Clean Max Enviro Energy Solutions the country’s largest developer of commercial and industrial rooftop solar projects, has announced an ambitious plan to double its capacity over the next three fiscal years with a significant investment of Rs 12,000 crore. This expansion is driven by a surge in demand from corporate clients seeking cost-effective renewable energy solutions.
Managing Director Kuldeep Jain revealed that the company aims to add 700-800 megawatts (MW) annually, boosting its operational capacity to over four gigawatts (GW) by the end of the three-year period. Clean Max currently operates 2 GW and successfully added 500 MW in the fiscal year ending March 2024.
To achieve this ambitious target, Clean Max has earmarked Rs 12,000 crore in capital expenditure, with Rs 4,000 crore to be spent each year, including the equity component. In June 2023, the company secured a substantial equity investment of $360 million (approximately Rs 2,952 crore) from Brookfield Asset Management, bolstering its financial capabilities.
Jain emphasized the growing demand for renewable energy, particularly from group captive and open access sources, noting that renewable energy is at least 35% cheaper compared to grid-connected power. “We’re hopeful of capitalizing on strong opportunities in the segment, as we focus on corporates and the commercial and industrial segment that provides higher margins,” he said.
Highlighting the company’s financial performance, Jain stated, “Our return on investments on projects is significantly higher at 15% compared with an industry average of 10-11%.” Clean Max boasts a robust client base of 400 corporate customers, with 75% being repeat clients. Additionally, around 85% of the company’s long-term electricity contracts are with ‘AA-‘, ‘AAA-‘ rated companies or multinationals, ensuring reliability and stability in their operations.
The average deal size for a group captive project, where customers own a 26% stake, stands at 20 MW, while the average size per power purchase agreement is 7-8 MW. Jain also pointed out that Clean Max’s timely completion of projects has been a significant advantage. “If someone delays a project by six months, the 13-year net present value of a 5% lower price is wiped out as other desperate sellers are ready with discounted prices,” he explained.
With this strategic investment and expansion plan, Clean Max is poised to reinforce its leadership in the renewable energy sector, supporting India’s transition to sustainable energy and capitalizing on the lucrative opportunities presented by the corporate and industrial segments.
