Rahul Munjal: Renewable energy crusader

Though cut from the same cloth, the eldest in the next generation of the Munjal family has taken a divergent route from his predecessors. A staunch advocate of reversing the ill effects of climate change, Rahul Munjal is quickly gaining prominence in the green economy and already has India′s largest rooftop solar installation and first certified commercial green bond to his name. Inspired by his father who founded what was to become world′s largest two wheeler maker--Hero MotoCorp, the junior Munjal is hoping his venture would be as successful in its own way. On October 23, 2014, Pawan Munjal, the chairman and CEO of Hero MotoCorp world's largest two wheeler manufacturer was busy showcasing the company's new factory in Neemrana to a select group of media persons. The facility with a capacity to make 7.5 lakh units every year was Hero's fourth in the country and one of the most modern and sophisticated two wheeler manufacturing facilities. Due to be inaugurated the following day, Munjal was at pains to explain how this factory was unlike any other. Before the journalists could be taken to the shop floor-the heart of any automotive facility where the assembly of vehicles takes place-Munjal escorted all of them to the roof of the building. Unlike any other factory in India, the roof of the Neemrana facility is almost entirely covered by solar panels. The factory building is oriented diagonally based on the sun path so that the 1.5 megawatt solar photovoltaic modules get maximum exposure to the sun. It is one of the biggest solar rooftop installations in the country with a capacity to produce 5.5 Megawatt of direct current electricity to the air conditioning system. To get this job done, Munjal did not have to look very far. The entire installation was done by his nephew Rahul Munjal-son of the late Raman Munjal, the eldest son of patriarch Brij Mohan Lal Munjal. His father had founded the company in 1981 in the first place. For somebody who belongs to what is referred as the first family of the domestic automobile industry, Rahul Munjal's interest in the renewable energy is led by his concern of the ill effects of climate change on the environment at large. In a span of just 4 years, his company--Hero Future Energies, is already among the top 10 independent power producers in the country. “I have always been fond of nature and respect it deeply. But the more I read and the more I know about climate change- it disturbs me greatly,” he says. “I consider myself extremely fortunate to be in a position where I can follow my passion and create a viable business and have a positive impact on our planet. As the Indian economy continues its growth trajectory, we are poised to provide clean power to industries, businesses, educational institutes, non-profits and governmental organizations at competitive rates. We will assist our clientele in fulfilling their Renewable Purchase Obligations (RPOs) by reducing their dependence on power generated by fossil fuels like coal, oil and natural gas.” Spurred by Modi's government's robust thrust on renewable energy with a target of achieving 175 gigawatt power by 2022-100 GW of solar, 60 GW wind and 15 GW biomass, Munjal who has a degree in Economics from University of Rochester, has been doubling his own capacity every year. Its operating capacity today is at 360 Megawatt with an additional 620 megawatt under construction in fiscal 2017. By the turn of this decade, he hopes his capacity will rise over 8 fold to nearly 3 gigawatt. “As a group we will be investing progressively in Wind, Solar and Hydro sectors over the next few years,” he says. “Renewable energy is serious business and a gradual transformation to green energy is non-negotiable in order to avert an environmental catastrophe. India's leadership in establishing the International Solar Alliance (ISA) which was launched at the UN Climate Change Conference in Paris (COP 21), is a part of the government's big bet on solar. The government's commitment to the growth of renewable and its efforts have fructified, by attracting an 80% rise in solar power financing that now stands at $5.6 billion. India's target of 175 GW of renewable energy generation by 2022, got off to a good start with nearly 12 GW likely to be installed by 2017. At the beginning of this year, the government asserted sanctioning of 30% capital subsidy for rooftop solar installations to residential, government, social and institutional segments, which is expected to support total rooftop capacity of 4,200 MW till this budget is exhausted.” The rapid expansion at Hero Future Energies would suggest everything has been a smooth sailing for the young entrepreneur. But his first tryst in a new venture was at best a moderate success. Prior to turning his focus towards the energy space, Munjal tried his hand at a unified retail payment venture-EasyBill way back in 2003. Targeted at consumers in the smaller towns of the country who did not enjoy the technology benefits of their counterparts in big cities, EasyBill offered flexibility for payments like utility bills, mobile phone recharges, air, railway, bus ticket bookings or even money transfer. The relatively quick adoption of mobile wallets like Paytm however, somewhat stunted EasyBill's prospects and it could not fulfill its initial promise. Munjal has not given up on the venture yet and will launch his own mobile services soon but it will nevertheless, be a belated entry. “Through Easy Bill(my first venture) I had delivered the benefits of technology to my countrymen. It pioneered in providing a retail channel to Indian consumers for payments at a time when these transactions were extremely inconvenient and time consuming. This mode and channel of payment was unheard of in India and educating people and developing the market for payments through retail outlets has been a very challenging but satisfying journey,” he says. “We developed the technology backbone and strong relationships with utilities and other billers for providing these services. With over 20,000 payment outlets all over India we are still leaders as far as cash and cheque payment is concerned. Easy Bill is not that impacted by mobile payments as our target customers (especially in Tier 2 and Tier 3 cities) still prefer cash payment over mobile/internet payments all though we are in the process of launching our mobile services soon.” As an early mover in the wind and solar energy sector, Munjal is in a more secure territory with HFE. At present, renewable energy accounts for around 15 percent of India's total installed power generation capacity of 288 GW. Developed countries like Germany have a far higher share of 33 per cent or more. The gap provides ample scope for capacity addition and makes an attractive destination for investment. In May earlier this year, Munjal himself raised Rs 300 crore for expanding its wind energy capacity by issuing the country's first certified climate bond. A recent Renewable Energy Country Attractiveness Index released by consultancy firm EY put India in the third position behind only US and China. His stints in manufacturing, sales and marketing roles with Honda Motorcycles in US and Hindustan Unilever has made Munjal into somebody who thrives on program implementation and strategic planning. These qualities are coming in handy at HFE where everything is being built from scratch. His association with Hero Group has also given him experience on how to tackle the tenuous and at times uncertain regulatory landscape in India. “These are early days yet for the renewable energy sector, but industry's confidence to achieve the targets that have been laid out has grown stronger with the expectation of necessary action plans by government agencies,” he adds. “The push for decentralized renewable solutions like mini grid, in additional to solar, is expected to generate 500 MW of power to supply energy to the farthest corner. However, the ultimate success of India's big bet on solar will require focus on research, affordable project financing, and viable solar projects that will pass on the benefit to end consumers. Both solar and wind integration into the grid faces resistance from grid operators. However as our economy grows, grid size increases and new technologies related to scheduling and forecasting are in place, integration issues are likely to be resolved. Initiatives by the current ministry, like green corridor and emphasizing on improving the overall infrastructure is likely to smoothen the last tumbling block.” Should Munjal achieve what he has set out to do, he would at least partly mitigate the contribution of his father's company to climate change by the millions of two wheelers that hit the roads every year. Even that, is no small matter.