Green energy has become affordable, sustainable, and reliable over the last few years, making it not just a viable option as an energy procurement strategy for businesses but also essential for their profitability and growth, industry experts said at Mercom India’s Commercial and Industrial (C&I) Clean Energy Meet in Noida.

The panelists also highlighted the challenges in creating awareness among micro and small businesses – typically with a turnover of about ₹50 million ($605,102) annually — which are traditionally focused on their core businesses.

They often lack the bandwidth to interpret government policies and the regulatory environment related to green energy adoption in their states.

The Clean Energy events bring the C&I sector face-to-face with green energy developers and financiers specializing in designing, implementing, and funding renewable energy solutions for businesses.

During the course of these events, MSMEs are exposed to various aspects involved in going green, including the technologies available and their suitability to different kinds of businesses, system costs, the return on investment, and the financing options available in the market.

Sanjiv Layek, Executive Secretary, World Association for Small and Medium Enterprises (WASME) said that micro and small businesses primarily focus on running daily operations and avoid making significant changes due to complex government regulations.

Layek added that platforms like the C&I Clean Energy Meets are essential in bridging the knowledge gap among MSMEs which can enable them to be more decisive in adopting renewable energy.

“MSMEs have tasted success in rooftop solar adoption, and they are coming back as repeat customers in the last 4-5 years. They realize that the savings on energy costs can be diverted towards paying the EMIs on their investment made for the solar systems, making it an attractive option without creating any additional financial burden,” said Shah Masood Jafar, Regional Head-North of Rooftops at Tata Power.

Further, businesses looking at sourcing renewable power in their energy mix have many more options than they did a couple of years ago, which include buying green energy at a premium from the power distribution companies, captive and group captive modes of open access, and rooftop solar, said Vinay Pabba, Chief Operating Officer at Vibrant Energy.

“Businesses can save 15-30% on energy costs with renewable energy,” Pabba added.

Major corporations in India have seen the adoption of renewables bring in additional incentives when dealing with international export markets, particularly from Europe and the U.S., which are paying a premium for sustainably manufactured products.

“As one of the largest steel producers in the country, sourcing green energy is part of our goals to cut emissions by 2050. At the same time, if we want to export to the world, we must meet their standards on green products,” Corporate Head-CSR at Jindal Stainless Limited Group said.

Jindal Stainless recently signed a pact with ReNew Power to develop 300 MW of utility-scale captive renewable projects to power its facilities in Jajpur, Odisha.

Financing renewables

The state-owned lenders — Small Industries Development Bank of India (SIDBI) and SBI — provided the attendees with the full range of financing options available to the businesses.

Hitesh Paliwal, Senior VP & Zonal Head, North Zone, Corporate Banking Group, SBI, said that the green power cost for MSMEs and corporates is usually half of the conventional power at ₹8-9($0.09-0.1)/kWh.

He added that the bank provides about 70% of the loan for captive or group captive projects with 15-30% of the promoter’s equity. When funding a project, the bank evaluates the quality of modules and the health of the offtakers as two of the most important aspects of due diligence.

“Our renewable portfolio is growing very well, especially solar. Fundamentally, we are also aligning with the targets the sovereign has set for itself,” Paliwal said.

Abhishek Kumar, DGM at SIDBI, said that the bank dedicated to MSMEs provides 100% of the project value as loans at an interest rate that ranges from 6.7% to 7.4%.

The Clean Energy events offer deep market insights that help C&I executives make informed data-driven decisions, along with helping the government realize its goal of installing 280 GW of solar by 2030.

Mercom India will host ‘C&I Clean Energy Meet’ series across major cities in the country in 2023.