India has an opportunity to reduce 1200 million tonnes of carbon dioxide annually by 2032, if it takes the appropriate steps to decouple GDP growth and GHG emissions.

Much of this reduction depends on the country’s ability to adopt clean energy solutions, including building renewable energy capacities, constructing green buildings, converting waste to clean energy, etc. This transition to clean energy has led to the emergence of various start-ups in this space. Small and medium enterprises (SMEs) have always been critical to India’s economic growth; these new-age clean technology start-ups too, should be instrumental in India meeting its clean energy targets.

In this context, it is necessary to assess the policy landscape, as well as the institutional mechanisms in place, to support the growth of the SMEs within the different clean energy segments, i.e. solar rooftop, energy efficiency, Waste to Energy, energy access, smart energy, and electric mobility.

Nearly 140+ interventions that include missions, policies, schemes, etc. have been formulated by the government. These are meant to act as catalysts for the clean energy segments and to provide support to SMEs in the country. However, only a fraction of these focuses specifically on the SMEs and start-ups operating in the clean energy segments. Key interventions by the government include National Mission for Enhanced Energy Efficiency (NMEEE), National Electric Mobility Mission Plan (NEMMP), Smart
Cities Mission (which creates indirect opportunities for SMEs); as well as initiatives such as Atal Innovation Mission (AIM) and Global Innovation & Technology Alliance (GITA) which focus on providing innovation support to start-ups.

Also, 80+ private and government financial institutions and accelerators/incubators are offering financial and business development support to the start-ups and SMEs operating in the space. This provides a fillip to the capacity of the overall ecosystem.

Even as the market progression of the different segments in the clean energy sector continues, the potential for SMEs as manufacturers or service providers is restricted as the thrust on the policy front is muted to a large extent. The slowness in the growth trajectory of clean energy segments is hampering the scale of SMEs compared to other start-up focused sectors such as fin-tech or e-commerce.

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