Innovation

Since the start of this decade, the prices of solar panels have been declining drastically due to constant innovation and expansion of manufacturing facilities in China. In 2014, the prices of panels reached a point where generating power through a solar plant became cheaper than purchasing it from the grid. Dr. Anuvrat Joshi, Head of Business Development- India, described this moment as if "mankind had invented its new coal."

Cleantech Solar was incorporated in 2015 in Singapore. The company would partner with corporate customers to finance, develop and maintain medium-large scale solar projects on factory sites. Upon developing the project (which took a maximum of 6 months), the projects would start generating electricity which was charged to the customer on a monthly basis. Most parts of the tropical Asia-Pacific experienced 300 days of sunlight in a year ensuring high yields (and consequently, returns) on projects developed. With adequate scale, the business would have fixed receivables for 20 years (typical length of a power purchase agreement) from top corporate customers.

Cleantech Solar built top-quality energy infrastructure for companies on the back of engineering capabilities of its elite team. It mobilized capital towards action against climate change and enabled hundreds of corporate customers to join in in doing so. Further, the company provided cheaper and clean energy not just in developed countries but also in areas where electricity affordability was a genuine problem e.g. Cambodia, India, Vietnam.

Coca-Cola goes solar in Cambodia with Cleantech Solar

Inspiration

By 2015, Dr. Anuvrat Joshi, member of Cleantech Solar's founding team, had amassed a decade of experience in the power and renewable energy sector. He had co-founded and was the CFO of a solar start-up in New York City through which he had developed on-site solar plants for a winery and car dealership in the US. An Indian by birth, Dr. Joshi realized that there were millions of idle rooftops in India where he could replicate the same model and contribute to solving a massive problem of power outages/ shortages in the country. With solar power becoming cheaper than the grid, he was convinced that "mankind had discovered its new electric engine" and that we were at the cusp of a massive business opportunity.

Around the same time, a group of corporate and investment bankers with decades of experience for Barclays Asia-Pacific in senior management positions were looking for business opportunities. They wanted to invest in a business that : -

• was scalable
• had a short gestation period between investment and cash inflows
• effectively utilized their resources and networks built through the course of their stellar professional careers.

The solar developer business was appealing to Dr. Joshi for the same reasons as above. A plant can be constructed in <6 months and starts generating revenue from sale of electricity immediately upon completion. Further, revenues from a portfolio of $10M of solar projects were sufficient to run a 40-member company without any additional investment.

Therefore, Cleantech Solar was born with the intention of building a portfolio of solar projects for corporate customers in the Asia Pacific region. This way, the company would have a portfolio of long-term receivables from top-rated corporations that would generate stable returns and interest from larger institutional investors.

Overall impact

1. Cleantech's contracts are priced anywhere between a 20%-40% discount to grid tariffs thereby generating valuable savings in operating expenses for its customers.
2. The project utilizes idle space on the rooftop/ factory premises and provides cheaper power from an environmentally-friendly source. Over time, Cleantech was approached by its existing corporate customers to develop similar projects for their suppliers/ distributors. Thus, the business has enabled customers to progress towards achieving its sustainability targets without stressing out any of its existing resources.
3. As roof space was utilized for solar projects, companies started experiencing up to a 2 degrees reduction in temperatures inside the factories. This led to a further decline in electricity bills and generated considerable savings.

In December 2018, a significant stake in Cleantech Solar was acquired by the Royal Dutch Shell Group. Dr. Joshi considers this as a key achievement for himself and the company as the acquisition enables a Fortune 20 oil & gas company commence its journey away from traditional sources of energy towards an environmentally responsible and sustainable source.

Business benefit

Since 2015, Cleantech Solar has grown to become India's #1 rooftop solar developer and the only company in the space to have a pan-Asia presence. The company has operations in 8 countries in Asia- India, Cambodia, Thailand, Malaysia, Singapore, Philippines, Indonesia and Vietnam with at least one office in each country.

The company hires ~100 employees globally and generates indirect employment for several others through contract arrangements for lead generation, project construction, and maintenance. The company offers flexible working arrangements in terms of location and hours and has a relatively flat organization structure that allows employees easy access to management. This has enabled Cleantech to attract and retain top talent through its growth phase.

The company has successfully raised millions of dollars of capital from the World Bank, European governments and an oil & gas company and mobilized it into an upcoming asset class.

Over the last half a decade, Cleantech has created wealth for several stakeholders alike- promoters, investors, employees, government, and customers- while channelizing these wealth-creation efforts in the battle against climate change.

Social and environmental benefit

1. Solar power reduces the carbon footprint of the business and thereby of products entering the market that are eventually used by the consumer. As Cleantech gradually expands operations along the supply chains of major corporations, it enables an increasing number of products to be manufactured with a reduced carbon footprint.
2. Given its wide geographical footprint, Cleantech has managed to mobilize capital from global funds into developing and underdeveloped nations such as Cambodia, Vietnam etc. that were traditionally considered as risky investments.
3. Through its operations in countries mentioned above, Cleantech generates means to earn a living for hundreds of contract workers right from construction of the plant through the entire 20-year maintenance term. Further, it has effectively transferred elite know-how of a little known asset class to these countries that are still building the foundations for long-term economic success.

Interview

Dr. Anuvrat Joshi, India Business Development Director

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