is vast in India, especially in the equatorial region receiving the highest amounts of heat. Thankfully, India has a high population resulting in excess power consumption. All such factors contribute to the growth of India’s solar business, giving rise to new investors.
How to start solar business in India?
Money needed to start a solar business in India
Starting a solar business in India can be best begun by manufacturing solar panels. Therefore, the most profitable pattern in the initial stages is to start with a B2B business, selling solar panels to other companies and not to end users or customers intending to put up solar panels in their homes. To begin with, for a B2B business selling solar panels, the initial investment required ranges from 4-6 crores as a minimum. It can even reach ten crores if started on a more professional front.Â
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The beginning of the business might be progressing slowly with meager profitability. Still, once the right kind of potential clients is approached, the growth of the business will scale to another level altogether. With a group of around 7-10 potential customers with broad scope and long run in the business, the business would run smoothly without any adversities.Â
Starting a solar business in India
Before beginning a solar business, the various kinds of businesses involved in it must be studied. There are three wings of the business, namely marketing, manufacturing, and service sectors. The works are divided into these categories named solar products, their accessories, and the making of applications that use solar energy to function. Solar products include manufacturing products like panels, solar-powered calculators, etc.
At the same time, the accessories would be the items required for the actual panels to be smoothly installed and work in optimum conditions. The third kind of business can be directly manufacturing the end products like solar-powered household appliances, solar-powered fans, etc.Â
Apart from being a manufacturer, one can also be a dealer where the need for one company or individual is communicated to a dealer, and the dealer gets the solar panels or anything they require according to their preferences and make it available to them, making money out of it through commissions. For being a dealer, one has to be fully aware of the demands of the consumer and better have connections with the manufacturers to obtain the required things at a relatively lower price to make profits.Â
Starting one’s own solar company
The basic process of beginning a business begins with choosing the best name for the brand. The name selected must be simple, unique, and intriguing so that hearing the name must interest people to know about it. The next step is registering the business as a sole proprietorship, partnership, or LLC, depending on the number of business partners and investors. This step is followed by taking the business’s license and legalizing it.Â
The registrations required primarily are the Registration of Establishment to mark the beginning of the business, followed by the registration for GST to avoid unnecessary taxations. The following essential registration is an ISO certification which marks the quality of the business goods. ISO 9000-2015 is a preferred quality that meets the standards. The last registration is done to officially register the company’s trademark and mark it as an individual professional trading company.
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The next step involves is to get a business permit. Again, as the business involves electrical instruments and technology, the licensing or business permit process may demand the collaboration or presence of an electrical engineer or contractor. But, again, the government’s particular interest in the solar business on both central and state levels adds up to ease the process.Â
The business can be solar; still, there are many types to do in the solar business. The various ways in a solar business are selling panels, being a distributor of manufacturing materials, being a dealer of solar panel establishment on rooftops, etc. For any business with solar products, the government offers subsidies and benefits for the expenses incurred by the business provider. This is an initiative the PMO took to encourage a healthy culture of establishing more investments and avoiding the power shortage.Â
Is solar a good business to start?
Yes, starting a solar business is always good. The extinguishing of limited natural resources is a massive worry for humanity. Still, the alternative of solar power has been slowly introduced to all parts of the globe, recently to India. The business is mainly involved in solar products like solar panels and their manufacturing, solar plants as a large-scale industry, being a solar dealer establishing solar connections on rooftops of customers, etc.Â
The initial investment required to begin the business might be higher due to the licenses required to be taken and the equipment purchase. Once the business is set up, the problem is to find the right clients, which can be tedious and emotionally draining. But once you obtain potential clients who can purchase regularly, there is no scope for loss in this business.Â
The correct issues come with the quality we can ensure the clients. The beginning of the business itself requires taking ISO registration, which ensures no compromise on quality. If all the quality is tested and compromised by quality check officers, the business’s reputation will be damaged. The business is always supported and backed up by the government of India as PMO-initiated subsidiary allowances for solar manufacturers and businesses. The scope for loss in this business is barely minimum, but the quality of goods and services offered satisfies customers.Â
Profit margin in solar business in India
The beginning of the business requires funding, but still, the initial investments are subsidized by the government, helping to save from the initial investments around 5-7%. The business, once established, can run long and healthy as it is booming and evergreen. The margin obtained on average can be obtained as high as 25-28% of the initial investment. The investment required can range between 10-15 crores, depending upon the scale of business and investments available.Â
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The margin of business profits can depend on the quality of the services offered and the brand’s reputation. Top companies grossing from the last ten years or more have a margin of up to 30%, with an efficiency of 23% on average. However, achieving efficiency and considerable profits will take time because of the existing companies and the intense market competition.Â
Making money in the solar business
The solar business can offer many opportunities to make money, depending on how one chooses. Beginners stepping into the business for the first time are advised to begin with a business-to-business firm where the transactions are only between businesses dealing with solar equipment. The reason for this choice is to take space to learn the actual progression of the business and the way of dealing with people. The actual earnings are from the transactions made between businesses exchanging solar equipment.Â
Excluding this, the other direct businesses in this field include manufacturing solar equipment, selling solar panels and other solar-powered goods and accessories, etc. These are, however, done on a considerable scale and have colossal market competition. The best business practice in the solar business is selling solar panels and dealing with the installation of solar panels on the house rooftops as a combined business. This is more profitable compared to just dealing or selling.
The additional benefit, however, is obtained by the subsidy scheme provided by the PMO. Another best alternative to make money from solar businesses and companies is trading solar company stocks. If there is enough financial support, one can be encouraged to buy stock shares of leading solar companies like Sun, LG, and other giants whose margin has been consistent right through the competition. Finally, net metering is another concept that can help in earning money on a passive note.
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A network connects the plants generating electricity using solar panels, and the excessive power produced is diverted through this channel to a network grid which can supply this power to places requiring supply. Thus, energy conservation and profit maximization can be combinedly and achieved using net metering.
Range of earnings from solar panels
Selling solar panels and manufacturing are the main ways of earning from solar panels. The manufacturing of solar panels is a bit tedious and requires investment, but it can give significant margins and returns once established as a reputed firm. The margin obtained can be as high as 25% on the initial investment. Leading giants make almost half their annual turnover from selling solar panels and goods using solar power.
Another way of earning from selling solar panels is a better and more straightforward process without much tedious work. The only problem with this method is getting clients regularly. Initially, one has to strive hard to get clients, but the process becomes relatively easy after developing contacts and building a quality circle. The income from solar panels depends upon the capacity of the panels to produce electricity, measured in kilowatts. Greater the kilowatt capacity, the higher the income earned.
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The average income range from this can be around 30,000 to 1,00,000 INR, depending on the sales and the capacity. The money made from selling and manufacturing solar panels depends upon the material quality, the number of clients, and the dealings. This can again be further profitable by the governmental schemes and subsidies providing empowering solar technology as a next-generation energy fuel.
Conclusion
The latest technologies are actively replacing the extinguishing natural resources, and solar power is the biggest of them all. Solar power finds applications everywhere electricity is required. This gives vast scope for business-minded people to invest actively in the stocks. The business is slow only in the initial period but is quite profitable once the business settles in a reputed space.
The increasing power consumption of the country gives rise to a great demand in the market for solar-powered devices, or solar panels. Metropolitan cities have already been using solar technology to power their infrastructure. During the last decade, the solar business has increased. It is always the right time, to begin with, for this business, and one has to plan their business in the long run to expect more significant profits.
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