Fulbright US-India Series: Tushar Devidayal | Founder and CEO of Devidayal Solar

Tushar Devidayal is the founder of Devidayal Solar, which provides innovative cooling solutions to the last mile. Mr. Devidayal was the former CEO of Devidayal Chemicals which was one of the top ten pesticide and chemical processing companies in India. In this episode, we will explore Mr. Devidayal's journey, and his motivations behind wanting to launch a solar company, after having such a successful career in the corporate space. Hope you enjoy my conversation with Mr. Devidayal!

Topics covered in this podcast: ​

[1:50] Mr. Devidayal provides background into a unique challenge that the company experienced
[3:58] Mr. Devidayal's background and what led him into the wonderful world of solar energy
[7:45] Mrs. Devidayal gives insight into what led her husband into social entrepreneurship
[9:26] The rural power situation in India - have power cuts drastically reduced?
[10:30] How has Devidayal Solar evolved over time from a product standpoint?
[12:45] What’s involved in Devidayal's flagship solar cooling product? What are the primary components?
[14:00] Mr. Mishra talks about Devidayal's distribution channels
[15:02] What’s the primary challenge in convincing rural customers?
[18:06] How the IFC Light Asia-India initiative help facilitate financing
[20:00] How has growing up in an entrepreneurial family impacted Mr. Devidayal's journey
[22:26] What drives Mr. Devidayal today as a social entrepreneur?


00:06 Karan Takhar
Hello everyone. This is Karan Takhar, and welcome to the Zenergy podcast. Over the past decade, India has done an impressive job of integrating renewable energy into its energy mix. For this Fullbright podcast series, I sought to investigate the enabling factors and potential of India's global leadership in renewable energy with the focus on solar this Fulbright series is broken down into Four Seasons. In this season, through conversations with ten leading social entrepreneurs and development experts, we will illustrate how renewable energy in India has taken off at the rural level. Not only will the series provide insight into their fascinating entrepreneurial journey but also how they've been able to overcome the financing, consumer awareness, and distribution challenges associated with rural solar energy deployment at a large scale. In this episode, I will be speaking with Tushar Devidayal of Devidayal Solar, which provides innovative cooling solutions to the last mile. Tushar was a former CEO of Devi Dayal chemicals, which ultimately was sold for billions of dollars in 2012. In this episode, we will explore it Tushar's journey and his motivations behind wanting to launch a solar company after having had such a successful career in the corporate space. Hope you enjoyed this conversation with Tushar Devidayal. So from my research, somebody told me to ask you about the time rats got stuck in the solar freezer as you were attempting to make it the flagship product. Can you please tell us about this?

02:03 Tushar Devidayal
Yeah, sure. I mean, customer for this solar refrigerator when we started off was rural small businesses, retailers who were selling milk and dairy products China and India, which is a milk-based sweet is very common, and people love it. But then we realized that I mean little mice and rats also love this equally. So we started here any consumer complaints that, oh, you know what, your fridge isn't working. You know, why don't you come in and check the solar panel and a battery in the refrigerator and when our sales engineer used to show up on the site, we realise that look, we opened it up, and we see all the wires chewed through by rats and my mice that happened not just once, but then 2-3 and four times and then Technology innovation team, if you want to call Us as we started working on making a rat proof and mice proof and looking on wire mesh, is on the bottom inside of a refrigerator which now standard offering that's great. Yeah, it's.

03:18 Karan Takhar
I feel like this is this is something that only can be figured out like once you actually implement a product. How can you think of something like that prior to actually speaking into?

03:31 Tushar Devidayal
Yeah, absolutely. So so, I think that's part of the fun of this, I mean, there's a lot of trials and tribulations, but I think the fun part is this kind of fringe innovation that happens once the products in the field and you realize that you need something and you need to improve on something, and it only makes a big difference.

03:55 Karan Takhar
It makes a lot of sense and for people listening. Can you tell us a little bit about your background, where you grew up, where you went to college, and your early hobbies /passions?

04:06 Tushar Devidayal
I'm a Bombay boy, I was born in Bombay, and I went to school here as well. Right after high school, I went to College in St. Paul, MN, in the US, and you know, I was a major in economics, got out of there, and wanted to be a banker. Went to New York City work in investment banking at Bear Stearns and Merrill Lynch, and, you know, I was, I was, I was, I was happy doing what I was until I realized that, you know, I needed to come back to India, have a look at how businesses were run here, and I joined my family business in 2001, it was a crop chemical business, and that led me to that government traveling all over India all over Africa and the Middle East and Southeast Asia because we were largely a manufacturer exporter. So I got a lot of experience In, in, in rural markets all over the world, and especially Agri input markets and agriculture and seasonality of economies. That business was quite successful, and I sold it to a Japanese multinational in 2011. I continued on as the India CEO for a few years that's when I had a bit of a midlife crisis stated that I needed to do something else. That was the year 2014. I want one of the things I really wanted to do with my life was get MBA, so I ended up applying to London Business School, and I spent the better part of two years getting that MBA degree.

05:41 Karan Takhar
Nice, and then, what led you to the wonderful world of solar energy, and when did you know you wanted to commit to this field?

05:49 Tushar Devidayal
While I was there in London at London Business School is when I realized that London Business School had a really great social enterprise incubation program, and there were a lot of social enterprises that sprung out of London Business School, including a lot of the solar off-grid energy companies that you see today, so just to give you an example, I think that Simba energy Dharma Life, M Kopa, some of the other names that you see are all run by London Business School along as their CEO's or their managing directors, so that was a good start for me to kind of get, get climatized to what a social enterprise was and in my mind before that there was an NGO and there was a company. There was a for-profit company. There was nothing in between, and I was very pleasantly surprised to find that, you know, that there was a social enterprise with, yeah, you couldn't be a for-profit or for the low-profit company with a social goal to create societal and environmental impact, and you would you know re-utilize any circus that was generated to put back into the company to do more of the good thing so this I know this concept is not new the concept was new from. It was, it was, and that's what I was pleasantly surprised by, and once I got that down, I was like I was. There was no turning back. I decided that that's exactly what I wanted to do solar and solar lanterns kind of came a little bit further along in that MBA when I was interacting with people. A lot of my classmates were from Nigeria and other parts of Africa, and we started exploring that together, and ultimately we went our separate ways, but that's what drove me into the off-grid solar energy business.

07:44 Karan Takhar
I also asked to Tushar's wife, Jen, who's kind enough to take some time out and ask her to take on how it all started and what led to sharp to start a business in solar. Let's see what she has to say the ball.

08:02 Tushar's Wife
Yeah, and he, he kind of got inspired, but that, you know, there are ways to help people and local rights of people while making money and kind of awkward, so there would be a good way to do that, and so he kind of started, this is actually kind of funny. He couldn't really tell me his idea. He just kind of like, yeah, like I want to kind of figure out solar a little bit, and I, you know, I take the kids to the USSR, and while I was there, he was ordering all these solar lanterns to the house over there and wanted me to bring back, and I come home, and then we just lanterns all over a balcony second, better than like, I guess, the crisis Is like owning a bunch of cars right north cool and uhm eventually he just kind of, you know, started, you know, realize like manufacturers like China and got into this business and it's funny looking back on that, you know, just like the how it started out.

00:09:17 Karan Takhar
Yeah, from that to now, freezer and company. Yeah, it seems like the power cuts have drastically reduced like pretty well across India. Do you find this to be the case?

09:32 Tushar Devidayal
Current is seasonal, So what happens now is that in the summertime, you'll have a lot more power cuts merely because so North India relies on hydro, so all the hydropower kind of like, you know, the reverse is kind of run dry, and all that so you have Iraq N India cannot facing a lot more power cuts in April and May. Uh, right until June when it starts raining again. It will be the same in Maharashtra. But overall, if you say the power situation has improved a lot in the last five years and where hasn't improved, I think there's, there's, there's a decent amount of rooftop solar that says come into place and that's also. That's also a function of what the government did with the rules about your schemes, so they gave us like some half million households with.

10:28 Karan Takhar
It's pretty impressive. Can you talk a little bit about so how has your business evolved over time, meaning from the time you founded it so today and especially from a product standpoint?

10:42 Tushar Devidayal
Right. So I think, look, we started off as a solar lamp light company, so we were we initially designed, developed, and started selling solar lanterns, solar home systems, and we quickly realized that as as as India was getting electrified, people, wanted more, they were going to larger systems, so this was out of the range of say what the lamps and lanterns could provide to people going with 300 Watt or 500 Watt on their rooftops, and they were charging large batteries and inverters out loud, and we realize that we need to, we need to be there they are waiting for the consumer on the next step of the energy level. So what we started doing is working on developing efficient appliances like BLDC fan and solar off-grid refrigerators. We were really early in this, so we came in, I think, before almost anyone in India with the solar or refrigerator, so the Model Train has basically moved over the last four and 1/2 five years from lighting to cooling.

11:56 Karan Takhar
So why is cooling important?

11:59 Tushar Devidayal
If we give a micro-entrepreneur cooling solution, they either get more time to negotiate a better price for their product, or they can store it and sell it in smaller lots. So we believe cooling very empowering and cool change very, very relevant. Telco Foundation had done a study that was published in March 2019. The sample size was not very big. It was 75 off-grid refrigerators and as was prominently featured over there, and they determined that the incremental monthly income from owning an off-grid refrigerator for productive use was in the range of ₹7000 to ₹10,000 a month that the data we have current.

12:45 Karan Takhar
Wow, So what? What's all involved in this product exactly? So it's a battery system, then? The actual refrigerator itself, and Then what? A solar-type system that helps generate the energy needed for the refrigerator to run? Or those are three primary components?

13:07 Tushar Devidayal
Right. So, so those are three primary components, and then we have a smart charge controller, which is kind of like the brains of the operation, so the battery goes plugs into the charge controller, the refrigerator plugs into the charge controller, and the solar panel plugs into the charge controller, and then the start controller kind of you know uses solar energy to either diverge to the battery charges and then the battery send the the the energy to the solar refrigerator to make sure that the compressor's running when it leads to so those are the essentially the three components of battery refrigerator in the finals and then we have a controller to run the whole thing.

13:55 Karan Takhar
And Mr. Mishra, the director of marketing, also known as the marketing guru of Devidayal Solar, showed me the product talked to me about its costs and how they reach customers. Here's what he had to say.

14:10 Mr. Mishra
Is it 100 this a little capacity?

14:15 Karan Takhar
And what is the cost of this?

14:18 Mr. Mishra
Do you consume? This is what we tell you.

14:22 Karan Takhar
And how do the consumers usually pay for this product? Do they pay upfront the 40,000, or do they usually get financing from the banks?

14:31 Mr. Mishra
Second from the computer.

14:35 Karan Takhar
Maybe what channels do you use to market to these rural customers?

14:47 Mr. Mishra
Doing well second, dealers and dealers In black.

15:02 Karan Takhar
What's the primary challenge in convincing customers? Is it the awareness? Is it the financing? Is it just like even getting to them, you don't know where they're located or what have you found to be the primary challenges? And also, what are some of the solutions that you've come up with to address these challenges?

15:22 Tushar Devidayal
Yeah, I think there's huge identified most of them. We start with consumer awareness. A lot of people don't even know what a solar refrigerator is, how it can change their life, how productive use appliance can increase their income so there's that to start with once you get to a consumer or a small business owner who wants this installed we come back to the upfront capital expense and financing which is a big, which is a big and I think the third one is maintenance and repair ability, so we will address all three parts, I think the first one on the consumer awareness side because we're lighting issue associated and we have a certified product when it comes to our refrigerator we're doing a big campaign that's coming up next In the month of April, May and June and that's going to be running in UP and in Rajasthan where our solar refrigerator is going to be mounted on what's called a pseudo despin, which is essentially a ban with solar panels on stopped and our solar refrigerator inside and we're going to be taking that to as many we'll towns and villages as we can to build consumer awareness and let people know what the return on investment is by for a small retailer or small business purchasing this for productive use, we've also tide up with One Financial. Who's willing to offer financing, at least in the state of Rajasthan, for our refrigerator? But we need to reach out to a lot more microfinance institutions so that we can cover at least what we perceive to be critical markets and, lastly, when it comes to maintenance and serviceability. We like these sell-in clusters because, you know, something that I think this interview is gonna go back to wraps eventually, you know, we get calls all the time from consumers who have installed our refrigerator saying that, hey, you know, we've got an error message on the charge controller, the fridge is not working and then eventually we find out that it's a wiring problem or perhaps, you know, it could be something that's easily solved on the phone or with the WhatsApp video, but I think that as we grow, service maintenance training will develop into a big bigger area of concern that we need to address right now before we scale up.

18:05 Karan Takhar
So with regards to the financing and you mentioned how you have gotten a Rajasthan microfinance institution to help in that area specifically, so can you talk a little bit about how that process happened in terms of like how did you get them to agree?

18:25 Tushar Devidayal
All right. So that was again the IFC lighting is for India team that was Anjali. You know, Anjali Garg and Ravi Kumar, they assisted with making that linkage which was critical because, again, you know, just like you have consumer awareness and you're educating consumers, you have to do the same level the same. The same discussion with finances they have to understand your product, they have to have confidence on the company, on you, and on the product. They have to see your certifications and your testing. They want to know what your warranty period is, so if your warranty period is 12 months, obviously, they won't give you a loan for 24 months. I think it was a very slow and painful process, but we so the financial we have that we're working with is called AU Bank AU Banks, a small commercial bank now in Rajasthan with headquarters in Jaipur, and yeah, so that linkage came out of our association with the IFC. Lighting is changing. The idea is eventually to package our product in such a way that we have microfinance institutions on board with us, so wherever we sell, we have a financing plan in place.

19:38 Karan Tkahr
Where they will essentially finance upfront cost, and then the customer will pay the financing institution in installments over time.

19:48 Tushar Devidayal
That's right. So the receivables would not be as the receivables would be the financial issue.

19:54 Karan Takhar
Probably the last, maybe the last of two, two questions. So I've also learned that you come from a family of entrepreneurs. Can you talk a little bit about how this has shaped your ambitions today?

20:11 Tushar Devidayal
Yeah, I think that so I think when I first got a job in banking in New York, I think I was in an anomaly in our family, so we've I come from a family around different hours, revolving business owners, my dad, his dad before him my mom family, we've all been entrepreneurs, small business owners, sound and large business owners and believed in creating value of providing employment, that kind of thing so Uhm, has it influenced me? Uh, yes. I kind of like the freedom it affords. I like being able to do, you know, still where I'm going. I basically, I think it comes down to the freedom that's the lifestyle of, and you know, I've had since started was working in a large corporate, then for my own family business, then running my own family business, and then when we sold it to Japanese multinational, I, you know, went back to becoming a paid professional for some time and then came back and so that I've had like a Start Stop, Start Stop and I and I realize that this is the way for us this Is a way for me for being entrepreneur.

21:39 Karan Takhar
What would you say is motivations are today versus actually how they were, maybe when you guys left New York and Came to Mumbai?

21:49 Tushar's Wife
Well, yeah, he really wants to help people, and he also wants to make a successful business, so both of those are really what drives them, and he wants to wants to show our kids, you know, you don't have to go and work for someone that you can start that something, and it takes courage to do that. It's a risk, But at the same time, these risks are worth it, and it takes a lot of hard work and effort at the court. But it can be.

22:22 Karan Takhar
Done, and what would you say drives you today?

22:26 Tushar Devidayal
What drives me, I thought, well, look like we have been wanting pretty excited about the business. I wake up thinking that, you know, today is gonna be a good day. Today is going to be the day. I mean, obviously, sales are important, but I get really excited about about about projects where like completing a project, doing something where after installation, you know, you look do you talk to consumer or small business, and they say look discharge, this is really working. You know, I need this much money for last month just selling stuff that was called out of your refrigerator, I think, I think it's just something like that. It's the feedback that we get from consumers, the impactful meeting. We try and document as much of it as possible. We've got a wall full of photos of, you know, happy consumers. I think that's that. That's what really drives us.

23:23 Karan Takhar
I hope you enjoyed that episode, and do check out the show notes. For more information on my guest, see you next time.

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