Decoding The Cleantech Opportunity In India


The government’s response to today's energy crisis asks for $2 Tn in investments in clean energy by 2030. India's market size, comprising batteries, wind and solar PVs, could be worth $41 Bn by 2040

India is at the cusp of transforming cleantech and setting benchmarks that can be followed by global players

Indian VCs and startups are rightly positioned to generate sustainable profit combined with the right impact on society and the economy

Cleantech could be worth more than oil by 2030. The government’s response to today’s energy crisis demands for $2 Tn in investments in clean energy by 2030. India’s market size, comprising batteries, wind and solar PVs, could be worth $41 Bn by 2040. One might coin it ‘the big switch’ of the century from being an oil and gas-pumping planet to cleaner energy solutions. 

So theoretically, everyone agrees that cleantech is important and urgent. However, does it meet the VC ‘profitability requirement’, and will the investments create the right ‘Impact’ on UN SDG goals? 

What Is Cleantech?

Despite much talk, there is no single, widely accepted definition of cleantech in the market and what it encompasses that can do justice to the actual market size projections. To say the least, before its popularisation as a technology category, cleantech typically referred to dry cleaning or cleaning supplies equipment. Yes, really! 

Many media narratives emphasise too much on ‘clean energy’ but exclude resource, water and waste management, which makes up a considerable chunk of cleantech. 

Why Are Indian VCs Cautious? Is It Western ‘Cleantech Mistakes’ Hangover? 

8X Ventures conducted research to consolidate the prime mistakes made by different stakeholders in the west and what India can learn from them: 

Too Much Focus On Too Few Technologies 

Startups in the west focused too much on renewable energy solutions from 2000-2015, with a significant focus on solar and wind power. 

Since India has diverse demography and geography, cleantech shall be diversely built to address those local problems. Startups need to explore opportunities across all areas of cleantech. 

This includes areas such as green materials, low-carbon construction, sustainable automation and alternative mobility, precision farming and hydroponics, carbon capture and sequestration, advanced nuclear power, geothermal energy, and much more. 

Investors Created An Overhyped Narrative Without Holistic, Global Projections

In 2007, legendary venture capitalist, John Doerr gave a talk describing climate change as ‘the largest economic opportunity of the 21st century, and also a moral imperative’. It marked the beginning of the formation of the bang. 

This narrative allured federal subsidies and VC investments in clean energy, created artificial market growth, and reduced investor risk aversion. This overhyped narrative for cleantech and imitation behaviour among VCs created over-optimistic expectations about the TAM and the future large-scale adoption of clean technologies. One widely accepted incomplete definition and a prevalent misguiding narrative resulted in the cleantech bubble bust of 2008. 

India needs more refined standard metrics, and practices need to be set for the stakeholders (including LPs) that could give them a realistic analysis of ‘financial returns’ and ‘impact made’ by the fund in coherence and not just as two independent parameters. 

No Timely Policy Support To help Cleantech Thrive & Protect The Market

The success of cleantech hinges on four interdependent critical success factors: an enabling technology, a careful market adoption strategy, an innovative business model, and a favourable government policy. 

The policy support from the government includes not just supporting the industry transformation but also protecting it from foreign markets. The lack of a solar panel import policy from China killed most of the US solar-related startups. 

India is the world’s fourth biggest emitter of CO2, and with its net zero pledge at COP26, India needs to mobilise massive funds more structurally to achieve that target. 

Traditionally, in cleantech, most investments are made in companies using conventional business models to fit new technologies into existing systems. The right policy change can help expedite this much-needed behavioural shift to achieve the massive CO2 targets. 

How Can Indian Cleantech Startups Generate A Profitable Impact? 

Indian startups have found their niche and are creating success stories that will work as case studies for many more startups to come. 

Create 10X Better Solutions; Generating A Pull From The Market 

In cleantech solutions, there is a strong pull from the market. Once adopted, it is hard to go back. For example, an IITM-based startup, XYMA Analytics, addresses issues with conventional process sensors employed in high temperature-based manufacturing and process industries with its novel ultrasonic waveguide-based sensor technology. 

On the other hand, traditional sensors have limited sensing capabilities, and a sensor failure often leads to forced shutdown/unplanned downtime, lower process efficiency, and a shorter lifetime of the components. 

Transform The Entire Industry & Create Opportunities For All 

According to Safai Karmachari Andolan (SKA), a non-profit working to eliminate the barbaric practice of manual scavenging in India, there are 7.7 Lakh manual scavengers in the country. This is a deep socio-legal problem to be solved on a massive scale. Multiple tech startups can coexist and solve it. 

Chennai-based Solinas Integrity is one such startup that is on its way to breaking the age-old practice of manual scavenging with its HomoSEP Robot that helps humans clean septic tanks without entering the hazardous environment. The startup has reskilled over 1,000 people and has the potential to reskill over 1 Lakh people in the next three years.  

Use technology as the moat, not just the marketing budget 

It might be startling, but yes, every second patent granted in India since 2016 relates to green tech. Winners? Most were linked to waste and alternative energy solutions. That is 61,186 patents out of 91,502. 

In other words, it’s not easy to replicate a cleantech solution for its competitors, unlike startups that only have marketing as a moat to their defence. Though, startups must understand that a patent by itself doesn’t lead to defensibility unless used in the right way. 


India is at the cusp of transforming cleantech and setting benchmarks that can be followed by global players. Indian VCs and startups are rightly positioned to generate sustainable profit combined with the right impact on society and the economy.


Note: The views and opinions expressed are solely those of the author and does not necessarily reflect the views held by Inc42, its creators or employees. Inc42 is not responsible for the accuracy of any of the information supplied by guest bloggers.

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