Being one of the one of the largest players in the power backup market today, Sachin Bhalla, Vice President Marketing, Luminous believes that the power backup market will slowly complement solar market and hence, both businesses will converge.
Are bulbs, fans and sockets renewables? If you look at Luminous as a company, we have two different product lines. One is the power solution business and another is home electrical business. In power solution business, we have two kinds of products. One is power backup product and another is solar product. So, today solar product accounts for 10 per cent of our overall business.
Is there a storage system in solar products too? We have six kinds of systems and they are what you see displayed in our booth here. We have a DC system which comes with power backup and a charge controller panel. Then we have a system to upgrade your existing power backup system. Let us say you have a power backup system and want to upgrade that to solar. We have a small retrofit box to which you can add a panel and convert it to a solar panel.
Are you importing them? We are buying them from India. We get them made as per our quality specifications. We sell everything: we have inverters, PCUs, hybrid inverters, small retrofit devices to convert your existing power backup system into solar, panels and batteries.
When did you start this solar business? We started our solar business six or seven years ago. We are focused on residential and small commercial markets, which have started gaining traction in the last three or four years only. We have introduced a lot of new products in the last few years. We have launched six types of solar solutions. The solar business comprised 7 per cent of our total sale a year before, and today it is 10 per cent. It is growing pretty fast for us and we believe that solar is currently the highest growing segment of our business. We are one of the largest players in the power backup market today. We also believe that the power backup market will complement become solar market and hence both businesses will converge.
There are a lot of players, so competition is quite high. How are you taking this challenge? What kind of innovation are you coming up with? Competition is strong, but you need to build value proposition for customers. Why should a customer buy less than a Luminous solar panel? First of all, you have to bring some innovation. There is a product called Regalia. This is a wall-mounted solar inverter with inbuilt lithium ion batteries and touch button, made in our factories in Himachal Pradesh. This is the future of how power backup systems in homes will look like. With a lifespan of 10 years, it is quite efficient in how it works. It has a transformer case inverter that is also long-lasting. We launched it in November this year.
What is the market share, specifically in power solutions? I would say around 35 per cent plus in the segment of electric power system (EPS) and 25 per cent plus in battery segment.
Can you give us an understanding of the overall power backup market in India? The challenge is that solar energy is procured only during day time. Especially if you look at homes, most of the energy is consumed in the evenings and nights because most people are not at home. In the evenings, kids and others start returning home. Two air conditioning systems run, microwaves are on and the load gets high. So there is a need to store power. The moment you bring in batteries รป which is the right thing to do - the cost of the system goes up. This is where we need a balance. How do we bring in the battery and at the same time keep the cost of system low? That is something the industry has to resolve. The government also has to provide some incentives for pushing more battery-based systems.
Incentives such as? For example, today subsidies are largely related to grid systems. There are very less subsidies related to battery-based systems. It becomes easy to sell, if the government provides subsidies for battery-based systems. There can also be incentives for people converting their existing power backup system into solar.
How viable is it for a solar micro grid to connect with a battery-powered system? It is viable, but it is not for the main stream. It is for people who do not have any electricity at all.
And how is the demand for these solutions? Very good. The solar energy sells quite well. The first system that you see there, high capacity upgrade, sells quite well. Especially in areas that experience more than four or five days of power cut, people want solar and backup systems as well, and these systems do very well. They are cost-effective and generate a good amount of power.
When you talk about single units - residential or commercial - do you target new projects, already existing projects, single unit holders or single householders? Only single householders. This is how we do business. Luminous is a retail company.
What it means is that we do not do projects. We do business through our partners. Our role in this model is we enable, let us say, 10,000 dealers all over the country, who will have our products and knowledge of how to install our products. And, we have a brand and service network to take care of service. Our partners prospect for customers, take care of actual installation and so on.
In terms of residential vis-a-vis commercial, where do you hold maximum share? The biggest market actually is solar farms. Commercial market is the second biggest and the third one, which is only 5 per cent of the total market share, is the residential market. Though homes is just 5 per cent currently, it will grow much faster than the rest of the categories going forward.
How many factories do you have? We have seven factories with an overall capacity of around 210,000 batteries per month, and we have similar capacity for our inverters as well. Utilisation is more than 100 per cent. We are increasing the capacity of every plant by 10 per cent, and expansion will continue to happen next year. For solar products, we are going to increase capacity by 15 to 20 per cent.
Which are the factories you are expanding? That planning is done by our factory team. During planning, all factories get impacted. Let us say, one factory is making plates and another is doing something else. We redistribute work for capacity expansion based on the availability of area, machines and so on. I am not looking at that aspect. From the marketing side, I need certain volumes, and as long as I get those volumes, I am happy.
- RAHUL KAMAT