SOLAR

By
19PGDM00B005 Aravinthraajan B.R.
19PGDM00B017 Pratik P Dhake
19PGDM00B021 Swarojit Sharma

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TABLE OF CONTENTS

INTRODUCTION

EXTERNAL ENVIRONMENTAL FACTORS AFFECTING THE COMPANY

(MACRO FACTOR)

EXTERNAL ENVIRONMENTAL FACTORS AFFECTING THE COMPANY

(MICRO FACTORS)

PORTER’S 5 FORCES MODEL

SWOT ANALYSIS

MARKETING MIX

SEGEMENTATION FOR ACME

SUGGESTED STRATEGY

BIBLIOGRAPHY

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INTRODUTION

The solar industry is destined to boom in India, however it will face many challenges to be at its
zenith. ACME Solar is one of the leading players in India’s Solar Industry. This report aims to
provide information on various aspects such as micro environmental factors and macro
environmental factors which will directly or indirectly affect the company in its journey to become
the top player in India’s Solar industry. Among other things it also provides SWOT analysis of the
company and provides possible suggestion to achieve a strong hold in this industry.

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External environmental factors affecting the company (Macro
Environmental)

Political
Govt. of India has initiated various schemes to facilitate Solar Industry which is an opportunity
for ACME to boost its presence.
Ministry of New and Renewable Energy pays 30% of the benchmark Installation cost for rooftop
PV cells.70% for installations in hill stations.
For profit-making enterprises installing Rooftop Solar, 40% can be claimed as depreciation in the
first year.
Loan facilities are also provided for installing rooftop PV systems up to 10 lakhs from nationalized
banks.
RECs (Renewable Energy Certificates): Traditional Certificates providing financial incentives for
every green energy unit produced.
To safeguard Indian manufacturers 25% safeguard duty is imposed for two years period from
August 2018 on imports from China and Malaysia.
Economic
Indian economy is expected to grow at a rate of 5%-7% per annum. Energy demand is also
projected to increase accordingly as more and more emphasis lies on making the world more green
and free from fossil fuels govts will push for cleaner fuels ,solar energy being 68.3% of the total
renewable energy constituent is destined to grow so ACME Solar will have an opportunity.
Social
The general awareness among masses for use of renewable in India is in the positives. The attitudes
of common masses towards Renewable power are changing as technological enhancements deem
it to be cheaper. Educated citizens of the country are well aware of the ill effects of climate change
and global warming. ACME Solar can reach out to domestic as well as commercial vendors to
pursue communities to use PV cells in street lighting or small phone charging stations to help
reduce carbon emissions.
Technological
Technological innovations are constantly required for the survival of any industry. In the
renewable sector especially in solar PV cells, the achievable efficiency is very low; this low
efficiency along with high investment costs, in turn, makes a significant impact on the unit price
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of energy per kWh. Technological barriers are also prominent in the sector, uncertain availability
of renewable which is dependent upon seasons, time of the day and location of the installations.
ACME solar for innovations and testing has founded Solar Lab to tests new product which makes
it.
Environment
In the environmental front there is an increasing emphasis on sustainability of business. Now the
trend is to make businesses which are unique and has long term value and future sustainability.
Climate change and global warming are becoming increasingly prominent as various reports are
endorsing the same.
This is an opportunity for ACME.

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Internal environmental factors affecting the company (Micro
environmental)

The company is now in the developmental stage, as seem after going through annual reports the
company is now making profits so the internal environment of the company seems to be positive.
Competitors As well evident ACME is not having a large market share considering its Vision is to
be in the Top 3 utilities in India Competitors like Renew Power, Delta etc. are leading from the
front in the sector.
ACME Solar is mainly dependent on Chinese Suppliers for their components but is still not at risk
as they can switch to domestic suppliers if govt of India imposes more tax on Chinese goods.
The ACME solar has efficient number of retailers and distributors as evident from the fact they
are successfully completing projects in all the states throughout India.

Porters 5 Forces Model

Threats of new entry

The threat of new entry for ACME Solar is medium first of all solar fields require large amount
of investments, which deems threat of new entrant as low, but govt. and regulatory authorities are
trying to facilitate renewable energy so this makes it probable that more new firms will likely
penetrate the market. So overall threat of new entry is medium to high.
Supplier Power
As Acme solar is mainly dependent on Chinese Suppliers for its parts Govt. of India s imposition
of taxes on Chinese Goods can be a negative for the company but accordingly switching costs for
local suppliers is low so ACME can go for domestic suppliers.
Buyers Power
ACME solar mainly gives services to govt organizations as its annual reports claims 62% of PPAs
are Central or State Govt Companies. The client i.e. govt has ample of options as the govt goes for
auctions so ACME solar should carry forward with competitive bidding to win as much developer
contract as possible.

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Substitute Products
As energy is undifferentiated so does the PV cells owning to the regulator specification. The
substitute product in this case is energy products from fossil fuels such as coal. As govt of India is
pushing for renewable energy combined with educated masses advocating for energy from clean
sources. ACME Solar’s threat of substitution is less.
Rivalry
Lack of diversity in product offerings can be a threat as its competitors are offering more variety
of sources for example., Renew power is venturing in Wind and Solar both. ACME Solar can bring
new product line on other renewable verticals.
The cost of exiting the business is also very high as specified equipment are being used for this
business. So exiting cost is high.

Threat of New Entry.

*High Capital Investments
*Government Policy
faciltating the solar
industry.

Rivalry Suppliers Power

*Lack of Diversity switching Costs
*Cost s of exiting the *Industry importance
market is still high *Forward Integration

Substitute Products
*As energy is Buyers Power
undifferentiated *Concentration of
mainly the users
substitutes can be * Undifferentiated
electricity produced products
from fossil fuels.

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SWOT ANALYSIS

The company ACME Solar operates in the field of solar. The solar industry has lot
of challenges as well as opportunities. The SWOT analysis is as below

Strengths

• The Total portfolio of the company is 5500 MWp out of which 2300+ MWp is operational
and around 500 MWp plus is under construction. This makes them a strong player in the
solar industry. It is one of the fastest growing company in this industry in India.
• It has widespread presence across different locations in India. It has presence in 13 states
across India
• Since solar industry is largely depends on the sunlight, India has an added advantage as
compared to the European nations. This potential needs to be tapped. India has
approximately 2617.55 hours of average sunshine a year

Weakness

• The initial capital cost for installing solar panels is very high. It takes huge capital
investment to install solar plants, according to world bank an investment of about 5 crore
is needed to produce 1 megawatt of power.
• The solar plant cannot produce electricity at night.
• When compared with conventional form electricity producing plants, the efficiency of solar
plants is quite low. Efficiency of solar systems can reach up to 20% whereas the efficiency
of thermal power plants is around 35%.

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Opportunities

• The target of National Solar Mission has been up-scaled to 100 GW from 20 GW of
Government of India has set a target of adding grid connected solar power by 2022.
• As per the Paris Accord on Climate Change, India has pledged to increase its capacity of
renewable power to 450 GW 2022. This will provide immense opportunity for the company
to expand its operations.
• 73.4 GW of renewable energy capacity was installed in 2018 (till October). Hence there is
high possibility of increasing its share of contribution in the existing scenario for ACME
Solar.

Threats

• The Government of India has allowed 100 % FDI in solar industry, hence there is a threat
from foreign players who will try to get established in India.
• As most of the components used in Solar plants including the solar film is manufactured in
China. Dependence on China for spare parts is threat to this industry.
• As the efficiency is less for solar, there seems to be a question on the long term viability of
solar power taking into consideration the cost of maintenance too.
• Also as the peak of the solar power is produced during off peak load hours there is minimal
chance of selling the power during peak load hours.

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Marketing mix

The four Ps of marketing are Product, Price, Place and Promotion.

The marketing mix for ACME solar is as discussed below

1. Product : The major business of ACME Solar is that they develop, build, own, operate and
maintain utility scale grid connected solar power projects. They sell electricity from their
solar power plant directly to the grid.
2. Price : They generate revenue through the sale of electricity to central and state government
entities and government-backed corporations. The price is decided in the contract and is
mutually agreed between the two entities.
3. Place : It has presence in 13 States across India. The states in which they are present are
Uttarakhand, Gujarat, Chhattisgarh, Telangana, Karnataka, Punjab, Bihar, Uttar
Pradesh, Odisha, Madhya Pradesh, Rajasthan and Andhra Pradesh. It has head quarter
in Gurugram, Haryana, India.
4. Promotion : The company has no C.S.R activities as the report is being made. The company
can have C.S.R activities to promote itself in the media. Alternatively, it can also give
advertisements in magazines related to solar industry and in newspapers about the growth
it has achieved since its inception. The company has participated events like renewable
energy expo as a part of its promotional activities.

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Segmentation For ACME
Their main target segment are the state and national grids where they sell power under regulations
laid down by the CERC & SERC. Per say since the solar cell are standard products, the scope of
segmentation is very less. But on a brief, we can address the geographical segmentation. They are
present across 53 location in 13 states. The geographical distribution could be given by 355 MW-
Madhya Pradesh, 30 MW- Odisha, 109 MW- Punjab, 27 MW- Bihar, 396 MW- Andhra Pradesh,
15 MW- Gujarat, 3000 MW- Rajasthan, 337 MW-Maharashtra, 487MW -Karnataka & 637 MW-
Telangana amounting to a total of 5.5+ GW in India.

But on a broader perspective PVs can be segmented by psychographic and behavioral too. With
the increased promotion for green energy and sustainability due to global warming. Renewable
energy has become a beacon of hope moving forward. In that regards Solar energy being one of
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the feasible ways of conversion is something people are sensitive about. Hence people under this
category form a psychographic segmentation. Similarly behavioural segmentation can be done by
accessing benefits that is in the case of ACME is quality of the product & service post sale of PVs.
In terms of User status, the user is a first-time user and the usage rate is heavy as solar needs to be
functional throughout the year. Loyalty could be split loyalist or switchers from different brands.
Readiness stage of the customers is informed and interested due to obligations to comply towards
the green commitment.

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Suggested Strategy

The main objective of adapting a strategy is getting a competitive advantage. Based on the SWOT
for internal Analysis weakness such as High cost of Installation, the non-existential scope for
production of electricity at Night and low efficiency when compared with Conventional power
plants were identified. PESTEL for External Analysis revealed the political, economic, social and
technological implications favoured the solar industry at this point. But there were several legal
issues in the form of Consumer protection, legal issues in land acquisition. With this equation in
hand, the company can think about the following strategy moving forward:
1. Being more aggressive by removing treats from smaller companies. There are about 500 +
Companies in India alone that deal with solar. In that 3/4 are foreign player more majorly
the Chinese. This has resulted in the drop of PV module and its related components cost
drastically. Event there is a high level of dilution in the market as a result of this. One of
the major intentions for ACME moving forward should be out of box marketing and
improving their technology to recapture the distributed market thus eliminating the small
players in the process.

2. Considering the marketing climate to be favorable for clean energy they should tie up with
EV manufactures for charging stations as they have wide presence over 12 states in India.
This again revolves around the fact that EV’s only make sense if the point of charging is
from a renewable source.
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 3. They can invest in R & D as maintenance in Solar industry is a challenge till date.
Maintenance is directly linked with the life of solar panel. Improper maintenance has
resulted in the drop of the solar panel to less than 5 years. This puts a serious? in terms of
economic viability of the future solar projects.

These are few strategies ACME should adapt immediately to improve from their difficult
situation.

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Bibliography

• www.acmesolar.in
• www.makeinindia.com
• www.businesstoday.in
• cleantechnica.com
• www.currentresults.com
• www.bizfluent.com
• www.sebi.org
• www.zuaracorp.com
• www.companyinfo.nic.in

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