Fourth Partner Energy: Exploring new ground

Aiming to enhance quality of life while conserving the planet, Fourth Partner has ventured into the disruptive sector of solar power

Officials at Manak Bhawan, headquarters of the Bureau of Indian Standards, in New Delhi proudly show off the rooftop solar power facility that was recently installed. The 45-kw system, with back-up, takes care of outdoor lighting and saves on the electricity bill.

This is one of the projects in the portfolio of Fourth Partner Energy Limited (4PEL), a Hyderabad-based company aiming to both harness renewable sources of power and create awareness about these. The company has secured Rs 3 crore from Chennai Angels.

"We are named so because the fourth partner in any of our projects is the customer. We aim to enhance the quality of human life while conserving our planet," said Vivek Subramanian, executive director.

FACT BOX

• Area of business: Solar power
• Founded: 2010
• Funding: Rs 3 crore from Chennai Angels

Founded in 2010 by Subramanian, Saif Dhorajiwala and Vikas Saluguti, the focus is off-grid solutions in solar power. The model of installation and supply is simple. The company invests in rooftop solar solutions and charges for the power supplied.

"We offer significant economic benefits, while significantly de-risking the proposition. The value accrual is tangible and immediately visible," said Subramanian. He said they convince the customers to use grid-connected solar power systems (without batteries) to reduce their electricity bill. Solar power constitutes 20 to 40 per cent of the total power consumption.

Amortised costs of solar systems (over a 20-year period) are as low as Rs 4-5 a unit. The payback time for a 20-year asset is four to five years.

The company has completed around 300 installations, especially in the south. Having built end-to-end capability, including design, turnkey execution, servicing and financial structuring of captive assets, 4PEL is positioned to take a leadership role in a disruptive market segment.

"The company aims to finance, build, develop and manage a large operating portfolio of de-centralised solar power assets in India, by positioning itself as a full-services renewable energy services company. The team works with commercial and industrial clients, to provide tangible commercial benefits," said Subramanian.

Fourth Partner has an impressive list of industrial customers, including ICICI Bank, for which it installed solar power facilities at 200 sites.

The company has also provided services to educational institutes in Chennai, Delhi and Guragon, and Svasara Resort-Tadoba sanctuary in Maharashtra.

The government is planning to keep rooftop-solar target at 30,000 Mw, of the cumulative solar power capacity target of 100,000 Mw planned to be achieved in five years.

At present, at 285 Mw, rooftop solar accounts for 10 per cent of India's total installed capacity, said a report by Bridge to India (BTI), a consultancy firm monitoring investments in Indian renewable energy.

Chennai Angles, which invested in the company, said the mood is very positive on clean energy, with the new government under Narendra Modi putting focus on the sector.

"We are convinced the distributed power segment will see explosive growth over the next few years. This disruptive application will call for financial engineering and execution skills, both of which Fourth Partner Energy possesses in abundance. We have full faith in the management team and believe they will emerge as leading lights in this fast-growing segment," said Narayanan R from Chennai Angels.

BTI's report also said 40 per cent of all states have reached commercial grid parity and availing the accelerated depreciation benefit of the Centre would make rooftop-solar viable for these states.

"Installing rooftop solar will entail a lot of challenges but it's one of the most viable solutions for the country, with most regions receiving sunlight for around 300 days. If the infrastructural issues around metering, evacuation, etc, are taken care, rooftop can add 1.5 Gw by 2018 to India's solar capacity," said Vinay Rustogi, managing director at Bridge to India.
EXPERT TAKE: Karan Dangayach

Rooftop-solar generation, both photovoltaic (PV) and thermal, represent a significant opportunity for the country to tap into a clean energy revolution. It is no secret that the cost of energy produced from coal and gas is increasing. What is more important to realise is that extraction of the energy source (coal or gas), processing, production of energy at power stations and transmission and distribution over vast areas have significant externalities in terms of environment and health costs.

The time is ripe for a densely populated country such as India to think of decentralised energy applications. It has been found for some applications, that to produce energy at source using solar PV can be cheaper than the conventional way of doing things.

Both solar PV for energy generation and solar thermal for water heating represent a significant leap in energy applications, changing the way we produce and use energy.

Levelised cost of energy (LCOE) is the barometer used to compare the lifecycle cost of an energy source. Grid-connected rooftop solar PV is now the cheapest source of energy. It is cheaper for a consumer to use rooftop solar PV over the life of the asset by this measure, compared to using conventional power (considering some geographical exceptions). Solar thermal-based water heating has very attractive return on investments as well.

Entrepreneurs must look at this sector with the lenses of elation and caution. As it is a sector with huge opportunity, the challenges are as huge. Challenges include strong links to subsidy regimes, capital-intensive projects, and a lack of consumer awareness. Skills which need to be honed will include supply chain management, project financing, and general management acumen. Overall, it is an extremely rewarding sector to be in, where purpose and profits marry each other.

Karan Dangayach, head, business development, Shashwat Cleantech