SolarSquare has raised $40 million in the largest venture round in India’s solar sector.
The Mumbai-based startup made money selling to corporate customers for five years before switching to residential solar in 2021. It has now scaled to power over 20,000 homes and 200 housing associations across India and is India’s largest operator of distributed solar assets.
“This is the opportunity of a lifetime,” Shreya Mishra, co-founder and CEO of SolarSquare, told TechCrunch in an interview. “Fast-growing industries are not just industries, they are places where profit and purpose align.”
Unlike other players in the industry, SolarSquare is much more attractive by offering full-stack services, including selling systems, installing them on consumer rooftops, and providing after-sales service, guaranteeing a return on solar investments and compensating customers if the system is not delivered. . The overall cost to purchase and install the system averages about $1,500.
“If we promise to provide 5,000 units of power from solar power but end up getting only 4,000 units, we will repay you for the remaining 1,000 units,” Mishra said. “This makes solar like a term deposit for customers because the return on investment is guaranteed.”
Interest in solar has surged in recent years, thanks to recent incentives provided by the government. The push is necessary because only about 1% of homes in India currently have solar systems, compared to Australia, where 35% of homes have solar systems, and Brazil, where more than 5% have solar systems.
“Two years ago, people only had textbook knowledge. In school, we learned that solar energy is a good thing,” Mishra said. “They didn’t know what it cost, they didn’t know about government subsidies, they didn’t know that the payback period was literally four or five years.”
India has set an ambitious goal of achieving 500 gigawatts of renewable energy capacity by 2030, and solar power is expected to contribute around 280 gigawatts to this goal. To accelerate solar adoption, the Modi government has introduced a $3 billion production-linked incentive scheme to promote domestic solar manufacturing, a 40% base tariff on solar modules to protect local industries, and building solar power facilities. We have introduced several incentives, including viability gap funding, for utilities to do this. Infrastructure in remote areas.
The government will also provide accelerated depreciation benefits, income tax exemptions for solar projects, and capital subsidies ranging from 20% to 70% for rooftop solar installations, while providing incentives to state utilities to ensure steady demand for solar power. Mandate renewable purchasing obligations for SolarSquare helps customers identify and take advantage of government subsidies, Mishra said.
“India is the first country in the world to implement net-metering, or electricity exchange, a consumer right to trade electricity freely with the grid, making the economy more viable,” she said.
Demand for solar is slowly expanding beyond major cities. “Unlike fast commerce or businesses that focus on the top 10-15 cities, solar power is really a national Bharat kind of business,” Mishra said. “People in tier 1, 2 and 3 cities and rural India will want solar power wherever their homes are.”
SolarSquare plans to expand from 20 to 50 cities with new funding, but is taking a cautious approach. “As entrepreneurs, we are not in the business of ‘moving fast and breaking things,’” she said. “There has to be that level of seriousness when you’re considering people’s lives and safety when you’re building a product as important as solar. ”
For smaller cities, the startup plans to work with local partners while maintaining quality control.
The timing works in SolarSquare’s favor. India made net metering a consumer right and shortened the permit processing process from months to days.
Lightspeed led the investment, a Series B funding round, with Lightrock joining existing investors Elevation Capital, Chris Sacca’s Lowercarbon and Nithin Kamath’s Rainmatter. The startup, which previously raised $19.5 million, will also invest in technology to build better systems for remotely monitoring and managing residential solar installations.
“We are excited to partner with Solar Square, which has quickly emerged as India’s most trusted residential solar brand,” Lightspeed partner Rahul Taneja said in a statement. “The clean energy transition has moved from ESG PowerPoint decks into consumers’ homes, and Solar Square is on the way to making it #hargharsolar.”
