Rooftop solar has now become mainstream among C&I customers: Orb Energy

In business since 2006, Orb Energy is a comprehensive solar solutions focusing on the SME sector. Right from manufacturing its own modules to putting up solar plants, Orb Energy also provides innovative solar financing options. In this exclusive interaction, we have Damian Miller, CEO & Founder, Orb Energy, giving a comprehensive overview of the company’s range of activities, apart from sharing keen insights into the solar power industry. Miller is confident that Orb Energy can contribute towards accelerating deployment of captive solar rooftops in the C&I sector, especially by SMEs. An interview by Venugopal Pillai.

Let us start by understanding Orb Energy’s solar panel manufacturing business. Where is your manufacturing plant located, and what is its current capacity?

Our head office and manufacturing unit is located in Bangalore. We launched in 2006, so as of October 2nd this year we will have been in business for 18 years! We started off as an off-grid focused solar company, as at that time, solar was too expensive for grid connected solar. But over time we have moved to become an on-grid solar company,  which is typically ranked in the top 5 rooftop solar companies (2021 – 2024) by Bridge to India, and ranked top 3 by JMK Research & Analytics in 2024.

We are unique as a company in targeting the SME in India. We do this because see that SMEs are largely under-served. To be effective in this segment we bring our own in-house finance, with financing up to 12 years at competitive rates and we have our own in-house manufacturing of solar panels. Why do we make our own solar panels? To be more cost competitive, and to ensure we bring the highest quality to our SME customers. Also most of our SMEs are manufacturers, and so they like dealing directly with a manufacturer too.

All of the solar panels we currently produce go into our rooftop and ground mounted solar systems for SMEs. So as a vertically integrated player, our manufacturing capacity is not necessarily that big (currently 80 MW scaling to 200MW in FY26). But it is more that it is very high quality, and we bring some unique solar panels to the market particularly suited to rooftop solar applications.

 

Where do you source solar cells from? What is your view on India’s current self-reliance in solar cells?

We currently source our cells from China, because the indigenous production of solar cells in India is still not sufficient to meet market demand. Supply of cells in India is currently around 2-3 GW and the total India market was 15.6 GW in CY2023. That said, many investments have been announced, and the PLI scheme is now supporting indigenous manufacturing of not just cells but wafers too. We are very encouraged that in 2-3 years we should be able to source our solar cells in India, and further reduce our reliance on China.

We are a big advocate of more self-reliance in the manufacturing of solar for India. Solar will become deeply strategic for India as a source of electricity by the second half of this century. It is not hypothetical that by then more than half of India’s electricity will come from solar. For reasons of energy security, India must develop its own indigenous manufacturing to be able to meet both its energy independence and its climate change targets.

 

We understand that Orb Energy offers a full value chain for C&I customers including supply of solar panels, erection & commissioning, and even financing. Please discuss.

Yes, we are unique in India in bringing a vertically integrated offering to India’s SMEs. We manufacture our own modules, we do all the system design, oversee installation and commissioning, and as you rightly say, we also offer our own in-house finance which is totally unique in India. We do not ask our SME customers to race around to various banks to procure financing, we bring this in-house with zero collateral required, and at zero down payment, with credit financing terms up to 5 years at 12 per cent interest. Again, we offer this off of our own balance sheet, and we control the process so that we can give an SME easy, fast finance in just 7 days provided all documents are forthcoming.

In addition to the above, I’d like to add that we also provide exceptional after-sales service as further evidence of our end-to-end, vertically integrated approach. We are also unique in providing three free after-sales service visits to the customer in the first year, wherein we don’t wait for a complaint, but rather schedule visits preventatively to health check systems and enhance customer education. From year two onwards we provide annual maintenance contracts which can include just labour or labour and parts too. We also provide exceptional cleaning services to ensure that power generation is maximised from a system.

 

How do you gauge the overall inclination of C&I customers to go in for captive solar rooftop solutions, with a view to optimizing their energy costs?

We see that rooftop solar has now become mainstream among C&I customers. We work with SME proprietors mostly, and they already have a very clear understanding that solar represents the lowest priced electricity available in India today. The 25-year amortised costs of solar are Rs.2-2.5 per kWh, and payback is just 2-3 years, as the typical cost of grid power is much higher at Rs.8-9 per kWh. This understanding that solar is now a no brainer is very well understood by C&I customers.

Also, C&I customers are well aware that for solar they receive a 40 per cent accelerated depreciation against a solar asset. This provides an extra sweetener that further enhances solar’s reputation among C&I customers.

Residential customers are still coming around to understanding rooftop solar. But the PM’s recent scheme Surya Ghar Muft Bijli Yojan which provides a subsidy of Rs.78,000 per residential system (with the possibility of additional state subsidy) has definitely raised the profile for rooftop solar among domestic customers. Residential solar now has a 4-5 year payback, and more and more residential customers are making the jump to solar.

 

Given that grid power is generally improving and options like Open Access (OA) exist, are C&I customers still receptive to captive solar plants? What has been your experience?

Yes, C&I customers still remain very receptive to captive solar plants. Remember that for SME customers, when it comes to rooftop solar nobody is serving them with PPAs. First of all SME’s don’t like PPAs (the lack of ownership, the lack of access to their own roof, the much higher cost of PPA – 3x over the lifetime – compared to ownership). But it’s also that PPA providers target BBB+ and above customers, which are mostly corporate customers. This restriction leaves out most SMEs. For these SMEs ownership of their own rooftop system makes sense.

The same applies to open access and PPAs for ground mounted solar. Typically, providers of ground mounted solar under a PPA approach will look for customers 5 MW and above. Also, debt providers to PPAs for ground-mounted will again want to see credit profiles of BBB+ and above. For both reasons, SMEs will be excluded. SMEs typically want 1-5 MW of ground-mounted solar in our experience, and they will not be able to get a PPA for this under the open access model. Instead, what we do is allow SMEs to own a portion of an overall solar park (e.g. they each own on average 2.5 MW DC in our first 35 MW DC solar park in Arsikere, Hassan). This approach is favourable to SMEs as it does not preclude them from open access due to their credit profile, and we as a company are quite happy to serve them in the 1-5MW range. In our model, the SME owns their own sub-array in a solar park, and they use the power generated from that to offset their electricity bill. It is a very attractive proposition to the SME with 3-4 year payback and excellent returns on investment.

 

We understand that states utilities do not have uniform policies with respect to gross and met metering for captive (solar) plants of C&I customers. Does this impinge upon the growth of the captive solar industry?

It’s not necessarily the lack of uniformity that is an issue. Electricity is a state subject in India, so there will always be a lack of uniformity. It’s more that some states have policies that are just regressive when it comes to solar. For example, in some states there is a grid charge placed on solar, or in some states approval of a net metering is an absurdly long, bureaucratic process that might never be achieved! So of course, these kinds of regressive policies hurt solar.

But some states such as Karnataka go above and beyond the Centre’s guidance of capping net metering at 500kW, and actually allows for up to 2 MW of rooftop solar to be grid-connected. In such examples, the lack of policy uniformity is actually beneficial to solar!

 

How can the existing policy framework be made more supportive towards captive solar installations, especially for the C&I consumer segment?

The key challenge in the C&I segment is not that customers don’t see the advantage of solar, it’s that they have so many competing priorities in their business, that they might not ‘prioritise’ solar as an immediate investment. They kick the can down the road, so to say.

So any policy that gets a proprietor to focus on solar NOW is a policy that would drive captive solar installations forward. In our thinking the most elegant policy support that exists is the accelerated depreciation benefit of 40 per cent. SME customers really like this, and it supports their investment decisions. But if this was returned to 100 per cent accelerated depreciation (which is used to be close to two decades ago) then I am sure it would focus the mind of C&I customers to invest in solar NOW. That is, to prioritise solar now, and not wait further.

 

Tell us in brief about Orb Energy’s ground-mounted solar business, which we understand is in the form of “solar parks”. Does Orb Energy own these parks, with several C&I customers buying their own capacity share? Please explain the business model, explaining how exactly C&I customers derive benefit from such “non-captive” capacity?

We saw a gap in the ground-mounted solar park business, and brought our SME-centric model to bear on the market. We saw that it was difficult to manage sales of power to multiple SMEs under the group captive model, and that debt capital for such projects would be challenged. But we did see a potential for SMEs to own their own sub-arrays (and the land underneath it) as part of an overall solar park, and launched this approach with our 35-MW solar park in Arsikere (near Hassan in Karnataka).

This has worked out very well. We have 14 SMEs who have all purchased a sub-array/plot within the overall solar park, and we expect to finalise commissioning later this financial year. We are already working on solar park number two in Karnataka, with strong expressions of interest.

For us it is very natural to enable our rooftop customers who have bigger electricity needs than their rooftop can support, to go ‘off-site’ and own a mini-solar park to further reduce their electricity bills. Many companies such as foundries, precision component companies, die-cast companies, who use electric furnaces, will have big energy needs and relatively limited roof-space. So providing them with an off-site solution is the key to enabling them to go solar and enhance their competitiveness and green credentials in their industry.

To compare if you take the 25-year amortised costs of a mini solar park compared to purchasing grid electricity, the cost of off-site solar is Rs 3.5 per kWh compared to the typical grid electricity price of Rs.8-9 per kWh. The payback is 3-4 years, and the returns on investment are extremely compelling for the SME.

 

Given that India’s renewable energy ambitions are resting largely on solar power, how do you see the years ahead for Orb Energy? What do you consider as your main business growth drivers?

Our main growth drivers are our vertically integrated approach to rooftop solar for SMEs coupled with our innovative approach to off-site solar (solar parks) for SMEs with big power needs. This combined with our suite of offerings such as in-house finance, and exceptional after-sales service, means we are well positioned for not just growth, but sustainably profitable growth in the years to come.

 

All industrial photographs seen in this interview pertain to Orb Energy’s solar module manufacturing facility at Bengaluru, Karnataka.