Interview: SMEs can power India’s growth with right incentives

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Linus Lobo is the Chief Operating Officer of IPFonline- trade information and service provider of Industrial and Engineering Product reviews. The fundamental focus of  IPFonline Ltd is to offer industry information about various engineering products, related categories and their manufacturers, as well as services and their suppliers.

Why has IPF Online started focusing on renewable energy products while it has mainly been known as an industrial products portal?

Industrial products try to bring about efficiency and productivity gains. In a country like India, there is a constant gap between peak energy demand and supply. Last year we added a record amount of new capacity in power but this energy gap still increased. We believe that in order to bridge this gap much faster, there are three things that can be done- firstly by bringing about efficiency in the use of energy, secondly by bringing about renewable energy as a source of supply, and thirdly a capacity addition to the conventional measures.

IPFonline has a number of such projects like solar powered lanterns, solar powered pumps and solar powered air conditioners. In our country we are giving free electricity to farmers; instead why not give them a solar powered pump? This will help in improving the efficiency of pump usage as well as decrease dependency on grid power supply. So there are tremendous amounts of advantages if you are able to take products and innovate using technology and renewable energy. When talking about renewable energy, we should not just talk about solar photovoltaic cells, but also about solar cells that actually power a pump so that the actual generation of electricity is at a place where it is going to be used so that the dependence on grid electricity goes down.

We have a market of over 15,000 subscribers, and our reason for business and existence is to encourage entrepreneurs. We used renewable energy as a thought- that you create the products and we will showcase them. We want to take such products across India through the different mass media channels. So by taking up renewable energy as one of the focus areas of IPFOnline, we would be showcasing ideas, innovations, etc. that can help to bridge the energy gap.

Since IPFOnline is an industrial products portal, do you have an estimate of people who mainly advertise green products?

It is very difficult to say because we have over 40,000 products and over 19,000 companies on our website. Economically we are seeing that margins are going down, that inflation is going up, and that the competition is increasing. Everyone is moving towards more efficient products. If you look at televisions, earlier we had a big box, then we moved to LCDs and now LEDs. LED, which is the most energy efficient of all three technologies, is being used today in factories for lights, for control panels, etc. So in a way, industry is very quick in using more energy efficient products everywhere.

I am not so worried about industry adopting technology. Industry will adopt technology. To a large extent, it is subsidies which distort. In the farming sector you will find that there is a lot of wastage. People are not moving towards more productive means because they are getting certain subsidies.

There is certainly a lot of potential for renewable energy in India, but still a lot of it has not been achieved or realized. What do you think is the challenge?

I think the reason is- we rely too heavily on the government, and I think even the government is relying too heavily on itself. I feel that if the small and medium enterprises are encouraged enough and given the right incentives, then I think the SMEs will do it on their own. If every entrepreneur is encouraged to rely on their own energy source, with the government offering help by subsidizing the technology so that a renewable energy source is chosen, it is then that decentralization can be achieved. I think (ideally) the government can achieve ten-fold more progress if it allows industry to help itself rather than trying to do everything by itself.

India had always faced this dilemma of cutting emissions and ensuring power for all. Do you think decentralized renewable power generation for rural electrification is a viable solution for this?

It certainly is and we cannot take away any credit from that thought process. If every farmer gets a solar powered pump, it is certainly of use not only to the farmer but to the grid as well. 

Since the farmer today is not paying for electricity, so for that free consumption, he is using an old pump and does not want to invest in a new one. If the government is going to give subsidies, it ought to subsidize such products (solar pumps). Rather than giving electricity free to the farmers for the rest of their lives, an agreement can be reached where the government agrees to pay half the cost while the farmer pays the other half. If subsidies are to be given, they ought to be for productivity rather than for the sake of wastage. That will make more sense for the country, for the farmer, and for the entrepreneurs developing products.

I visit Bengaluru and Karnataka quite often. Every house on the rooftop has got solar panels. When people cannot rely on the government to give them power, they decentralise. So, rather than forcing people to decentralise, why doesn’t the government encourage people to reduce the energy consumption of every building by putting solar panels and recycling their waste. 

We do have the National Solar Mission etc now under the NAPCC, how hopeful are you about that?

Well, the National Solar Mission is still evolving. Let us look at the policy today. There is a single policy across India.  But, certain states have a natural advantage, such as Rajasthan and Gujarat, where the radiation is far greater than in other places. So naturally investment flows towards Rajasthan and Gujarat, rather than coming to West Bengal or to a state where radiation is low. At the same time, maybe Rajasthan and Gujarat are not so keen about solar but are keener about the conventional forms of energy. I think the government needs to see where the interest is coming from and encourage the interest. 

India is an extremely diverse country and maybe West Bengal requires a unique policy while Gujarat requires a unique policy. Perhaps it makes more sense for the government to bring down the power of the National Solar Mission down to the state level, rather than making it a National Solar Mission. And I think it should lead every state to encourage it within its state.

With the Jawaharlal Nehru National Urban Renewal Mission, the government has allowed the states to develop or come up with their Urban Renewal Mission plans and it will refinance them, or subsidize them or give money to the state. It should do something similar with the National Solar Mission and with renewable energy programmes. It should let the state come up with the program and either fund the state or give the state a subsidy or a fund. The state will show the government how many projects it has and accordingly get money.  But the initiatives should come from the state and there will be far more localized programmes then.

Do you think policy measures are sufficient for promoting renewable energy in India, are there any particular areas in which there should be more focus? 

We have 300-350 million middle class people and another 700-750 million are still poor. As more people start consuming or coming into the economic mainstream, our power consumption is going to grow dramatically. How we will reduce our per capita carbon footprint is the issue. Keeping in mind the amount of energy wastage in this country, there is certainly a case for biomass and wind energy. In the same way that we are relooking at solar today, certainly there is a case for relooking wind as well. I think people were not looking at the viability of wind earlier. We need to look at it more holistically rather than just look at the depreciation benefits or the financial benefits of using renewable energy.

This interview was conducted by Roselin Dey, Editorial Team, India Carbon Outlook.

 

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Author: Roselin Dey