Abu Dhabi: Expected cost reductions in solar technology are not enough to extend solar energy to rural markets in the developing world as there are many other challenges, a solar industry executive has said.
"We foresee incredible cost reductions in solar technology. But these cost reductions will not be enough to speed solar to rural markets in the dev-eloping world," Damian Miller, CEO of Orb Energy, a solar energy company in India, said in an email interview.
The company will also need to reach out to service the products as well as deliver the products with consumer finance, he said.
Prize categories
"So I actually see plenty of challenges ahead for us in the next 5 to 10 years," said Miller whose company is one of the 13 finalists in the race for prestigious Zayed Future Energy Prize.
Orb Energy has been nominated in the category of Small and Medium Enterprises and Non-Government Organisations (NGO). The winner and the first and second runners-up will get $1.5 million (Dh5.50 million), $1 million and $500,000, respectively, in this category.
The other categories are Large Corporations (no monetary value but a recognition award) and Lifetime Achievement for Individuals with a $500,000 prize.
Established in 2008 and inspired by the principles of the founding father of the UAE, Shaikh Zayed Bin Sultan Al Nahyan, the awards commemorate his pioneering efforts in laying the foundations of envir-onmental protection and sustainability.
Orb Energy has made significant progress in establishing itself in India's sustainable energy portfolio with a vision to connect India's energy-starved villages to a grid and highlight solar-powered electricity as an attractive and practical solution.
Achievement
Miller defined his company's achievement in one sentence: "Making solar accessible, affordable and hassle-free to thousands of Indian customers who are looking for a better energy alternative."
In five years, Orb has set up 125 directly-run branches and manages an extensive network across four Indian states.
The company has sold approximately 30,000 solar systems, benefiting an estimated 130,000 people and creating 550 jobs for skilled workers.
Investment
Orb has partnered with 20 local banks which are convinced of the returns on investment for solar installations and are helping the company to effectively serve the remote markets.
"Between now and 2015, we want to expand our retail branch network from 100 branches in four states to 500 branches across all 28 states in India.
"There is a market in all states for our products, and we intend to reach them," Miller said.
"In addition, we will invest heavily in advertising to raise awareness of the unique products we have developed such as our plug-and-play range of small solar systems. It is our ambition to ensure that solar power is firmly planted in the minds of Indian consumers," Miller said.
Lack of money should not be an excuse for Small entrepreneurs
Although Small and Medium Enterprises (SMEs) need equity capital to get going, they should avoid using the excuse of not having sufficient funds, said Damian Miller, CEO of Orb Energy, a solar energy company in India.
There is always improvement to one's own management that needs to be reflected and acted upon, he said. "It's not just about the money."
At the same time he admits that the company being ‘small' and the innovation may be untested or relatively new in the market, raising such capital is not easy. "But once you have the money, then, really it's all about managing the innovation process effectively," the CEO explained.
The company partners with 20 banks in India which provide finance to their customers.
"Finance is critical to our customers' decision to buy solar and their ability to afford it. But I would also caution against thinking that partnerships are the solution. I believe it is also important for a company in this space - particularly SMEs who are more vulnerable - to have core aspects of their business ‘under their control'. Also, keeping more under your control means that you are better able to improve and guarantee the customer experience," Miller explained.
SMEs play strategic role
About the strategic role of Small and Medium Enterprises (SMEs) in catalysing the industry, Miller said: "All big companies were once SMEs; and as we know from the history of the solar industry, it is often the SMEs that go on to become bigger, successful companies, while the larger corporations such as the oil companies often struggle to innovate in the same way."
This is especially the case when it comes to on-ground delivery in the developing world, he said.
"In this way, SMEs are critical in bringing energy innovation to the market and building a viable firm around the innovation, thereby creating a precedent for other companies to follow. Only this way can the innovation in question be widely adopted and diffused rapidly through society," the CEO explained.
Prize gives dreams
If Orb Energy wins the Zayed Future Energy Prize, the CEO will invest the money in turning the company into the largest solar company explicitly focused on delivering solar solutions to customers in developing world markets.
"Our ambition is to build a company and a legacy that endures beyond all of us at Orb. We hope to offer access to solar power to the hard-to-reach places of the world in a way that builds a sustainable solar infrastructure and allows tomorrow's energy innovations to continue to flow through it," Miller said.
It will aim to develop new solar products for the market including dryers and cookers for large institutions as well as smaller solar products for clients with smaller budgets, Miller said.
"We will also pioneer our own finance delivery mechanism that has the potential to completely unlock the solar markets in India."
Being recognized by such an acclaimed industry award will undoubtedly have an immense impact on our business. "It will enable us to roll out our unique branch model across India and enter the international market," the CEO said.
