India is the fourth largest electricity producer in the world. The country has witnessed a paradigm change in the energy sector with supportive policy interventions as well as sector reforms. Despite the phenomenal growth in generation capacity over the past years, India is still struggling with a power deficit situation. And this has created a mammoth demand for power backup systems.
There are over 15.5 million households below poverty line (BPL) and 9,500 villages are still devoid of electricity. The eastern states of India, such as Odisha, Jharkhand and West Bengal, are rich in coal reserves but are reeling under acute power deficiency. As we all know that uninterrupted power supply is one of the prerequisites for any developing economy like India to prosper.
And this brings us to the power backup market in India which is expected to grow to Rs 504.66 billion by 2023, expanding at a compound annual growth rate (CAGR) of 11.28 per cent during the period of 2018–2023.
The Indian market is characterised by the dominant presence of the unorganised sector despite the fact that there’s hardly much difference between the price points of products from the organised and unorganised sectors. This is due to the fact that customers are becoming increasingly conscious about what they are buying, the quality, reliability and the impact of the product on its immediate surroundings.
In spite of introducing various government policies to become an electricity-surplus nation, India has failed to meet this target, and its peak power deficits continue to remain at 0.8 per cent (the overall power deficit remained at 0.6 per cent) in 2018-19. Hence, the installation of back-up power systems such as inverters and UPS systems has become a necessity. As a result this industry is growing rapidly, both in terms of size and demand.
At present, there is an immense demand for inverters and UPS systems in various sectors across India. The primary driver is the IT sector, followed by IT enabled services and industries, including telecom, banking, financial services and insurance (BFSI), and manufacturing.
Low level of electrification in semi-urban and rural areas has also led to the rising demand for power inverters, which are being used as an alternate power source during frequent power cuts and emergencies. Besides, the heavy use of electronic gadgets and appliances such as mobile phones, laptops, smart TVs, air conditioners, etc, has led to the dependence on additional power systems.
Various benefits of inverters and UPS systems
The UPS and Inverter market in India has experienced a significant growth in recent years on account of mounting demand fuelled by the gap in the demand and supply of electricity. According to a research report, Indian inverter market is projected to grow exponentially at a considerable CAGR of 9.4 per cent by FY’2019. As the disposal income rises of households, the sales of electrical equipment like ACs, refrigerators, television sets and microwave is expected to increase significantly and inadequate power supply will drive consumers to opt for inverters.
According to the ‘India UPS Market Forecast & Opportunities, 2018’ report, the Indian UPS market revenue was projected to double by the end of 2018, growing at the CAGR of around 12 per cent during 2013-18. The regional demand for UPS systems is being primarily driven by the level of scarcity in a particular area, for instance, J&K has the highest scarcity of power followed by Bihar and Karnataka and thus generating a high demand for UPS systems.
The Indian UPS market is extensively dependent on a low range (up to 25 KVA), accounting for more than half of the total UPS market. However, this trend is set to change due to rising applications of UPS and inverter systems in the industrial sector.
Myriad factors that are driving this market growth include an understanding of the need for backup power and the cost of not protecting power sources when power outages do occur, the unstable state of the national power grid, the increasing likelihood of power cuts, and the convergence of voice and data networks and increased reliance on digital networks, phone systems and business equipment.
For example, amidst the increasing pollution level in Delhi – NCR, the authorities have banned the use of diesel generator; the city has been forced to explore the alternative power sources. Few of us know that the inverters today are equipped with state-of-the-art technology and capable of handling high capacity situations.
Hence, the inverters and UPS are capable of filling up the gap and are the answer to city’s ever-growing environmental pollution. The inverters and UPS are safer, cleaner and a more viable option. On the other hand, a generator is expensive, both in the terms of operation and maintenance. Even the fuel used in generators is costly and extra caution is required to store it. Operating a generator is cumbersome and if a person does not use it properly, it can be dangerous. A generator in operation releases harmful fumes (which are basically NOX gas) which are injurious to human health as well as for the environment.
Although most of the UPS and power backup systems are used in the information technology (IT) and telecommunication industries to protect data, many industrial processes are also microprocessor and PC-based and hence susceptible and sensitive to power fluctuations.
The demand in the Indian inverter/UPS market has shot up due to constant power outages and a strong push from the government to accelerate the National Solar Mission. The usage of UPS systems should increase when solar inverters become more reliable for back-up power. Solar energy is expected to be the primary factor driving the increase in demand for UPS systems/inverters.
In future, the key focus areas will be critical industrial applications in refineries, petrochemicals, power generation, steel and metals, process industries as well as data processing applications. Solar back-up systems will drive solar energy usage at large. And installation of back-up power systems in dams and plants would also require exhaustive set-ups.
In the days to come, the efficiency of UPS systems will increase, sizes will reduce, costs will come down, and the devices will become more user friendly so that people can connect to and control their power back-up systems from their residence, mobiles, or in any other means. Solar UPS systems will work on both AC (grid) as well as DC (solar) power. The developments, at present, in the solar power domain are currently a bit slack because of the huge involvement of the government. However, the ‘Make in India’ initiative of the government is expected to boost industrialisation as well to start-ups in the SME sector, offering vast opportunities in the power back-up sector.
Talking of UPS and inverters it should be note that an important emerging technology is net metering and its integration with sine wave inverters/UPS systems coupled with communication and software technologies in the smart-grid re-integration domain. This can be done by developing and setting up rooftop solar energy generators for residential, commercial and also various industrial applications, of off-grid, on-grid and hybrid types as well as storage systems that will depend on the availability of cheap mix of energy resources. It is needless to say that technological developments are happening rapidly on the energy efficiency side as energy conservation is the burning issue of the day.
All said and done, it can be safely said that the future trend of the UPS and inverter market is secure and bright. As long as there is a gap between demand and supply and the infrastructure remains incapable of keeping the voltage consistent the power back-up systems will continue thrive.
Article by Arijit Nag
Arijit Nag is a freelance journalist who writes on various aspects of the economy and current affairs.
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