The Shocking Solar Goldmine that is Making India an Energy Superpower ? : Solar Square Podcast

Elon Musk actually mentioned once that if he is given a small area in Nevada, he will be able to power the entire United States. According to power, the entire United States with solar panels, it would take a fairly small corner of Nevada. It's the only need about 100 miles, about 100 miles of solar panels. It's probably the entire United States. Modi ji always says that Indian families can make money out of solar and it will act as a passive income. India will be the third largest economy soon. Now, the bill of electricity is increasing for zero. How can an Indian family make passive income with solar panels? So if your family needs 300 units of power, you can put up a power plant that produces the 300 units of power such that your bill becomes zero. Shia, you mentioned that the government is extremely bullish with solar. And can you tell me that these government schemes, how is the Modi government trying to make solar viable in India and how is that going to have a lasting impact on this playback period of three to five years? Today, China controls 80% of the world solar panel supply and every country is looking at a China plus one sourcing strategy. Nobody wants to be dependent on China. Shia, today what is the cost difference between an Indian solar panel versus a Chinese solar panel? So there is a significant cost difference. These hotspots can lead up so much that it can actually also lead to a fire risk. Fire risk and a fire can be caught up in your solar system. And innocent families who have never bought a solar for themselves, they can make the wrong sort of mistakes. Two things that disappoint me are number one. Even though we are sitting on something more valuable than oil, we think solar is not a big deal. And secondly, the investor community's extremely bullish on solar, but they don't speak about it much. Probably they are hiding there. You know in the business world they say that if you want to make a lot of money, it's not made in flashy businesses like a restaurant or a movie. It's actually made in the most boring businesses that you can think of. And the solar sector is one such sector which may appear boring, but this sector has huge gaps where you can build a business very, very quickly, especially in India. And this episode is a conversation that we had with the founder of a wonderful company called Solar Square. And Shreya gave me a complete breakdown on how to find gaps in the solar market. What is the economics of the solar industry? As a consumer, how much investment do you need to make in solar panels? How to make your electricity bills go to zero? And even the indoor China tensions in the solar industry? And this tension by the way can bring you closer profits if you know where to tap in the solar sector. In fact, solar square has tapped into one of these gaps which has turned it into a hundred crore company. For those who don't know, solar square is a residential rooftop solar company and they've built this business over the past nine years. So what you're about to listen to is nine years of wisdom put in just 90 minutes. And I just hope you learn something valuable from this episode. Elon Musk actually mentioned once that if he's given a small area in Nevada, he will be able to power the entire United States. And when I had a look at that drill, I was mind blown. I was so mind blown that I actually fact checked Q's in such a mess. I'm going to be like, and turns out with just 25,000 square kilometers, you can power the entire United States. And India consumes about 40% of the energy that US does. So if we have about 6,000 square kilometers of solar panels in India, we could be energy independent. We don't need to buy oil. So inflation will not happen in India uncontrollably. And we could go into become a solar super power. And then I read about international solar alliance only to understand that we've been blessed with more sunlight than perhaps any other country on this planet, which gives us unlimited access to energy. And yet, two things that disappoint me are number one, even though we are sitting on something more valuable than oil. We think, yeah, solar, not a big deal. And secondly, the investor community is extremely bullish on solar, but they don't speak about it much. Probably they're hiding their treasured knowledge. So today in this podcast, I want to uncover the deepest secrets of solar energy so that people understand what kind of an amazing revolution this is. And more importantly, I always say that, you know, the government is the Godfather of the market. So just like the God father, if the Godfather loves you, no matter how small you are, you will go on to become big. And if the Godfather doesn't like you, no matter how big you are, you'll be down to ashes. And the Godfather, as of today, absolutely loves solar. So which is why I want to go deeper and understand that's the agenda for today's podcast. If you can also throw light on the businesses that people could start in this sector, that would be amazing because I know for a fact that this is going to be the next big thing because this is literally India's opportunity at something more valuable than oil. Does that make sense? Absolutely makes sense. And I think you said that India is blessed. I think there are every country has a few disproportionate advantages and unfair advantages. I think solar, the amount of sunshine India gets, nobody ever thought much of it, that it'll one day become that unfair advantage. But absolutely in the wake of the solar revolution, the amount of sunshine we get is an unfair advantage that our country will, by the way, be reaping in a big, big way. Can you put this to numbers? Because all of us know that India gets an enormous amount of sunlight. but very few people understand what we can do with that sunlight and how is that at treasure? So, Solar Square is a residential solar company, so let's look at this unfair advantage of amount of sunshine in India from the context of a homeowner, a homeowner who is putting a rooftop solar system on his, forest family, to power his home, his air conditioner appliances etc. Now India gets 300 days of sun, it's one of those few countries that get that amount of sun. And even though some people in this audience may feel that in Chera Punjee, there is a lot of rain in Bangalore, there is a lot of rain in Bangalore, there is a lot of rain in Bangalore, there is a tropical country, where from Ladakh to Kanyakumari, from North East to West, everywhere India gets sufficient amount of sun that any place in India produces more power than an average place elsewhere, you know, in most other parts of the world. Now let's look at Germany. Germany may 12% homes have solar, so one in every 8 homes has already adopted solar in Germany. Germany does not get this much amount of sun, in fact for the last 2-3 months of the year, towards the colder parts of winter, Germany hardly produces, you know, the solar systems don't produce much power, right? So let's put it in numbers. 1 kilowatt of rooftop solar in Germany will produce a thousand units of power per year. The same 1 kilowatt of solar in India will produce roughly 1400 units of power per year. So we get 40% more power from the same capital investment that we do in that 1 kilowatt solar, right? So that's one unfair advantage of India that we produce just lot more power. Similarly, we produce more power even even in the US, we're already 5% homes have solar. Or, you know, a little bit more than even Australia, we're already 35% homes have adopted solar, right? Visavine India, despite generating so much more power, only 1% Indian homes have so far adopted solar. So India has roughly 10 crore urban independent homes and off these urban independent homes, only 10 lakh, that is 1% homes have adopted solar. So why is that a lot of energy in the US? So I think every country has had a journey of solar revolution. The revolution in the US started about 10 years back, revolution in Germany started about 5 years back. The German or the European solar revolution was actually accelerated with the gas sanctions that Russia put. So peak in the peak of winter, Russia put gas sanctions on countries like Germany, where all the houses were cooling about heating their homes. During peak winter, where it would snow, heating is a very, very big power gas law, but homes were being heated through gas based heaters. When the gas sanctions were put on Germany, people had to switch to using electricity for heating their homes and that led to very, very high increase in electricity bills for these families. And that is when the German solar revolution really got accelerated so much so that in 2023 after the Ukraine and Russia war and once these gas sanctions were put, German households put as much solar in one year, as was put in the 10 years before. So that is how the acceleration in Germany happened in US. It was through a lot of policy support and then of course sunny states like California adopted a lot of solar. Now let's look at India. Now in India, the residential solar revolution is starting as we speak. The commercial solar revolution Ganesh is already quite big. So every large commercial business public listed companies, everybody is already adopting solar and all businessmen in India know that if you have a factory warehouse, school, college, you should put up solar because commercial electricity rates are also high. And in commercial establishments solar is of a bigger size. It will be 50 kilowatt, 100 kilowatt, even a thousand kilowatt if you know you're a Johnson and Johnson factory or you're a large automotive factory etc. So the economics of solar was good for commercial establishments since 2014, 15. So there has been no subsidy in India for commercial solar since 2013. But the economics of solar is such that if you are looking at a large, you know, 50, 100 kilowatt, paplan for your factory or school, college any commercial establishment, you would break even the payback period would come in three to five years. And solar as a asset produces 25 years of free electricity. So one time investment you recover all your investment in three to five years and then you have 22 to 20 years of free electricity. So the economic case was obvious. Also businesses, cooperates, they are used to making capital investments. They are used to investing in infrastructure, used to investing in factories etc. Also electricity is like a cost of doing business, right. So everybody wants to improve their bottom line. So they were a dog. adopting solar, it was well understood. Investing lacks and crores into buying solar was just like investing in any other asset, right? So the consumer adoption in commercial was easier because commercial customers understand buying equipment, infrastructure, et cetera. Solar is the rooftop solar is nothing but a tiny power plant, right? You are literally powering your, whatever your building is through solar. Now let's look at the consumer side of things, right? So the economics as early as 2015, it would take eight years for a home to get a payback on their solar investment because cost of solar was a little higher at that time and cost of electricity is usually lower for the residential segment, right? So the payback was eight years. Now if you're a middle class family, something with an eight year payback, it's good, but you don't have that kind of a horizon, right? But cut to 2021, the payback for a home came under five years because the cost of solar between 2015 to through 2021 crashed almost 40%, 50%. In the same period, because of inflation, all of our electricity comes from coal. India has the dirtiest grid in the world with maximum contribution of coal. And coal, as we all know, is the most polluting source of power, right? So and coal is not getting cheaper, right? We have only a few more decades of coal left in the world anyway, so it's only getting expensive. We are also importing a lot of coal, so it adds to our fiscal deficit, it adds to inflation, it adds to geopolitical reliance, right? You do not want to be in a situation that very much like gas was restricted from Germany by Russia. You don't want a situation where somebody can hold you to ransom for coal, right? So now in the wake of the new cost of solar and the increasing cost of coal electricity, solar is the new oil, solar is the new coal, it is the cheapest source of power for anybody, whether you are a homeowner looking at six panels or you are a large corporate looking at thousands of panels on your rooftop, right? And so now the residential solar revolution is starting. So it started about four, five years back that the economics was good, paybacks came under five years. However, customer education still takes time. Like I said, mankind has never bought a pop line for themselves, right? You're and my dad don't know what to look for when buying a source of electricity for their family. So every family is a first time buyer. The upfront investment goes from, you know, starts from two lakh rupees, could go as high as five, six, seven lakh rupees depending on how large a home you have and how many solar panels you need, right? So high upfront investment, low consumer awareness. I think those are the reasons why we are still at 1%. OK. But that's going to change very, very soon. Now what is the payback period as of 2024? Right. So as of 2024, the payback period for solar for a homeowner will be anywhere between three to five years. Three to five years? So states like Maharashtra, where electricity per unit costs about 12 bucks. It's more than the cost of a small business already bottle for one unit of electricity. So state of Maharashtra has the most expensive electricity, where the payback will be as low as three years. Three years. Other states will have typically 7.5 to 9 rupees of electricity, where the payback would be between four to five years. So you mentioned that the government is extremely bullish with solar. And can you tell me, Keijo, government's schemes, how is the Modi government trying to make solar viable in India? And how is that going to have a lasting impact on this payback period of three to five years? Right. So I think the, I think government of India has been extremely smart and thoughtful about how the residential solar boost is being given to the industry. Like you said, when the Godfather wants something to happen, it more often than not does happen. And India has very, very big on solar. And that's not for any political reason. I think it's very India first that our government is putting solar at the forefront. Like earlier coal and oil used to be a sign of energy independence that you're not dependent on other countries, especially in the wake of all the geopolitical crisis that's happening. Solar is the new definition of energy independence. Like I said, solar is the new oil. Right. So one, we want energy independence. Two, we are heavily dependent on imports for oil and coal. And hence, we want to reduce that. And that's why there is so much boost in India for domestic manufacturing as well. Yeah. To put up solar panel manufacturing facilities in India. Right. Today, China controls 80% of the world's solar panel supply. And every country is looking at a China plus one sourcing strategy. And hence, it's a great opportunity for India, Vietnam, Thailand. All of these countries are investing big time into solar panel manufacturing. So I think that's the second important thing. The third important thing is that solar is the cheapest source of electricity available. So I'm again going to delve into some numbers very, very quickly. The cost of producing power from a new solar power plant with these new panel prices is just 2 to 2.5 rupees per unit. These are large power plants, large utility scale power plants. Visavee, the cost of producing power from a thermal or a coal-based power plant is actually five rupees. So solar is now half of the cost of producing power from coal. Now, if you add batteries with solar, one problem with solar is that you can't control when a solar plant produces power. It produces power during sunshine hours. Doesn't produce power during sunset hours. So solar plus battery, even if you were to add battery to add resilience and add storage to these solar power plants, even that is like four bucks. So that is still cheaper than coal-based electricity. And hence, all of the new power that is going to come-- not just in India, but everywhere in the world-- is going to be from solar. In the last five years, if you add all of the new power capacity added by the world from all sources of power on one end, add hydrothermal, nuclear, all sources of power at one end, and take solar at the other end. More solar power was added than all other sources of power combined. So it's pretty much the future. And India recognizes that. And we have the unfair advantage of the sun. Now, the solar revolution is actually supposed to be a distributed solar revolution. There are centralized sources of power. You put up, like you said, 6,000 square foot of land. If you had that luxury, then you could put up power there. It would still be expensive because you are producing power at one point. And then you have to distribute it through thousands of kilometers. One of the biggest problems the whole world is grappling with, the grid, the electricity grid, which is such a complex, massive piece of infrastructure. 50 years back, it was a phenomena due to one of the greatest pieces of infrastructure. Today, it is a failing, vulnerable, very, very problematic piece of infrastructure. What? So our grid is old and aging. OK, first, let's define the grid. So your first energy produced in power plant, then you need to transmit it to the grid. Very cool. OK, so let's talk about the grid now. Why is the grid so problematic? In fact, I've also seen all the discounts in such a terrible state because of energy inefficiency, that now, simply because of those inefficiencies, they are now struggling with thousands and thousands of crores of debt and losses. So it's a national problem. So why does India have this electricity problem due to the grid? Yeah, so by the way, the grid is an ailing, vulnerable piece of infrastructure, not just for India, but for every developed country also. From US to Japan, it is a problem everywhere. OK. 50 years back, a certain infrastructure was built, which assumed a certain amount of power consumption in homes, in factories, in agricultural land, right? As civilization has evolved, as appliances have evolved, as lifestyle has evolved, as technology has played such a central role, the infrastructure that was built for a family to consume, maybe at that time, it was consuming 25 units of power. Somebody built it for 200 units of power. Today, there are homes that are consuming thousands of units of power in a month. So the infrastructure itself is not sufficient for the new reality of the world. Now most pieces of infrastructure, right? Railway, that has to be upgraded sooner or later. Similarly, the grid infrastructure also actually needs an upgrade. But it is so expensive to upgrade the grid infrastructure. Number one, two, discounts everywhere in the world are lost making. Everywhere. So, discount is basically nothing but a distribution company which you are visually vibhagotai from where you get your electricity. So they buy power from the power plants, then they manage the distribution of power to the last mile to homes, factories, offices, et cetera. And they basically monetize this distribution, management, build collection. That's their business model, right? Because the grid is a very, very ailing piece of infrastructure. As we all know, strong winds, a tree falls, your grid is the first to go down, right? Or the wires are the first to get collapsed. They're also a safety hazard, right? So it was a great piece of infrastructure 50 years back. It has very, very ailing and vulnerable today because extreme weather phenomena is more and more common. India used to have one cyclone in 10 years. We are now seeing two cyclones per year, right? Or heavy, you know, extreme weather phenomena, like a heavy winds has become very, very common. So it's a physical piece of architecture or infrastructure, which is very, very vulnerable to extreme weather phenomena, which is vulnerable to increasing power consumption in homes. And it's not the cables that were laid down under the ground were not designed for a family to consume the kind of power that the family is consuming today. But upgrading it is very, very expensive. And it's a massive, massive project, right? So that is why the whole world wants to reduce its reliance on the grid and move to more decentralized power sources, right? So imagine if you could produce your power and consume it at the same point, there was no distribution involved. So enter solar, right? A rooftop solar is a decentralized or a distributed energy ecosystem, right? Where every home will have its own tiny poplant and it'll power the entire home through that rooftop solar. This is very interesting, Shreya. And like I said, because of these government subsidies, what are the biggest government subsidies that Modi government is giving out to the consumers to reduce their cost of solar? Absolutely. So I thought we got, you know, we went very, very far off. Your original question was, what is the government doing to accelerate the adoption of solar? So let's now discuss about what is the government doing to promote adoption of solar amongst homes? Because solar is so good for the economy and the country and of course for our environment. It doesn't make noise, it doesn't create any pollution. India wants to promote a lot of residential solar. Now, the residential solar, I think it consumes about 20-25% of the country's entire power requirement comes from the residential solar segment. Now, let's look at the residential solar revolution. So, the first thing that India has done is made the policy climate very, very stable. Now, what does a family need to adopt solar? There is of course the subsidy, which is encouraging families to go solar. And India has launched the Pradhan Ministeri Suri Ghar scheme as part of which you can get up to 78,000 rupees in subsidy for a family to go solar. This is a direct benefit transfer. You don't have to wait for months and years to get this subsidy. India has developed a beautiful IT infrastructure. It is called the National Solar Portal, which goes by the name pmsurighar.gov.in. You can apply for solar on this portal. As a solar company, we make all the applications, all the government permits of solar through this National Solar Portal. And then for subsidy, we upload the consumers bank details in the National Solar Portal. And within 30 days of a customer solar being installed and ready, consumers get subsidy in their bank account. 70,000 rupees. 78,000 rupees in your bank account within 30 days. In fact, we are hearing that it's going to get even faster. We have customers who get this subsidy within a week's time. But this is actually a great piece of because, see, this is such a consumer to consumer revolution, right? Without the power of technology, without a solid IT infrastructure. That enables homes to apply for solar to get their permits, to get their subsidy. This can't happen, right? And India is a complex country. We have 73 discoms across our states and union territories. Every discom has its own IT system, right? And to, for a home, so let's actually talk about what are the permits a family needs to go solar. So to go solar, you need something to take benefit of something called net metering. Now what is net metering? He spoke about solar producing power only during sunshine hours. So now if I have a rooftop solar on my home, what happens at sunset? How do I power my home at sunset, right? So India has a, there is a policy called net metering as part of which your solar system is connected to the grid. Now what happens is during the sunshine hours, you will produce all the power that your home needs through the 24 hours of the day. Whatever your family is consuming instantaneously, maybe the lady of the houses at home, you're running some appliances, you take that power instantaneously from solar to your home. The excess power is pushed into the grid. Post sunset when the kids come back, you know, the other family members come back home, you need more power, you're running air conditioners at night, etc. The power that you sent into the grid during the day is taken back from the grid at night. This exchange of electricity is called net metering. So in a month, let's say you sent 100 units to the grid and took back 100 units, your net bill will be zero. So that is how you are powering your home throughout the day with solar. But technically the electrons, you know, some are consumed instantaneously, some are pushed into the grid, some are taken back from the grid. So this is where grid still plays a role because for net metering, you actually need to use the grid. Now, if net metering was not their Ganesh, every family would have to invest in a battery, which would add another 20, 30 percent into your initial investment. And so in a way, government is saying the grid is your free battery, right? And through net metering, families are able to power their homes throughout the day. Also, it reduces the pressure on the grid because now there are a lot of decentralized power production sources. There's not as much demand pressure. There is there is more augmentation of electricity into the grid through these distributed solar system. Sure. Modi ji is often said and this is the reason why the PM solar scheme became extremely popular. Right. So right now, you can save money with solar. You can make your electricity bill zero with solar. But can you put up a power plant that produces 500 units of power, sell the excess 200 and make money with it. Actually not today, while Modi ji has been saying it, India only encourages at the ground level at the last mile captive consumption, which means a power plant should be designed such that it produces sufficient power to power your family's requirement. Anything excess actually lapses, which means that excess power. So if you let's say make 500 units, but in the year, you know, you made 500 every month, but you only consumed 300 every month. So you had access 200 units per month. In a 12 month window, you had 2400 excess units. You will actually not get the right ROI for that selling the 2400 excess units. Technically, the grid will pay you for it, but they pay you at a very, very nominal rate of 2.5, 2.7 rupees. So that's not viable. When you put up solar for captive consumption, let's say your electricity is for eight rupees. When you're taking the benefit of net metering, you're actually getting the benefit of full eight rupees. That's how the payback of solar comes at three years or four years or five years. But if you're only getting two rupees, the economics won't make sense. However, there is a future in which government may encourage families to put up as much solar as their roof space allows and actually become sellers of power. So today, we are producers of power and consumers of power, but we are not able to make money extra money through solar. Countries like US, Germany, Netherlands, New Zealand, Australia, all of these countries do actually have a provision where families can sell excess power and make money with solar. So it is obvious that as the solar revolution evolves and as more and more, I mean, as a country we need more and more power. Government will likely encourage families to use maximum roofed-op space and put up maximum solar and sell whatever excess they can produce. Got it. So when do you think that will be possible? So India is a fast growing country. And any country that is growing fast, naturally with growth, power consumption also grows. So as a country, our power consumption is growing at eight to nine percent per year. There is not enough coal and infrastructure to grow at that pace. Now eight to nine percent is the country's growth of power consumption. If you look at the middle-class residential families with GDP growth, with growth of lifestyle, more electronics, EVs coming in with massive heat waves, India is going to need so many air conditioners. We are one of the lowest penetrated country when it comes to air conditioners. Only six, seven percent Indian families have air conditioners, but we are the worst impacted by heat waves. So the penetration of air conditioners is going to double in the next four years. Double. Double in India. So if you look at any air conditioner company, all of their growth targets are very aggressive because India is going to be a massive power, a massive air conditioner growth country. And air conditioners are one of the biggest power gaslers, air conditioners and electric vehicles, both of which are going to be more and more coming into families and homes. With that, the middle-class residential power consumption is actually going to grow at the pace of 14, 15 percent year-on-year. Which means every seven years a family's power consumption will double, right, with growing air conditioners, EVs, lifestyle, GDP growth, etc. All of that, right? Now as the country needs more and more power requirement, distributed solar is going to be an easy way to encourage more and more power production in the country, right? So I do expect a future where India will allow families to make money by selling solar, that however is not possible to do. So you're saying that right now it's not possible, but in the future as the GDP goes up, as the consumption per capita goes up, we will have policies in place which will then help us put up as much solar panels as possible because of which eventually there'll be a surplus of power that every family will produce. Eventually they'll be able to make money. Is that correct? Absolutely. So out of all the business case stories that I have done, the one important thing that I often encounter is China. China is the most dominating force and they are literally controlling the entire world's solar energy by the neck. Question, let's understand the value chain of solar and let's understand where exactly is China dominating so that the entrepreneurs of India understand that here's where the opportunity lies because I know for a fact that like I said, the Girl Fathers is extremely bullish with solar. This is where India's oil is and if we understand the opportunities that exist in the solar sector, there could be a large segment of entrepreneurs who can work towards it and help us achieve the milestone that we're trying to achieve. So let's break down the value chain of solar and understand where exactly is China acting as a bottleneck? Sure. So let's look at the full value chain of solar panels and then we look at inverters. Everything else I think you can make locally, for example, module mounting structures, solar square makes its own cables and you know switch gear, all of that other stuff is in India. So let's first focus on the panels which is the heart of the rooftop solar system. So solar panels, the value chain starts from polysilicon which is the raw material, the base raw material, that then gets converted to ingot, ingot gets converted to wafer, wafer to solar cell and then the solar cell is used to assemble the whole solar panel which is a 2 meter by 1 meter roughly a plate which will typically be of 500, 600 watt peak. That's the amount of power one solar panel will produce. Now China has invested big time into solar manufacturing capacity because now everybody wants to corner power sources, right? Any country which corners a power source becomes a global superpower. And China saw that solar will be the future of power consumption and production everywhere in the world. And so for the last decades they've been investing big time into solar manufacturing capacity. So up till solar wafer, China controls more than 95% of the world's supply. When it comes down to solar panels. the final finished good, they are still controlling about 80% of the world's supply. 80%? Absolutely. But because most countries are realizing the importance of solar in energy independence, most countries have started putting either sanctions or import duties on China. India also used to import heavily from China. However, few years ago, India introduced 40% basic custom duty on solar panels, which was not there a decade back. India is supporting Indian manufacturers by applying duties on Chinese imports and also giving production linked incentives to domestic manufacturers. So it is a chicken and egg problem. Once there is enough demand from Indian manufacturers, they will invest in larger capacities, the larger capacities they invest in, the more competitive they get to Chinese prices. It's as simple as that. So the government has to basically for the short term support Indian manufacturers such that they invest more and more in capacity and they are able to compete with the Chinese prices. And that is where custom duties have been applied in India. Europe and US have gone one step ahead and they have put sanctions on China. So Europe and US are actually importing panels not from China, but from India, Vietnam, Singapore, Thailand, etc. So it is also a great opportunity for India to ramp up capacity not just for domestic solar panel requirements but also for exports. God it. Shriya, today what is the cost difference between an Indian solar panel versus a Chinese solar panel? Absolutely. If you are importing a panel from China, currently the cost of that panel will be 13 to 14 rupees per watt. Sometimes it can also go even lower. For example, year end Chinese New Year, there is sometimes dumping of your end capacity. So it can also go down to a little bit lower than that. But 12 to 13 rupees if that is the cost landed for an imported solar panel, post all of duties. The made in India panels will be in the 21, 22, 23 rupees per watt range. So you are telling me that after applying 40 percent duty, a Chinese solar panel is costing about 14 rupees and Indian solar panel without duty is costing 20 to 22 rupees. Yeah, absolutely. And unfortunately the Chinese prices are actually very little to do with cost of production. China has incentivized the manufacturing there so heavily and they are trying to and by the way, there's another sort of massive reason here. So China invested in 1000 gigawatts of solar panel manufacturing capacity. So India comparatively has only 50 to 80 gigawatts of solar panel manufacturing. Now compared to 1000 gigawatts of manufacturing capacity, can you guess the world's demand for solar panels? It's 500 gigawatts. So it's actually half. China has more capacity than the world's demand combined. World's demand for solar. For solar panels. Yes. So China has put up more capacity. So there is currently a situation of over capacity where a lot of small Chinese manufacturers are actually dying and the large ones are basically just waiting it out, waiting their time for the other small ones to die. And so currently the prices have completely crashed from China. So these prices that we see today from imported solar panels, they're actually not sustainable. They're actually not the Chinese. Not sustainable even for the Chinese. So they are actually artificially deflated prices for imported solar panels. And it is only a short term phenomena. I expect the prices to go back up as you know the manufacturing capacities in China come more in line with the world's demand. And China is further strained out because Europe and US have put sanctions on imports from China. So all the more the capacity that they have, they're not able to sell because the world's largest buyers, which is countries like Germany and US are no longer buying from China. Plus now there is Trump. Who hates China? Who hates China? So today if the cost of solar panels is 24 rupees in India, when can we okay 22 rupees in India? When can we expect it to go down to 1213? Is it even possible? Right. So I think 12 and 13 like I said is artificial prices. That's primarily because of more supply, less demand and over capacity in China. Plus the trade sanctions and lots of other phenomena. A sustainable price is one that can justify the cost of manufacturing and the fair profit margins that any industry has to make. And hence I believe there is you know a time where you know Indian panel prices will also come down a little bit. Maybe 18 rupees, 19 rupees and I think they'll come closer and closer to China. The gap like I said Indian module manufacturing capacity is at 50 to 80 gigawatts. It's expected to cross 100 gigawatts in the coming two years. But it is still far, far away from the 1000 gigawatt capacity that China has. Correct. Do you think there'll be a time when India will get free electricity due to solar energy? Right. So are you saying that is there a future where every house sold in India is powered by rooftop solar? Yeah. I think it's a consumer adoption problem. Right. And there are certain hurdles to that adoption. Right. I think slowly, slowly as consumer awareness is increasing from 1% of like I said 10 crore urban independent homes in India out of that 10 lakh have adopted solar. Is there a future where 3, 4, 5 crores out of these 10 crore homes will have solar? Absolutely. I believe in a future where solar will be ubiquitous every home very much like it has a television, color television and a refrigerator will also have rooftop solar. However, the adoption will take you know a few years and the schemes like Pradharam and Sri Suragar, Yodhna are definitely helping aid and accelerate that adoption. I'll give one statistics which is very very interesting. So let's talk about solar adoption, right. Like I said 10 lakh homes in India have solar. The first one lakh homes to go solar took about five years and that milestone India hit around 2019. And then you know COVID hit and of course there were you know tough years in between. But even as early as last year it took nine months for the for one lakh homes to go solar. But today it is taking as little as 50 to 60 days for one lakh homes to go solar. So in less than two months now one lakh homes is going solar and I'm very confident that next year in less than 30 days one lakh homes would be going solar and by 2026-27 I'm further confident that in about a week or two one lakh homes would be going solar. So India's solar revolution is happening very very fast. As of today we have 10 lakh homes powered by solar. Some of the more penetrated countries like the US have about 50 lakh homes powered by solar which was a milestone US hit just last quarter. And India is talking about one crore homes to be powered by solar in just three years. That's the announcement that our prime minister has made that under the Pradhanmentri Surya Ghariyojana with this 78,000 rupees subsidy the target for India is for one crore homes to adopt solar in three years. Even if that happens in four to five years I think it's a phenomenal feat. There is no other country in the world other than China which has crossed the 50 lakh homes solarized milestone. So from 10 lakh homes I think very quickly India will cross 50 lakhs and touch the one crore homes milestone. And with that India will be one of the most solar penetrated countries when it comes to homes in the world. That is incredible. That is incredible. Now tell me Surya I want to jump into two subjects right now. One is the business opportunity in the solar space and I want you to break down the value chain of solar so that we can understand where does the opportunity live because if the time is increasing with such a rapid pace it means that there is a tremendous opportunity and we would need not one but 10 solar square type companies to be able to service this demand. The second thing that I want to develop deeper into is from the customer's time point that if I have to install solar panels in fact my uncle recently installed a solar panel in the US and he was extremely skeptical. He made God knows how many excels did so many analysis just to get rid of solar and can you imagine in the US for an educated American citizen if it is a matter of so much skepticism and indeed obviously customers will have a lot of skepticism. So let's first look at the business opportunity because from business opportunity if you go to skepticism we can also understand from the customer's standpoint what are the problems that these businesses have to solve. So let's start with the business opportunity when it comes to the solar industry how many categories of business can exist. While the customer goes from thinking about a solar panel to setting up the solar panel to maintaining the solar panel and then changing the solar panel. Right absolutely. So you know the simple answer lies in the value chain first there are the original equipment manufacturers. There are companies who manufacture panels, inverters, cables, switch care etc. Like I said a rooftop solar system let's let's go actually from the end customer. The end customer requires a rooftop solar system that could power his home. Like I said a well designed well maintained solar system produces free electricity for 25 years. Now this has more than 70 components. So the first business in the value chain is manufacturing right which of course requires capital investment which is requires expertise, manufacturing etc. And that is where all the large you know conglomerates of India also in so are Dhani manufacturer panels, Tata manufacturer panels, Vari manufacturer panels etc etc. Then come the inverters. Inverters are still mostly imported from China a few brands in India are tinkering with it but mostly it's white labeled but you know there are brands which basically sell inverters in India that are manufactured ultimately in China which is white labeled in India right. So a lot of inverters even in residential solar are directly for example solar square directly works with Chinese manufacturers and we import our inverters from China right. Okay just a second over here. Does the government provide incentives for making India inverters? No. No. So you have no other choice but to import from China because you get the cheapest inverters from there. Wherever you get the best product and the best price you basically have the freedom to procure from there. Okay. But for panels there is you know a protectionist policy where to get a subsidy you have to use a made in India panel. Now let's look at the next part of the value chain right. Now a consumer is not buying these panels inverters and putting his own solar system. They need what is called a solar installer in between. A company who would help a family understand how much solar do they need? 3 kilowatt, 4 kilowatt, 10 kilowatt then design it then procure all the different components from the right manufacturers, choose the right technology, choose the right quality of product, procure it at the right price and then install it at their home right. So then comes the you know, design procurement, design installation, and then the after sales. Now, one thing that the installers in India do incorrectly is they are all in the business of install and forget. Solar Lagao Bhuljao, but that is not how solar operates. We've been doing rooftop solar for almost 10 years now, and solar like any other product category, in fact a lot more than other product categories requires a lot of maintenance. Because your rooftop solar system is installed on your roof, it's exposed to external weather conditions, right? And India is a very dusty country. We have a lot of construction dust. We are a developing country. Rodes are getting constructed. Homes are getting constructed. Plus the soil quality of India is that it's very hard and sticky dust. Now, when that settles on the solar panels, the sunlight cannot reach the panels. And so simply the dust and you know, bird droppings and all other environmental factors cause the solar power production to go down. Now, an innocent family buys solar, thinking that they'll break even in four years, five years. But because of dust and lack of maintenance of solar post installation, the power production goes down by as much as 30% in just six months. In just six months. And does it go further down? It keeps going down from there on if the maintenance is not done. Hence post installation, so solar square is in the business of install and operate. So what we do is that we tell our customers that you are not just buying solar from solar square, you're actually buying power savings from solar square. So we guarantee power production and savings to the customer for five years. In these five years, we conduct a regular monthly maintenance of the customer's solar. And we have built the technology stack to real time monitor and manage all the solar systems that we have installed across India. Sure. Can you go deeper into this savings guarantee thing and help you understand what exactly do you provide to the customers? Sure. So solar square has been doing rooftop solar for the last 10 years. And in these 10 years, you know, solar is an asset has our 25 year life. So the asset class itself requires designing durability and, you know, performance assurance for two decades. Right. So it requires a lot of, you know, understanding of the technology and how to ensure maximum performance from it. So one learning that we had in the last 10 years is that because India is a dusty country and because there is this sticky dust that, you know, that our Indian soil has performance of solar can go down by as high as 30% in just six months. And when we enter residential solar about five years back, we learned that consumers were doing full left right and center and being sold solar by saying, like our bullsauv install and forget, right, which is far from the reality, right. Without maintenance, your solar system performance will come down because dust and bird droppings deposit on it. With that, you know, you have other issues that start coming up. So when panels have dust on top of it, they start producing heat instead of electricity. Okay. And that heat leads to the panels burning from inside. So the panels start developing something that is called hotspots. So one, your performance has gone down. Your panel has developed hotspots, which means now, even if you clean it, it's permanently damaged because, you know, for six, seven months, whatever, you did not maintain it properly. The hotspots led to damaging the panel. Now when your production will go down, you'll try to claim a warranty. You'll realize that your warranties also rejected because all solar panel warranties are in India are actually subject to the installer maintaining the solar. So without maintenance, even your warranties get rejected, right, because nobody can, you know, cover you against stuff like a hotspot and your panels burning from within. The worst part is that over a period of time, these hotspots can heat up so much that it can actually also lead to a fire risk. Fire risk. And a fire can be caught up in your solar system. It won't happen on day one or in six months, but it can happen in three to four years. So like I said, a rooftop solar is a thousand-world DC system. And innocent families who have never bought a solar for themselves who don't understand this technology, who don't understand the risks of lack of maintenance and the benefit of a well-designed high quality safe system, which is maintained. They can make the wrong sort of mistakes. So while the solar revolution in all is great, I think what is very, very important is awareness among customers about quality, safety and performance. So we are in the business of solar with savings guarantee, which means we are the only company in India from where if you buy solar, you get a five-year performance guarantee. It's you can think of it a little bit like, I'm a Guaranteed, my knowledge, we're solar, I'm guaranteed savings, we're so then it is my responsibility to take care of everything, the quality of components, the design, the installation and the maintenance for five years after that to ensure that the customer is getting his maximum savings and power production. Under savings guarantee, if your solar produces less power, so let's say if it produces, you know, we told you you will make five thousand units, but you only made four thousand five hundred units, we will pay you back for the balance five hundred units. Okay. So effectively, this becomes like a solar fixed deposit wherein the customer is investing in solar. And for the next five years, he has guaranteed the savings. Any deficit in production, we will compensate. Along with that, we also guarantee zero repair replacement cost. What is that? So what that means is that you know, you invest one time in solar and you think it will make you free power for 20 to 25 years, but what if it breaks down? What if it has repair expenses? What if your warranties get rejected? Right? And it is a very, very common reality in India that because of lack of maintenance and cheap solar that's poorly designed, because of all of those reasons, people start getting repair expenses. So, you know, I'd like to quote a very, very important research that was done by a reputed think tank in India called CEW. Now, when they had conducted a research of quality and state of residential solar installations in India, they found out that 50% homeowners were generating 30% lesser power, which means one in two homes were actually had bought in solar, but were realizing much lesser savings. And a large part of that 80% of, you know, homes were found to have no maintenance on solar. Some 20% homes were found to have solar installed in shadows, right? And there were similarly several issues like stale trail hotspot quality issues, lack of maintenance, etc, etc. Right? So, while the solar revolution is great and everybody thinks that they can save from solar, it's very important to understand what is the solar. Solar is the right thing, but what is the solar that will give you maximum savings and maximum return? And only then can the India solar revolution be successful, right? Because if a lot of people end up buying, you know, a lot of products are great, but when people end up buying wrong things or wrong business practices or lack of consumer awareness leads to people not realizing the benefit of solar, the entire industry and the entire solar revolution takes a backseat, right? So, today if you're installing one lakh solar panels for 60 days, how many solar panels do you install out of these one lakh solar panels? So, one lakh solar panels, but solar systems. So, one lakh homes. One lakh homes are adopting solar panels. So, one lakh almost 50,000 homes are going solar every month currently in India. SolarSquare is operating in just 15 cities of India. And with this, we are the number one residential solar brand in the country. So, even on India's national solar portal, we've been the number one brand since 2022. Currently, we are doing about a thousand homes a month in India that are going solar with solar square in just these 15 cities that we operate in. Which means there is room for 49,000 homes every single month, which means India needs 50 solar square type companies with the existing demand to be able to service these customers. Absolutely. So, India has more than 5,000 small and big moment power presidential solar installers registered on India's national solar portal. And like I said, there is a varying degree of professionalism in different solar installers that are there in India. So, India's target was to buy now reach two lakh homes a month. We are still at about 50,000, 60,000 homes a month. So, India is still far behind the pace that we wanted option to happen in India. So, actually, there is a massive opportunity of both for consumers to become aware, but for also solar companies like solar square are ramping up our operational capacity. So, we are growing every month, we are adding more sales guys, we are adding more installers, we are adding more operations team members after sales crews, etc. I think the pace of this revolution is of course important for the solar revolution to be successful. We don't just have to measure how many homes installed solar or how many megawatts and gigawatts of solar got installed. But actually also track how much power is being produced. Are they actually generating the electricity and helping with both electricity bills of consumers and also with climate change? Because if we install solar and like that research done by CEW, if 50% homes are producing less power, it basically doesn't help the whole sort of solar revolution to actually realize it's true potential. Makes sense. You know what Shreya, my uncle would have loved a solar square kept company in the US because he did all of it by himself. And even now he's extremely worried about maintenance and the one skepticism that I said why are you thinking so much about installing solar. And that's when he told me that the area that he lives in, again that area witnesses, weather conditions which are not so favorable. Their labor costs are extremely high. So, if he has to call somebody to maintain the panel, it becomes extremely difficult. They don't have skin in the game. For example, if you have this strategy whereby you give out a power savings guarantee, what happens is that you take accountability of maintaining the solar panel. But in the US, he hasn't found a company that can do it. So, this end to end solution just gives the customers so much of free mind space to be able to do better things than just think about their solar panel. And when it starts raining also, you know, until you get hold of a asset which is lying outside, you're not worried about it. But the moment you get it and then there is rain, the first thing that comes to your mind is, he's my solar panel okay. This happened to my house when we got a dish. My father was extremely skeptical. The moment he got hold of a dish, he was like, it's raining. What's happening to the dish? I'm like, Dad, we are literally the late adopters of dish. We have done it for 10 years. We have been late. So, you have to be careful. But that also helped me understand how the customer is doing. لیکن یہ کیونکہ آپ کو اس کےپٹیزے میں کہیں کہ یہ اگر سال ہو بارہ تو بہتی بڑی بہتی اور یہ انستال ان فگهٹ ہے کہ یہ سچا اینٹیوٹی اپنے انستال صلاب علیہ اور یہ فگہٹ ہے. Fei it but then fuck it is what cost you so much money very interesting. So Initiate just to summarize your answer We hear we've got three market also is Sola Manufacturing. The other is in the inverter space right now We are not able to compete with Chinese Inverters. But if the Indian Company is could bring it and then we have a huge market with install and forget where you are able to serve about 1000 customers 1000 homes per month but India is adding 50,000 homes to the solar sector which means 49,000 white space. This is now going to double to 2 lakh very very soon and it is going to double to 1 lakh and then double again to 2 lakh which means there's a huge market unfortunately that people can tap into. Do you also do this for housing studies? Practical are solar panels for housing societies for example I live in a building which is more than 60 60 floors. So is it practical to have a solar panel for a building of that size? Right. So the residential solar revolution is pretty inclusive. So both homes and housing societies both are adopting solar at a rapid pace. There is subsidy also for housing societies by the way which is much higher. It is actually a subsidy of 18,000 rupees per kilowatt that goes all the way up to 500 kilowatt. Which means for a housing society they can put up solar solutions on their roof and they can get subsidy up to 90 lakhs. It is incredible the kind of financial support that is available. Now housing societies use their rooftop to put up solar because the roof is a shared real estate. The rooftop solar is for common area amenities. So if there are 50 apartments in a society the rooftop solar system will offset their common area bills which is lift, pump, street light, you could have a gym in your building. So all of those common area electricity expenses can be offset through rooftop solar. Interestingly 40 to 50% of a society's monthly expense is actually electricity. Right. Especially in the state of Maharashtra where you know Bombay and Pune both have a lot of housing societies. Then Bangalore Delhi, Hyderabad, all our metro cities are mostly in vertical living. The tariffs are very high. So in Bombay or electricity tariff in a housing society could be like 12, 13 rupees in Pune. It could be 15 to 20 rupees depending on how much power you consume per unit. Similarly in other cities also like the housing societies pay commercial tariffs. Which is quite high. And so the economics and break even for the payback period for a housing society in a Maharashtra would be like two years. Two years. So it's insane right 25 years of free electricity and a payback of two years. And with the subsidy even in like Bangalore and Delhi the paybacks are all less than five years. So it's actually very lucrative for housing societies to go solar. And interestingly solar square is number one in India also in the housing society. So we have now close to 200 housing societies that we have powered with solar. And we have close to 18,000 homes that we have powered with solar. So in both of these categories we're actually number one. Is it practical to think that with solar panels on the terrace? Can it power the entire building like including the homes? Yes. So it can practically however the policies around it are not yet you know structured. So what you need if let's say you have 50 homes in a society and if every home wanted to be powered by solar. Practically you can but you need an no see and every home to participate in this solar thing right usually what happens is out of 50 homes to flats are unoccupied for people don't want to be a part of it. Then you have to get an no see from everybody so it becomes like this democratic and difficult decision making process right versus if you put up solar for common area amenities everybody is saving equally right. And so it's in everybody's interest usually the funds for solar will come through the housing societies corpus. So usually they collect you know monthly maintenance and they do have certain corpus so old societies will have crores and crores of corpus right. So a lot of societies are basically rather than putting it in a fixed deposit they're actually putting it in solar and realizing 4 to 5 times higher return on investment than a fixed deposit right makes sense. So so yeah so that's how the housing societies are adopting solar. Sure let's bring down the economics of installing a solar panel for an average Indian household okay how much does it cost to install a solar panel in India. So let's look at this math for a family a family which consumes let's say about 500 units of power in a month we're taking a simple example. Most common tariff in India is about eight rupees right if you are living in Maharashtra your tariff could be 12 13 14 rupees if you're living in Uttar Pradesh your tariff could be 7 and a half rupees. But we're taking a simple example eight rupees which is the most common tariff so 500 units of power if your family consumes in a month your power cost will be 4000 rupees. This is your variable power cost over and above this you will have some basic meter rental charges in your bill as well which will be fixed charges there would be something to the tune of 200 to 300 rupees on top of it right now if you were to put up a solar system of 4 kilowatt a 4 kilowatt system will roughly give you 450 to 500 units of power in a month right so for simplicity sake we'll take 500 units of power in a month. Now a 4 kilowatt system typically requires 8 panels right each panel is give or take you know the latest technology of panels of 540 what peak so 0.54 kilowatts right so 8 panels will effectively give you 4.32 kilowatts right now this 4.32 kilowatt solar system will produce enough power to make your 4000 rupees energy charge 0. What you will pay is does the 200 to 300 rupees rental charge which you are you know the meter rental charge which you are still paying so a 4.32 kilowatt system over a year will save you broadly 40 8 to 50 thousand rupees right for simplicity simplicity sake we'll take 50 thousand rupees right now let's look at the cost of the solar system the cost of the solar system will largely vary a lot of people think this is like alubhaji right like how much rupees per kilowatt without truly understanding what is the quality safety service of solar right. Like we understood a good quality in a good quality solar you have to invest in storm proof cyclone proof module mounts you have to invest in after sale service you have to ensure that the quality of components is good one of the common areas where consumers are actually being cheated is that second hand panels are also being installed because consumers are also not able to recognize you know these panels are they brand new or are the second hand right so you have to be worry of a lot of those things that can lead you to you know less sort of savings from solar so one thing when you look at solar that be. So that is the cost of the solar system is the cost of the solar system is a very expensive and that is the cost of the solar system is very expensive. So you have to buy a 4.32 kilowatt system from solar square for your home the cost will be between 2.9 to 3.1 lakh rupees right this is for the highest quality safest solar system with a five year after sales and savings guarantee as well which means if any power production is lesser because of any reason we will pay you back for it at eight rupees per unit. So let's say we told you that we will make you 500 units per month in a year it becomes 6000 units let's say I only produce 5500 units for you we will pay you back for the balance 500 units right so this way it becomes with the solar square savings guarantee it becomes like a fixed deposit your initial investment is fixed and your savings is fixed and you have a guarantee of zero repair replacement expenses as well so that gives you a lot of peace of mind to the consumers like I said you can buy solar at a lot of prices very much like a car whether you're buying a car or you're going to be able to buy a car. Whether you're buying a car diesel car or a petrol car you know different price points depending on different you know hatchbacks and etc similarly in solar also you will hear a lot of prices so before deciding the price first understand what do you want in solar system right like for example if safety is paramount to you if peace of mind and savings is paramount to you make your decision accordingly so that's one of the biggest advice we I always have for consumers because cheap solar can be very very expensive. So now let's look at the further look at the economic so on this investment you will get a 78,000 rupees subsidy from government of India so your net investment becomes actually 2.12 2.3 lakh rupees right on this investment like I said you will save roughly 50,000 rupees per year right and so your solar pay back is a little over four years right and and so that is the economics of solar like I said if let's say you were living in Maharashtra at the same 5500 units of power that you produce you will be saving at 12 rupees per unit. So instead of 4000 a month you will be saving 6000 a month right so you'll be saving 72,000 in a year and hence in Maharashtra the pay back will be less than four years right so your pay back can vary depending on your power tariff. Got it and how much do I have to pay solar square per year for maintenance right so in this initial investment the five year maintenance and savings guarantees already included so after this you actually don't pay anything. So if I invest 2.9 to 3 1 lakh rupees minus let's say the 80,000 rupees of subsidy 78,000 rupees to be precise so if I invest 2.1 to 2.3 lakh rupees in my solar panel for the next five years I do not have to worry about my efficiency solar square will take care of it the maintenance and everything so under this what all the solar square do to make sure that my solar panels are efficient right so like I said solar square is in just 15 cities and we have almost a thousand customers per city you know is not going to be able to do that. So we have a very deep after sales network so the one thing like I said solar requires regular maintenance very much like your car requires servicing a conditioner requires servicing roof top solar systems also require regular maintenance so the first thing that we do is a monthly power boost service power boost services basically where a solar square technician would come to your home. they would do a complete system health check including deep cleaning of the panels. Now cleaning of the panels is very very tricky business. A lot of people think we will get water but actually solar panels are made of glass on the top and like I said Indian dust is very hard and sticky. So you have to use a certain pH of water or a certain soft bristle brush and a trained technician to make sure that you are cleaning the panels uniformly. One of the common things that we have seen is panel pepani maria, all the dust settles at the bottom. Right? When the dust settles at the bottom that is exactly where the hot spots get created. And most solar panels that have those dark, black, burnt spots as you can see in this image, most of these are at the corners of the solar panels because of improper and uneven cleaning of the surface. So this is a professional deep cleaning that we do. And under this it is our responsibility that nothing happens to your warranty as well. To give you the peak performance but while giving it we don't have to, we have to make sure that the panel is not damaged as well. And then we have electrical health checks, mechanical health check. Our wind pro mount is not bolted. We don't do welding in our wind pro mount, the mounting structures. So because of thermal expansion contraction, we have to keep checking the nut bolts as well to make sure that the mechanical safety of the structure is actually not impacted. So it's a complete health check like I said and it's a power boost service. So that's one thing that we do. The other thing that we do is we take care of all your warranty claims. So with solar square, even if the manufacturer rejects your warranty, we cover you for it. So it is a door to door warranty, which means that let's say if something happened to your panel and the manufacturer said it's not my fault, you know it's a hot spot because of whatever reason, I mean a lot of warranties are rejected in India and residential solar. Mostly the blame goes on the installer and the manufacturer and installer keep fighting. The end customer never gets their warranty. So solar square also covers the customer for that, which means if the manufacturer rejects the warranty, we'll actually pay from a pocket and cover you for it. So that's the other thing that we do. The third thing is real time monitoring, Ganesh. So we are the largest operators of distributed solar assets in India by volume. Each of our solar systems that we have powered, we have real time data on how much power is being produced. And every day we are monitoring our entire portfolio of homes that are powered and housing societies that are powered by solar square. So with this data, we have predictive, you know, analytics on which home is performing well, where is the performance going down? Like you said, you know, power production, like I said, goes down by, you know, can go down because of dust and bird dropping. We also monitor the rate of, you know, power production issue. You have an idea about all the solar panels. Yes. So we have an idea of every single one solar panel that is installed across India by solar square and we are monitoring their power production. So if there is, for example, I installed solar on your home and your neighbor started a construction that led to a lot of dust in your area, right? For two, three months, there was a lot more dust. We'll have data that your panel is underperforming more than usual and we'll do a extra power boost visit for your home. What are you saying? So this is not routine. Like you will know when the solar panel is not performing and then you will come and service it. Absolutely. That is incredible. I wish Urban Life could do that for my house. So exactly. So we have real time data of every home and with that, we are able to get smarter about how we operate and maintain this asset, right? Because I have given you and are all our customers a guarantee, right? So I need to know about performance at all times and I need to take corrective action whenever there's a problem. Shreea, this business model that you are in, I mean, it is extremely customer friendly. But I'm just trying to understand like, what exactly is a margin that you make out of it? If I am paying 2.3 lakh rupees, a large chunk of it goes into the solar panel. Then there is the installation of the solar panel and then you have very less margin for maintenance and the installation both, right? So my question is, out of this 2.3 lakh rupees, what's your gross margin like? Right, absolutely. So I think the whole magic of maintenance only works with a large customer density, right? So not all businesses operate, you know, can make the same margin at every volume level, right? If you look at quick commerce, right? The more customers there are, the more dark stores there are, the more margin there is. Very similar to this because our business is so heavily about after sales, customer density really matters. That is why, despite being the number one company of India, we are only in 15 cities. Because our idea is to go super deep in those cities. Cities like Pune, we have close to 30% market share. Bangalore, we have 25% market share. Hyderabad, we have 15% market share. So our idea is to have, like, go really deep. So that we're able to service our customers at a low cost while still making margin, right? So that's one of the important parts of, you know, making margin in this business. So Shaya, at the Uniti Chromics level, let's say you stop investing in growth today out of these 2.3 lakh rupees, what's your gross margin like? Right. So our gross margin is between 30 and 40%. Depending on, you know, different order sizes, right? Like the bigger it gets, the lower the gross margin, but the bigger the project sizes. But in the, between the 30 to 40% range is where our gross margins are. Below that, we have cost of operations, cost of designers who design the solar system. The government permits that we have and then installation charges, you know, we actually have to do the installation of the customers home. Then the after sales charges and guarantees and all that we give to the customers. So on a unit level, our typical order sizes between, you know, typically focal order is our average size. So roughly 2.7 lakh rupees is where our typical, you know, order sizes, average order sizes, you know, some people buy two, some three, some four kilowatt, some 10 kilowatt also. But 2.7 lakhs is where our average order sizes. And on a per order level, we make close to 10%. Okay. As our margin. Net margin. As our net margin. Net of all expenses, including sales, marketing, material, everything. Got it. So net margin is 10% and gross margin is close to 30 to 40%. Got it. So Shreya, when it comes to this 10% margin, it's in extremely dicey margin space to be in, right? Because you are giving so much to the customers. And it's so much on foresight that in the next five years, based on your calculation, customers will experience only that much trouble that you will be able to service them widely, right? And five years is a very long time. Like we don't know what's going to happen in the next five years. And in fact, five years back, we had COVID. So we can imagine what's going to happen. And like you mentioned, that cyclones are getting more and more frequent. So in the next five to 10 years, in just the two cycles that we are about to witness, we are about to witness a lot of chaos. So my question is, this 10% margin, could it go down further in case of an extreme scenario? Right. So I think that it is very important to look at businesses holistically, right? So I think when it comes to solar square, we are building a brand-in-and-unorganized market. Now, as we said, 50,000 homes are going solar. Then one lack homes will go solar. Then two lack homes will go solar. Everybody, a lot of unorganized players will come in thinking, this is a party. Oh, there is so much demand to be had, right? But unless you have a unique value proposition, and there is this word called, can you charge your fair margin? If you do not have a unique proposition to the customer, it is a raise to the bottom. Because you will always be in the fight to say, can I do this cheaper? Right. So anybody who's in the business of saying, can I sell this cheaper? Is on a raise to the bottom. Right. And so somebody will always be there. We'll say, I'll do it at a lower margin. Right. Somebody will always be an entrepreneur for two to three years, be on a suicide mission, and keep making it cheaper without realizing that he's making losses. Right. So there is a lot of that raise to the bottom if you're in the business of selling cheaper. We are not in that business. What we know is very, very firmly what we stand for, and what value we deliver to the customer. Sure, when it comes to your business, it's very difficult to market your business. Because when it comes to solar, because solar square is not yet such a big brand, that people, solar means solar square, understand. And this is such a, I wouldn't call trust deficit. It is trust deficit, but people are not aware of the trust deficit that exists. And they will only come to know after a repercussion. It's just like insurance. When you take insurance, you get a chip, I see, I see, I see, I see, low, HDFCs, starting with a lot of things. But then only after it costs you money, that you understand that you've bought the wrong insurance. And by that time, it's already too late. So the realization of the customer requires one cycle of problem, right? So before that happens, how do you educate a customer about the problems of solar? Put up your proposition, and then get them to spend two to four lakh rupees with you. And by the way, do you have ballad actors in your brand? Not at all. Okay. So how do you get customers to trust you for a decision that's worth two to four lakh rupees without ballad actors in your industry? Right. And I think the biggest learning that we had Ganesh, and this is my second startup. So I have a fair amount of experience in marketing and brand building. The one thing we realize is that when you're building for a high ticket size category with such a long life, right? We're talking of 25 years of product life. What we realize was that there is no marketing better than customer service. And this is very counterintuitive, right? We believe that our good customer service is actually the best form of marketing. Because what allows us to grow quite nicely without burning a lot of money is actually the fact that when one customer goes solar, he recommends his friends and family. So currently, on average, 10 crores of revenue a month walks up to us every month because it's purely referrals. So referrals is close to 35% or 35%. Yes, it is 35% of our monthly sales. And that, of course, we give a 5,000 rupee referral bonus. But when it comes to a high trust purchase category, you can give any amount of referral bonus. People will not recommend till they are truly happy. The referral bonus is a little bit of a nudge on top of it, right? So we've tried to build a really nice referral program where our customers are referring their friends and family and office members and relatives, et cetera, et cetera, to go solar. So 35% of our revenue comes by that. About 50%, 55% come through performance marketing. So we do Facebook ads, Google ads, Instagram ads, et cetera. And of course, there also we depend heavily on educational marketing ganache. What we've realized is that because it's a high ticket-sized category, and like I said, everybody is a first-time buyer. Nobody really knows what to look for when going solar. So people do a fair amount of research, right? And so educational marketing works really well. So one of the things that we've done amongst-- we of course do YouTube videos and educational content. We've also published a handbook for going solar. It's a Homeowners Guide to Going Solar. What we also do is are monthly webinars for anybody and everybody. They are literally Janhit Mejari educational webinars where we talk about the benefits of solar, the economics, the payback, what is Sahi solar, what is good solar versus bad solar, what is the importance of maintenance. And we basically create education so that we can have a generation of solar educated adults who understand the benefits and who are taking good decisions and who are taking safe decisions for their family when they're going solar. So that has also led to a lot of trust building. It invariably happens that a lot of people attend these webinars, they end up buying from solar square when they understand the kind of thoughtfulness and safety standards that we put behind our offering to customers. So educational marketing has been another important aspect of customer awareness. We haven't hired celebrities yet. But like you said, solar, solar, solar square, that's obviously the dream. We believe we are the number one residential solar brand in India. And we could become the category defining brand in this industry as well. And for that at some point, maybe we will also hire a celebrity or a cricketer. But till then, I believe the most potent and powerful form of marketing is actually word of mouth. Because in high trust categories, no matter how much marketing you do, and no matter how many celebrities you hire, if Sharmaji is not recommending to Methaji, right? Or if Sharmaji is telling Methaji, this company is not good. You know, no amount of celebrity marketing can help you. So customer service is, honestly, the biggest form of marketing. That is incredible, Shreya. One last question. I know that you can figure out that you've got great customers through referrals. But how do you figure out bad customers as an unhappy customers? Do they just call you? Right. So we do have a call center and customer service, that team that's always on the lookout. Like I said, because we are monitoring the customer's rooftop solar performance, we actually try to minimize the number of unhappy customers by taking corrective action. So even before our customer will realize, its got visually come on right. Before that, our systems and technology platforms create an alert and our after sales crew will reach the customer's home and figure out what is happening. But otherwise also definitely in every business, there will be some customers who will be unhappy. So of course, we do have a customer service team, call center team, we have field after sales technicians who take care of any issues on the ground. Of course, government permits used to be a big, big issue in the early days. And we didn't touch upon that. But as part of the PM Suragar scheme, I think one of the most phenomenal things that India has done is that we are actually making it faster online and paperless for a family to switch to solar. So literally three years back, the niche, for a family to go solar in India, we would apply for permits. We would have to take signatures on a paper, take it to the local Bijli Webhag, then they would give it to the next department. It could take as much as 60 days to 90 days for a family, from start to finish to go solar. And there are permits before you go solar. And then there is like an inspection by the local discounts. So that would take a month again. Now, government of India wants to make it so fast and online and paperless for families to switch to solar. To the extent that we can get a lot of these permits in literally one day. One day. Can you imagine? In one day. So start to finish. Of course, we get the permit, then we do the installation, then there's an inspection by the local discount, after which your subsidy comes in your bank account. Start to finish. India could be looking at families being able to go solar in 30 to 40 days. And while that may not seem like much, I can tell you this in the US even today, in 2024, where 5% American homes have already adopted solar, it still takes 60 to 90 days for a family to go solar. And permits are extremely expensive. They are not online. And they are very, very painful. So I think India is really leading the charge in terms of the IT infrastructure that we are building for homes to go solar. And if we can-- I think there is a future while in India, you'll be able to go solar and literally one to two weeks. Start to finish all the permits. The installation itself with our wind pro mount, the modular mounting structures, it just takes eight hours. So the installation itself just takes eight hours. But the permits used to take 60 to 90 days, two years back. So today the installation will take one, eight hours. But the permits also take much lesser time. And like I said, I think in India, we'll be looking at a two to three week period for a family to switch to solar, which will be better than any developed country like Germany or US or Australia. And so I think India is really serious about the solar revolution and making it easy for families to switch to solar. That is amazing, Shree. I am so delighted that I got a complete breakdown of-- this is perhaps the best solar case study I could have done. So I'll just quickly summarize. And if there's anything that you think needs to be added, we can just add to this summarization. The first thing that we understood is that India is a very, very fast-growing market for solar. What we understood is that there are one-like homes that are going solar every 60 days, which comes down to 50,000 homes per month. And solar square, which is the top solar installer in the country, is only able to service 1,000 homes, which means there's a huge market of opportunity. And when we got deeper into market of opportunity, what we also understood is that there is the inverter, there is the panel, and then there is the mount. These are three components where the biggest opportunity lies, because 50,000 solar will require 50,000 inverters, 50,000 mounts, and the panels. As far as the value chain of solar is concerned, we've got polysilicon, ingots, wafers, and the panels. Ingets and wafers and polysilicon. All of them, they come from China. And today we're heavily dependent on China, whereby more than 95% of these ingots and wafers come from China. Then we have cells and panels, whereby earlier, we used to do only panels in India. But now we have, now we have backward integrated to cells. But even now, wafers and ingots is a big, big problem. As far as inverters are concerned, today there is a very big cost advantage to the Chinese, because their costs are extremely low as compared to Indians. So if somebody can bring down the cost of inverters in India, as compared to the Chinese, that will be great. As far as the panels are concerned, I think the cost of panels from what you mentioned for China, which is un-sustainable at the moment, is close to 12 to 13 rupees per kilowatt, but per watt. But for India, it turns out to be 22 to 23 rupees, that is expected to come down to 18 to 19 as we achieve skill. And as far as solar installation for a family's concern, what we've understood is that for a 2 to 3 BHK, consuming 500 units per month, a 4 kilowatt solar panel is great, assuming 8 rupees per unit, that's 4,000 rupees per month in electricity bill. If they're able to install this panel, eight panels actually, with giving them 4.3 to kilowatt, they'll be able to bring down this electricity bill to zero. And the only charge they'll have to pay is the 200 rupees of metering, which is quite insignificant. Then when it comes to India as a country, we have a problem of centralized distribution, which is where our discounts come in. 50 years back, discounts were great, but now discounts themselves have become a problem, because of which we are inefficiently distributing power. We are wasting a lot of power. At the same time, it's also extremely hazardous and unsustainable for the growing per capita power consumption in the country, which is why decentralized power is required. And solar just happens to be decentralized, it happens to be clean and the cost seems to be dropping down. In India, back then, the break-in time or the payback period was nine to 10 years, but now it has come down to three to five years, and it is expected to come down further to just three years in the next four to five years. Then as far as the subsidy for solar panels is concerned, we get about 78,000 rupees in subsidy, and the best part is because of the portal and because of the direct benefit scheme, we are able to get the subsidy in less than 30 days, which makes it extremely lucrative for all the families. So they can jump into solar without actually worrying about the direct benefit scheme. Earlier, it was extremely troublesome. So if somebody listening to somebody who installed solar panels three years back, don't worry, because now you'll get the subsidy in less than 30 days. Then we have something called net metering, which makes it very, very interesting, because a lot of families have the skepticism that Subhat, the solar charge is there, but what will be the path? But that's where the grid is not going out anywhere. It's just that the grid is there, and while the solar panels can produce electricity during the day, during the night, you can still rely on the grid and get rid of electricity from there, but it's just that because you're producing a lot more power in surplus during the day, and during the night, there is deficit. It balances out because of which your electricity bill still remains zero. And regardless of whether conditions, if there is monsoon or if you are in a region which is extremely cloudy, you can still depend on the solar panel, and if not, you still have the grid so that you can get consistent power supplies. So the skepticism of lack of power does not exist in solar, because you're not getting rid of the grid. Then when it comes to India, according to Elon Musk's calculation, if US requires 25,000 square kilometers of solar panels, India will require close to 6,000 square kilometers of solar panels to go completely solar in such a way that we don't have to buy oil. And solar is India's oil, is just that investors recognize it, but customers don't recognize it yet, but if we do together as a country, we will be able to reduce our dependence on oil, because of which the Godfather is extremely bullish on solar. If we end up doing this, then in the next 20 to 30 years, if at all we are able to skyrocket the adoption of solar, India will not have to depend on oil, if India doesn't depend on oil, and it doesn't depend on any other Chinese solar supplier, we will be able to control inflation, the economy will skyrocket and the hawkistic growth that we will be able to experience in the next 5 to 10 years will actually be fueled by solar, which is where companies like Varie, Solar Square and several of the companies happen to be beneficiaries. The one thing that I found very interesting is also the opportunity that exists in the solar space with regards to the value chain. You mentioned that OEM inverters and installers is where the biggest opportunity lies. OEM is for big guys like Tata, Arnise and Varie. But when it comes to install and forget, when it comes to inverters Chinese have occupied a large territory. But when it comes to install and forget there is a huge opportunity and here there are two messages one for the entrepreneurs and the other for the customers. For the customers the messages install and forget scheme doesn't exist unless you have somebody as dependable as solar square and you will have to pay a premium for it. It's not like you can just install a solar panel and forget. You have to rely on somebody who understands solar panels, somebody who's a legitimate brand and not go for unorganized players. Even if they're giving you a one lakh rupees discount because cheap solar panels are costly. And expensive. And the message for the entrepreneurs over there is that there is a huge opportunity in the install and forget segment. If you can help the customers install solar panels and let them forget about it, that will be incredible. And here solar square has this unique proposition of being able to maintain the solar panels for the next five years with the power guarantee strategy, which also happens to be a great strategy that other entrepreneurs can pursue. Provided the economics makes sense and they've only make sense with skills which means you will require venture capital to messages over here entrepreneurs need to raise venture capital venture capital. This scheme is extremely stable because solar square has already hit 350 crores in just nine years. So here if you can help the customers install and forget you can build a brand because even today 49,000 homes are still available as a white space for you to capture. 15 cities that solar square is in is a healthy market opportunity because you guys are already you guys have already invested enough into education which means there's more space. The beauty is it's a blue ocean because the market is so big that even if you have 10 solar square type companies, it's still enough for everybody to make healthy margins. And because the God for that likes you all of us all of you guys are going to make money. The one thing that I also want to throw light on are the variables that can probably change the costing of your solar panel. The cost that Shreya mentioned is for a specific house and as your layout floor state government charges technical charges and maintenance charges keep on wearing these charges might go up and down. The range is 2.93.1 Lex without subsidy and it is 2.1 to 2.3 Lex with subsidy. Okay and this is as of 2024. So if you see in 2030 and government subsidy is gone, then this cost apply does not do. As far as solar panels, solar squares, marketing strategies concern 35% comes from reference which is absolutely incredible. You educate homeowners through webinars, you also have a guide which I will attach in the description for everybody so you can download it and have a look at it. Do you guys have a YouTube video with this guy? Okay. I will also attach the YouTube video for you guys with the link in the description and 55% of your customers come through performance marketing and you don't have any celebrities yet. So an opportunity for the celebrities as of now. But thank you so much, Shreya. It's been a pleasure. I just hope this summarizes the entire discussion. Absolutely it does. Thank you so much. Thank you so much, Shreya. Thank you so much.