Growing demand for better quality products at competitive prices is driving manufacturing companies to innovate and produce efficient products, says Ankur Gupta.

Power shortage in India demands for back-up power systems. The back-up power systems market is positively growing with new technologies and methodologies. Indian UPS (uninterruptible power supply) market consists of both Indian and multinational manufacturers competing for a major share of the market.

Research reports states that the major factors driving the growth for UPS in industrial and private sectors are the need of uninterrupted power supply and a wide gap between demand and supply of electricity in India. Majority of the manufacturing industries in India carry out critical nature of processes which cannot afford a millisecond of power disruption and UPS is inevitable. India lacks efficient power grid or sufficient power production that has led to a huge demand for UPS in industrial and commercial sectors.

Now-a-days in India, UPS has become an integral part to address the country’s power fluctuations and also prevents wear and tear to expensive electronics and industrial equipment. Apart from technical reasons, affordable price with servicing options are helping consumers to choose UPS. The UPS market in India is widespread enough to accommodate both organised and unorganised sectors. The unorganised sector caters to the price-sensitive consumers, and organised players mostly target the brand-conscious consumers.

Harnessing power of Sun

With increasing awareness in the solar power and cost of power generated utilising fossil fuels has encouraged the solar power solutions products at affordable prices. Researchers state that the solar industry would definitely reach heights in the future and expand rapidly. Majority of the Indian population are attracted towards the solar power system with batteries because it serves the power needs during the day as well as night.

There is a demand for solar UPS in the rural areas, large NGOs, hospitality industry and retail industry in India. The Tamil Nadu and Gujarat governments announced many policy changes to promote solar usage. Many leading players in India invested huge funds in R&D for the development of solar power utilisation devices and are working on solutions. Solar energy promotions are also helping the UPS market growth. User friendly UPS are developed with new features of remote monitoring and wireless communication in UPS.

A study states that the efficiency of UPS systems will increase along with reduced size and the cost of the UPS will reduce. The UPS systems will be more user-friendly so that they can be connected and controlled from residence, or mobile. Solar UPS systems work on both grid power and solar power. The solar UPS systems in India are still in the budding stage and are slow due to huge government regulations involved.

Majority of the India consumers are aware about their power needs. UPS with economical, durable, higher efficiency, scalability, manageability and system that would fit into the eco-system are opted to manage the power needs. The upcoming technology in solar supported systems are the integration of net metering and sine wave UPS systems which converge two technologies coupled with communication & software technologies in smart grid-Renewable Energy integration.

Green UPS systems

Retail channels are selling UPS units of up to 600VA and UPS with large configurations that require technical support are mostly being sold through channel partners in India. The demand for power supply in India is increasing at a rapid rate with the increase in consumers spending limit, which are the significant contributors of UPS market growth. The new technology and design of the green UPS systems which offer high efficiency rates has emerged in the market. The green UPS helps in conserving energy and reducing the carbon footprint.

While UPS industry is relatively stable in India, there is a necessity to seek new trends in advanced electronics such as Internet of Things based systems and smart grid linked systems. This helps UPS industry to analyse UPS systems from a different and futuristic perspective view. R&D of the power backup systems market helps the overall development of the industry and increase the profitability.

Manufacturing power backup equipment in smaller sizes has ensured greater revenue in commercial and industrial sectors. Availability of service centres help purchasing companies build trust, goodwill and brand value. Major challenges that UPS manufacturers in India face are the low-cost imports and increasing raw-material prices. Almost all suppliers offer customised UPS to survive and sustain growth in the fierce competitive market in India. There is an ample demand for UPS systems from the IT/ITES, BFSI, government sector, manufacturing sector, healthcare, retail, education and research institutes, textile industry, telecom and energy sectors which are driving the growth of the UPS market.

UPS systems in India are adopted by various end users such as ranging from residential households, small offices to large business enterprises. It was observed that there is a growing demand for continuous power supply in tier II and tier III cities along with government initiatives such as Make in India and Digital India. These initiatives are anticipated to drive India UPS market over the coming years. It was estimated that the UPS market in India will grow at a whooping rate by the year 2019 along with the increasing UPS applications.

Market dynamics

Power shortage in Southern India, especially in Tamil Nadu, Karnataka and Kerala is a major reason behind this region contributing majorly to the demand for power backup solutions. South India contributes 31% of the demand for UPS followed by North India which is also a significant contributor of 27% of UPS products. According to demand contribution from different verticals, Government contributes nearly 21% of the total UPS market revenues. Other major contributor is the BFSI (banking, financial services and insurance) sector, netting 14% of the overall UPS market revenues.

The major players in the Indian inverters and UPS market include Luminous Power Technologies Pvt Ltd, Microtek International Pvt Ltd and APC by Schneider, Emerson Network Power, Genus Power Infrastructure Ltd among several other players.

The inverter market in India has been growing at a healthy rate over the years at a compounded annual growth rate (CAGR) of 8.9% for the period FY’2010-FY’2014. This growth has been attributed to the demand and supply gap between electric energy in India and the increasing purchasing power of Indian consumers. Additionally, the decreasing tolerance for long power cuts among consumers in rural and semi-urban areas is also a major factor behind the growth of this market.

The penetration of inverters in rural areas has mainly been facilitated by increasing electrification initiatives of the Government of India. Additionally, the rising standard of living of Indian consumers has acted as a catalyst behind the increasing sales of inverters in India in semi-urban and rural parts of the nation. The market has witnessed reasonably high sales of inverters over the recent years. The total inverters sold in India for FY’2010 was measured at 3.5 million units which increased to 4 million units in FY’2011 experiencing a growth of 12.5%.

Overall, the market has an immense potential taking into consideration the power shortage in India, increasing demand from industries and unplanned power cuts. A shift towards better quality and reliable products at competitive prices will lead to technology innovations as well as the need to conserve energy will drive manufacturing companies to produce efficient products. Expansion of distribution and service network will supplement the growth of the market.

Ankur Gupta is the Director (Marketing and Communications) at Ken Research Pvt Ltd, which provides industry intelligence, equity research reports and business consulting services on gamut of sectors. He can be contact on ankur@kenresearch.com

Key takeaways

>> Demand for solar UPS is growing in rural areas, large NGOs, hospitality industry and retail sector
>> New technology of green UPS systems offering high efficiency rates is emerging
>> Major challenges facing UPS manufacturers in India are low-cost imports and increasing raw-material prices
>> South India contributes 31% of the demand for UPS followed by North India with 27%
>> Increasing electrification is facilitating penetration of inverters in rural areas