• Young Turks

This entrepreneur from Silicon Valley always wanted to return to India and create a business that was socially relevant. So, Inderpreet Wadhwa launched Azure Power in 2007 to power India’s energy needs with his solar solution.

Azure Power set up its first solar power grid in Amritsar in 2009 and since then the project has generated 23 lakh KW of clean energy to light up the lives of 20,000 households in rural Punjab. The company is yet to see returns flowing in but Wadhwa is convinced that solar power in India is a long term business.

Solar power is still a complementary source of energy in India, while at Azure he is trying to create solar grids to make it a primary source of energy. How exactly is the entrepreneur planning to do this? “I would still say it is a somewhat complementary source of energy. But there are many primary opportunities like areas where the grid is never going to go or it is much difficult to build a long term grid. Also, look at peak demands like opportunities where energy requirement is during the day, not at night time. The other opportunity lies in diesel gensets. India has almost 50, 000 MW of standby diesel genset capacity. So, where diesel is burnt mostly during the day and where there is power shortage, there is more requirement of energy. So, solar lends itself really well to reduce your cost of energy during peak times,” explains Wadhwa.

His business model is simple. He has a 30-year power purchase agreement with the Punjab state electricity board; his company sells them energy and then from the board’s sub-station they take care of the distribution, payments and collection of those 32 villages. “We don’t get into the end point distribution, we generate the energy and give it to the nearest interconnect point,” adds Wadhwa.

Today, Azure Power has under development 30 MW of solar grid power plants across Rajasthan, Gujarat, Haryana and Karnataka. Seed money came from Foundation Capital and Helion Venture Partners and Azure’s sustainable business model has also attracted investments of close to Rs.225 crore from International Finance Corporation and Overseas Private Investment Corporation. While Wadhwa believes that being an early mover in the renewable energy sector in India has helped, doing business has not been easy.

“We have to spend a lot of time educating people and even our employees who have never seen a 5 MW grid-connected solar power plant in their life,” says Wadhwa.

Wadhwa has plans to set up a manufacturing facility in India, though now he is more focused on creating good assets. Targeting 100 MW capacity, he feels Azure will break even by 2017. His future plans include having a portfolio of 100 MW by 2014. “We are roughly looking to have around 20-30 projects in the country,” adds Wadhwa.

And he hopes that solar power will be at par with other sources of power by 2020.

©Entrepreneur May 2011

Tags:
Azure Power, energy, foundation capital, grid, Helion Venture Partners, Inderpreet Wadhwa, International Finance Corporation, power, solar