- Capital worth INR158 crores was raised by 21 DRE enterprises, out of which 85% of funds were raised through debt finance and private equity
- Access to basic lighting and clean cooking methods are high on demand
- 46% of the DRE enterprises felt that they could leverage Central and State government support to deploy their products
- PLI schemes for solar panel and battery manufacturing received overwhelming appreciation
Clean Energy Access Network (CLEAN), a consortium of decentralized renewable energy (DRE) enterprises in India, has published a new report that shows that despite the Covid-19 pandemic, the sector did reasonably well in terms of raising funds to run their businesses. The findings also indicate that the Production Linked Incentive (PLI) schemes announced for solar panel and battery manufacturing have been warmly received by the sector.
DRE sector report findings
The fifth edition of CLEAN’s annual DRE sector report covers survey data from 79 member enterprises from across the country. This includes renewable energy manufacturers, service providers, distributors, financiers, civil society organizations, training institutes, among others. It covers the market trends, financial opportunities, technological advancements, policy developments and skills and training aspects from 2020-21 against the backdrop of Covid-19.
The DRE sector report shows that CLEAN member enterprises have deployed around 134,000 improved cookstoves, 7,000+ biogas plants and close to 200,000 units of solar lights, fans and solar home systems across India. Alongside the persistent high demand for basic lighting and clean cooking methods, an uptake in DRE-based livelihood applications was also found. More than 10,000 solar dryers, 3,500 solar water pumps and 5,600 other livelihood applications were deployed. Solar water pumps, solar refrigerators, and solar rice hullers and polishers were the most popular DRE applications under farm livelihoods. Whereas, solar sewing machines, agarbatti making machines and solar fences gained popularity under the non-farm applications.
The DRE sector report also highlights the increased intervention focusing on the well-being of rural communities. CLEAN members electrified 2,500 health centers in the last FY2021. “The DRE sector has the potential to contribute significantly to India’s climate change and SDG commitments. The sector however requires support in overcoming challenges like financing, value beyond product design, supply chain, business models, after-sales service, distribution networks and customer relationship.” says Svati Bhogle, President of CLEAN Network.
Challenges for DRE sector enterprises
On the marketing front, the DRE sector report findings show that an overwhelming majority of respondent enterprises (95%) stuck to community demonstrations of DRE technologies as a promotion tool. However, it reveals that 87.5% respondents faced challenges on the supply chain management front.
The findings around policy reveal that the benchmark costs for off-grid and decentralized solar PV systems have seen a consistent decline over the years. This, against the background of increasing import duties and GST rates has created a financial burden on both enterprises as well as end consumers. Lack of awareness among financiers about the benefits of DRE technologies vis-à-vis conventional options and the dearth of documentation of paybacks are a hurdle for enterprises to access finance. On the skills side, need for skill development and after-sales service of products was recognized as a dire need by 72% of the respondents.
“DRE businesses, aside from establishing themselves as effective energy sources for the rural, underserved population, also create positive social and economic impact. The 22 case studies published in this year’s report demonstrate the possibilities that DRE solutions can create at a decentralized level. Going forward, the challenge is to forge linkages and seek out opportunities that will simultaneously make the DRE space attractive for entrepreneurs and for investors.” says Rekha Krishnan, Chief Executive Officer, CLEAN.
The report also emphasizes on the importance of recognizing and certifying renewable energy-powered applications. It suggests that going forward, enhancing support to local manufacturing in renewable energy sectors other than solar – such as wind, biogas and pico/micro hydro – should be considered.
CLEAN is a non-profit consortium committed to support, unify and grow the clean energy enterprises in India. CLEAN has contributed to development and influencing policies for the DRE sector, bridged access to finance for its enterprises, facilitated technology innovations, assisted its members in accessing markets and built capacity through trainings.