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Report | October 2012

Power backup systems industry to grow faster

With widening gap between demand and supply of power in the country, the need for power backup system has become essential for commercial and industrial setups, besides households. The recent power outage in the country also has given enough reason for keeping power backups ready for such situations. Taking in account these factors the power backup systems industry, manufacturing power generators, inverters and uninterrupted power supply (UPS) systems, could see a significant growth in coming years.

According to industry people, the Rs 10,000 crore industry expected to grow at the rate of 15-20 per cent year on year basis. Today, the country is not only suffering from gross inadequacy in captive power generation capacity but also sluggish growth in infrastructure. Exacerbating the problem is that Indian power sector has yet to see significant reforms, in order to bridge the demand supply gap. Adding to this, many cities in the country suffer from long hours of power cut during several days in a month. In states like Uttar Pradesh, Bihar, Haryana, Andhar Pradesh and Tamil Nadu ├╗people get power for just 8 to 10 hours in a day. Ironically, Maharashtra, which is the highest power generator in India, also faces power shortage and there is long hours of load shedding.

However, thanks to the recent power outage in the country, the demand for generator and inverter is increasing. Apart from the power crisis, other contributing factors for the growth in these sectors are robust economic growth, rise in household incomes, and the real-estate boom. Indeed, products like standby power generators, inverters, uninterrupted power supply (UPS) systems and storage batteries are finding an expanding market, especially in summer.

Market watch

While bigger organisations and residential complexes generally opt for generators, mostly diesel, smaller offices and households prefer inverters as they are they are noiseless and pollution-free. Increasing spending power of people in the country is also fuelling the growth of alternate power solutions.

The generator market is inculcating cutting-edge technology and the portable power market is on an upswing, making the market more lucrative and competitive. The market size for generators is expected to grow over Rs 3,000 crore this year. Competition is estimated to be higher among the manufacturers of smaller generator sets.

Maximum usage of small generators is in rural areas for agricultural purposes. The demand in the rural sector is mostly for smaller and cheap kerosene and diesel gensets, particularly for irrigation, with no particular preference for brands. For example, in Punjab most farmers opt for generators below 10 kw - permission is required from the State Electricity Board for installing sets with larger capacity.

Moreover, demand for inverters is mainly in cities and towns, however, now it is becoming popular in rural areas also. The present size of the inverter market in India is growing at a compound annual growth rate (CAGR) of 12- 14 per cent. According to a report by ASSOCHAM, the rise in the demand for inverters, their batteries and generators is expected to go up by 20 to 25 per cent, mainly in summer months. The prices of inverter batteries, particularly for brands like Exide and Amaron has gone up in the past few months. The demand of dry and eco-friendly batteries has also gone up compared to normal batteries.

A major share of the inverter market is currently being held by the unorganised sector and smaller local manufacturers offering cheaper products. The entry of cheap Chinese products is further fuelling competition.

Big players

Major players in the portable power market are setting the standards in terms of technology and quality for others to follow. According to FICCI, AC generators manufactured in India are on a par with international products and consistently deliver high quality power with high performance. Domestic manufacturers are capable of manufacturing AC generators right from 0.5 kva to 25,000 kva and above with specified voltage rating.

Birla Power Solutions Ltd, formerly Birla Yamaha Ltd, offers a wide range of 'Ecogen' generators and inverters with features like eco-friendly low emission; hi-tech alloyed components facilitating low maintenance; special exhaust protection system; twin fan systems for effective cooling; and powerful technology for quick load responsiveness. Honda Siel Power Products (HSPP), which brought in India's first LPG-based generator, also lays strong emphasis on R&D and in-house technical innovation. The super silent key start generator, LPG generators and other technological innovations are examples of the company's pursuit for technological excellence. With the focus on environmental and health issues, genset manufacturers are increasingly conforming to the most stringent Phase II Noise & Emission Norms, as laid down by the Central Pollution Control Board (CPCB), Government of India.

The inverter industry is also witnessing a lot of technological improvements. Pure sine wave inverters have considerable potential in the household sector. Earlier inverters were being used only for specific appliances like PCs but now with the new technology, a 1,000 va inverter can power all household appliances. With microcontroller technology and DSP technology used in fabrication of components, present-day inverters cost less but have higher capacity.

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