Energy Efficiency – an Attractive Business Opportunity

Solar PV power plants, even with attractive feed in tariffs (sometimes as high as 40 cents per kWh) take 7 years to break even. Wind energy takes 6. Biomass power (depending on the region of the world you are operating in) could take about 5-6 years. But do you know that there exists a clean technology that has a breakeven period of less than 2 years? Yes, and it is energy efficiency.

I was especially glad to read the following perspective on energy efficiency from the EAI Blog "You would heard of the story of Levi Strauss. When thousands of folks were running with their pickaxes and spades to dig for gold during the California Gold Rush (and only a few actually found any gold), Levi Strauss set up a business that provided thick canvas cloth that was required for the miners’ tents and their clothing. That is, whether or not a miner hit gold, Levi Strauss always hit business with that miner.

I think these are the types of support/concentric opportunities that small businesses that wish to profit from the renewable energy movement in India should be looking at. When every large business is running to set up solar and wind power plants (going by the simple logic that the market for energy in India will be for all practical purpose limitless for the foreseeable future), small businesses ought to realize that the power plant business is essentially a capital investment business with (almost) fixed returns, thus making them most attractive to businesses that have excellent access to cheap capital. Not for businesses that wish to innovate. On the other hand, concentric businesses such as energy management and energy efficiency might have relatively smaller markets (though not small in an absolute sense), but will be far more attractive and well-aligned with the nimble and creative DNA of small businesses."

I tend to agree with the above post. I think there are many more opportunities in cleantech than just power production. And many of these non-power opportunities tend to be more exciting with excellent upsides for those entrepreneurs who are willing to think fast and think out of the box.