Digital penetration pushing the UPS market in India

The power deficit in the country along with the adoption of digitalization in everyday life has become the primary factors that are driving the growing trend of UPS adoption as a power backup system  

Power, an imperative element of everyday life has eased the daily workflows of human beings. But a developing country like India is still struggling to provide round the clock power supply to its citizens. Though the country coped a lot with the power deficit but still there is a gap between the demand and supply of power. This has been a major driving force for the power backup industry.

Moreover, there is a continuous growth observed across all the verticals which demands for uninterrupted power supply. Government initiatives like Smart City, Digital India along with other factors like economic growth, Co-location Data Centers, healthcare, education etc are stimulating the power backup market.

It is also noticeable that the power backup industry is expected to record a slow growth which consists of inverters, UPS and DG sets. Out of these, the UPS segment is showing a steady growth in this market backed by a  developing IT sector and digital penetration.  
 

Power backup market landscape
India, a developing country, often faces the problem of power deficiency which in turn has geared up the power backup market. All the organizations use computers to ease their workflows and the uncertainty regarding power supply in the country has pushed the UPS systems market.    

“India being a power deficit nation has a large market for power backup products. There has been a growing trend in recognizing UPS systems as an essential power backup device as nearly every organization today uses computers to smoothen their workflows. 

The demand in the Indian inverter/UPS market has increased due to constant power shortages, and a strong push from the government to accelerate the National Solar Mission. As the country moves towards high power back up requirement, the entire critical load needs to be backed up without any downtime. At Vertiv as well, we have witnessed a significant rise in >200kVA Modular and Monolithic segment for the Co-location Data centers, MSC’s, etc.” says Vikas Srivastava, Director, Product Management, Vertiv India. 

Reiterating similar views, Gurudutt M, Director – Channels, India & SAARC, ITD Sales Building & IT Business APC by Schneider Electric says that there is a gap between demand and supply of power in many states which is boosting the power backup industry. Other factors like economic growth, rise in income etc are also acting as a catalyst in the growth trajectory.  He adds, “As per industry estimates, the INR 10,000 crore industry is projected to grow at a rate of 15-20 per cent year on year basis. Inspite of recent policy reforms in the power and energy segment, there is a huge demand supply gap existing in the industry. In many states, people get power for just 6 to 8 hours a day.
This impending power shortage has given a push to the power backup industry. Other factors driving this growth includes vigorous economic growth, rise in income etc. Indeed, products like power generators, inverters, uninterrupted power supply (UPS) systems and storage batteries are finding an expanding market.”

Though the power backup segment is expected to grow in a slow pace but the UPS segment is witnessing a steady growth in the market. Within this UPS segment the speed of growth are different for various product categories.    

  
“The power backup sector is expecting to grow slowly but steadily. The UPS segment has been witnessing a consistent rise owing to the rapid development of the IT sector and digital penetration. However, the pace of growth is different within the various product categories. Line Interactive is witnessing a de growth, Single Phase growth is flat whereas Three Phase is growing aggressively,” explains Palash Nandy, Chief Commercial Officer, Numeric India. 

Contradicting the above views, Manoj Jain, Vice President, Microtek International says, “Power backup market in India is not growing much as the increasing demand in power is taken care by the solar power.”

Market Size
The Power backup industry consists of inverters, UPS and DG sets and the market is anticipated to grow from USD 1.5 billion to USD 2.6 billion by the end of the year.    

“The power backup industry, which includes products such as inverters, UPS and DG sets is expected to witness an upward trend from the current USD 1.5 billion to USD 2.6 billion by the end of the year. Though India’s power deficit has come down to some extent, the power backup industry is still on a high growth trajectory. Demand for power generation equipment and components are also growing,” predicts Gurudutt. 

Factors like power deficiency, increase in income and rapid industrialization have increased the spending on power backup products and the market is projected to grow at 15-20% year on year. The Indian UPS market is gaining momentum in the market and is growing at a CAGR of 9.8% in 2014- 2019. This traction is coming from IT penetration, pharma, banking, enterprise segment etc.   

“Power shortage, increase in income levels and expansion of industries have resulted in increased spending on power backup products in India. According to experts, the power backup segment is valued at Rs 10,000 crore and is expected to grow at a rate of 15-20% year on year basis. According to Ken Research’s latest publication titled ‘India Inverters and UPS Market Outlook to 2019’, India’s inverter market is projected to grow at an appreciable CAGR of 9.4% by 2019. The increasing disposable incomes of households, the sales of electrical equipments like ACs, refrigerators, televisions and microwaves is expected to increase and inadequate power supply will drive consumers to opt for inverters. Indian UPS market is also projected to scale new heights, expanding at a CAGR of 9.8% in 2014- 2019. This is due to shortage of power, expansion of IT, banking, pharma and small, big and medium enterprise segments and increasing income levels of consumers,” views Kunwer Sachdev, Managing Director, Su-Kam. 

Talking about the India UPS market size, Palash says, “India’s power sector is one of the most diversified in the world and is undergoing a significant change that has redefined the industry outlook. The total size of the UPS market in India has been established at Rs 2200 crore (This is only UPS market without taking into consideration the batteries that form a part of the UPS system.).” 

Growth drivers
The power backup market is expected to see a double digit surge in coming years and the boost which is observed in the market is fueled by many factors like industries with critical power need such as servers, data centers, electronic & medical equipment etc. 

“India’s power back up segment is expected to witness a double-digit growth in the coming years. Products that will dominate include high power range, yet eco-friendly UPS systems, batteries and storage products. Growing industries with critical power requirement such as, data centers, servers, and electronic & medical equipment will is further boosting the demand. 

Another factor for growth is the server power cuts that happen across the country. There is also lack of adequate power grids to meet our domestic & industrial usage. This makes the need for micro-grids strong. Moreover, rural India is no more willing to bear power cuts of 8-10 hours. India’s rural poor is increasingly opting for affordable backup solutions these days,” highlights Gurudutt M.  

Apart from industries which requires critical power need, other factors which are influencing the growth of UPS segment are Digital India initiative, Smart City, growth of surveillance, necessity of clean power across industries etc.  

“The factors that are driving the growth in the UPS segment are the need of uninterrupted power supply and also CLEAN power to run basic infrastructure both in the industrial and private sector. The widening gap between the demand and supply of electricity in India is also a major factor driving the UPS market. Other factor includes Government of India’s Digital India initiative, Smart Cities initiative, ICT@ Schools,  the need of clean power across Industries, various infrastructure projects, the growth of surveillance needs, distance education projects, digitalization of entertainment penetration of sensitive electronic gadgets at homes to name a few which further increases demand for a clean and uninterrupted power supply. The fast growth of IT/ITES, Govt, Infrastructure & Education segments also is creating the demand and faster growth of the UPS sector,” describes Palash. 

Vikas is of the same view and finds Smart City and Digital India projects as the drivers of the power  backup segment. He adds, “Currently, Smart City Build and Digital India initiatives are picking up and driving the growth in this segment. These two initiatives have been gaining traction from the Government as well as the community at large. In the past few years there has been substantial activity in the Smart City project to ensure that we reach our target of powering maximum homes by 2020. Considering the government’s commitment to delivering ‘24x7 power for all’ will prove to be beneficial to the power back-up industry. Similarly, the economy has been shifting towards a digital approach in terms of secure software solutions aided by sturdy hardware and financial technology with the advent of the Digital India mission. Therefore, India is expected to witness a major shift over the next few years.”

Growth Verticals
In the UPS segment, three phase and modular UPS have moved up the growth ladder. The modular UPS offers flexibility to design solutions, ease of maintenance , lower operating expenses etc.    

“While closely monitoring the market we have noticed that the three phase and modular UPS segment has seen an upward growth between 5-8%. Modular UPS which not only offers flexibility to its customer to design his solutions but provides ease of maintenance and safety; capital preservation and reduce operating expenses is witnessing traction in the market,” observes Palash.

As per Manoj, “In online UPS and extended back up UPS/inverters we see a major traction.”
 

Eco-friendly products
Vertive has always stressed on sustainable development and energy efficient products. The company as an organization is very conscious about its responsibilities towards society so it keeps a check on its products to make sure the safety of environment and communities.   

“With the amount of waste generated, especially by electronic providers, there is a considerable risk to the environment due to radiation poisoning. In such a scenario, it is important for us as an organization to take stock of the products we provide and how we are doing our bit to ensure safety of our environment and communities. Vertiv being a global multinational, emphasizes on sustainable development and energy efficient products. All our latest products in the UPS segment like, EXM, EXL S1, Trinergy Cube are highly energy efficient, with less heat dissipation which helps in low CO2 emissions, “ comments Vikas.  

Energy efficiency and making the most out the products by customers are two important aspect of Numeric. The company makes the most energy efficient products and few of them records an energy efficiency of up to 96%.  

“At Numeric, we believe in maximizing the product value and energy efficiency is one of the important key drivers. This starts from the choice of raw materials, the manufacturing process, choice of manufacturing unit and transportation means. Products that are available at Numeric are most energy efficient products in the Indian market. Some of the offerings have an energy efficiency levels are up to 96%,” states Palash. 

For Schneider Electric, energy efficiency is the most convenient way to address  challenges like energy demand, rising energy costs and climate change etc. It is committed to reduce carbon emissions and its products and solutions are made keeping it as a focus.     

“At Schneider Electric, we belive that ‘energy efficiency’ is the cheapest, cleanest and most abundant form to overcome the challenges of growing energy demand, rising energy costs and climate change. We are a global specialist in energy management and automation helping our customers manage their energy and process in ways that are safe, reliable, efficient and sustainable. From simple switches to complex operational systems, technology, software, green building solutions, all are pivoted on sustainability. We are committed to reduce carbon emissions and all our products and solutions are targeted towards that,” explains Gurudutt. 

Su-Kam is being guided by the principle of innovation. It is at the core of the company. Most of the products of the company are based on solar energy as it reduces carbon footprint, lower power bills etc. 

“Our products are completely eco-friendly. Innovation is our guiding principle. From manufacturing plastic body inverters to leveraging the Internet of Things and Artificial Intelligence, our products are synonymous with innovation.   Most of them are powered by solar energy which is the future of India’s energy roadmap due to its ability to bridge power gap, reduce carbon footprint and minimize burgeoning power bills,” says Kunwer. 

While talking on the eco-friendly products, Manoj mentions, “Microtek is continuously focusing on developing products and technologies which save energy and are eco-friendly.” 

To Conclude...
There are several factors which are playing up for the growth of the power backup market but still it is expected to go through a slow and steady growth in the country. The UPS segment is faring well in the market and is expected to expand at a CAGR of 9.8% in 2014- 2019.

The growth of the UPS market is mainly guided by the government initiatives that are undertaken by the Government of India and it is expected that more of these projects along with economic growth, infrastructure projects and surveillance needs will further enhance the market. 

Aparna Mullick
aparna@varindia.com