INVESTING IN SOLAR SQUARE

As the world continues to find ways to solve for climate change, the urgency to transition to clean, renewable sources of energy has never been more critical. At Elevation, we believe investing in groundbreaking solutions that turbocharge access to clean energy is critical to support India’s aggressive climate targets. Solar energy has emerged as a key opportunity in this shift and harnessing even a fraction of this energy could go a long way in reducing our reliance on fossil fuels, which currently account for 80% of the world's energy consumption and are the primary driver of greenhouse gas emissions.

Over the last decade itself, power consumption per capita in India has increased by over 30%, with coal-based power accounting for 70% of electricity production. India is expected to be the most populous country by 2027 with a growing economy - meeting its energy demand with traditional fossil fuel sources would not only be environmentally damaging, but also unsustainable in the long term. With over 300 sunny days in a year, and governmental targets of  450 GW of renewable energy capacity by 2030 - we feel solar energy will play a critical role in supporting India’s energy demand in the coming years.

We expect India's energy consumption to grow by leaps and bounds as we move to a $5k GDP/ capita economy and beyond.

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At the same time, due to technological advancements and widespread adoption of solar globally there has been a considerable reduction in the costs of solar panels (50% reduction globally over the past decade). These effects together have made solar a viable energy source, one that is a relatively small ticket investment, and can be installed at the individual household level.

For the typical household - a 3kW rooftop solar installation system costs about USD 3k and at current electricity prices breaks even on the investment within 5 years, generating free electricity for the rest of its 25 year lifetime. Today, one can find solar panels installed in rooftops across 400k+ homes in India, with value-conscious consumers in Tier 2 & Tier 3 cities leading this movement. These families are able to significantly reduce their monthly electricity spends by moving to solar, at the same time impacting the climate positively.

In addition to the inherent advantages of rooftop solar, the government has actively pushed for adoption of solar as part of policy, setting state level targets as well as subsidies to promote solar adoption.

However, in spite of these obvious tailwinds and trends, we have struggled to keep par with central and state level targets. We believe the market today is plagued by some key challenges -

• Lack of consumer understanding: The benefits and ROI equation in getting solar is still missing amongst most potential consumers, leading to low adoption rates.
  
• Lack of trusted installers: Solar is a high ticket purchase for the common household and requires considerable trust & assurance that it will pay off, which local installers fail to garner due to adhoc processes and solutions.
  
• Poor quality of installation: To conserve roof space, most households in India install solar panels on an elevated structure. However, the creation of this structure is non-standard leading to low quality installations.
  
• Service standards: Solar panels need to be serviced regularly to generate optimum output. Today, local installers do not focus on after sales service, resulting in suboptimal performance as well as loss of trust.
  
• Access to finance: As solar grew as a % of overall energy consumption in other geographies, better access to finance (through leasing/credit options) followed. We believe in India too, newer financial products to promote solar adoption will be required, and an organized entity would be in a strong position to help create this.
  

As we worked on building our thesis for solar we became excited as a team about it's role in India’s energy future, but felt that the many broken pieces in the equation make it a complex problem to solve. That’s when we came across Solar Square, a unique team which was willing to roll up their sleeves to tackle these hard nuts and bolts challenges, coupled with a truly tech-first approach to building this category and business.

Founded by Shreya Mishra, Neeraj Jain, and Nikhil Nahar in 2014, Solar Square started out with solving for commercial & industrial solar projects installations as a bootstrapped business. In 2020, the team hit upon the realization that the payback period for residential solar devices had reduced considerably since they started out and pivoted the business to focus on residential solar. Capitalizing on a proven technology that is becoming increasingly economical, and driven by the mission for leading India’s transition towards cleaner energy choices - the team is focused on building an ecosystem to help Indian households make this shift with greater trust and ease.

Solar Square is on a mission to become ‘India’s most trusted home-energy brand’ and offers a full-stack service which provides customers a seamless way to solarize their homes. Starting from solar consultants who educate customers, Solar Square follows a tech driven approach in the design phase, helping customers with visibility and information through the entire process. With innovations such as standardized installation structures & customized delivery vehicles - the team is able to deliver a prefabricated product that no longer needs to be welded on site, in record time. Solar Square also offers monthly maintenance to ensure long term plant performance. Finally, by having its own proprietary app and access to data from installed devices, Solar Square is able to intervene whenever one of its systems is producing a sub-optimal output.

Within 2 years of pivoting to a residential solar focus, Solar Square has been able to spread solar to over 5000 homes & housing societies across Madhya Pradesh, Karnataka, & Maharashtra. Beginning from Bhopal, Solar Square has followed a city-wise approach in creating proper processes that make it easier for households to switch, enabling it to become the leading installer of choice in these cities (with over 30% share of market within Madhya Pradesh, their original market!)

Our conversations with Shreya, Neeraj, & Nikhil made us not only appreciate this opportunity, but their commitment to the larger mission of enabling cheaper, cleaner access to power for India. Their obsession around consumer pain points & process efficiency came out strongly with each successive discussion we had - convincing us that this will be the team to democratize access to home-solar in India.

We’re extremely excited to be partnering with the team in their Series A fundraise. The team’s first-principles approach in solving this very important and immediate problem, made them an obvious choice for us to partner with as our first commitment within climate-tech. With their consistent will to improve the experience for the customer even further, we believe Solar Square will lead Indian households towards better energy choices.