Consulting Knights

Consulting and Strategy Club, IIM Kashipur

Round 2
Case Study v

in association with

CLARO ENERGY PRIVATE LIMITED

The material is confidential and not to be distributed without permission from event organizing team
E: consilium@iimkashipur.ac.in
 Consulting Knights
Consulting and Strategy Club, IIM Kashipur

PROBLEM STATEMENT

BACKGROUND
Claro Energy is an Agri-Renewable company established in 2011. It provides solar-
powered water pumping solutions to meet irrigation and drinking water needs in high
power deficit, diesel dependent, agrarian and poor economic regions of India.
In the past 7 years, Claro Energy has built an extensive footprint across 17 states and
160 districts. With around 8000 pumps deployed on the ground, it has impacted more
than 50,000 farmers and their families. Rather than manufacturing solar pumps,
Claro's business model leverages on Engineering, Procurement and Commissioning.
It focuses on last mile connectivity, building massive operational capabilities in that
regime. Since its boots are on the ground, it has built an extensive network of farmers
in and around India.
v

PROBLEM
A large part of Claro's revenues comes from deployment of solar pumps to farmers,
which are facilitated through Government tenders. Although solar pumps are a much
more viable alternative for diesel pumps in terms of reduced cost over the life of the
pump and utilization of renewable energy, its high upfront capital cost makes them
largely unaffordable for Indian farmers. So, the Govt. provides subsidies so that
farmers only have to pay a fraction of the cost, while the remaining cost is borne by
the Govt. In the long term, high dependence on Government tendering is not very
viable, so Claro Energy wants to explore other opportunities, leveraging on their large
customer base of farmers across the country.

The issue is not limited to Claro Energy; their target customers, i.e. farmers operate in
the rural landscape, which is riddled with inefficiencies. Agriculture employs more than
50% of the total workforce, while contributing only 17-18% to the country's GDP. Major
issues include monsoon instability affecting crop output, lack of awareness of a good
cropping pattern, majority of farmers owning very small chunks of land, tedious supply
chains, and lack of availability of assured quality of seeds, among others.
Claro Energy wants to create a solution that is beneficial for its customers, profitable
for themselves and sustainable to ensure long-term viability.

The material is confidential and not to be distributed without permission from event organizing team
E: consilium@iimkashipur.ac.in
 Consulting Knights
Consulting and Strategy Club, IIM Kashipur

PROBLEM STATEMENT
The problem of inefficiencies in agriculture and low average income of farmers affects
such farmers directly and Agricultural firms, middlemen and the Government indirectly;
that impact of which is increasing costs and disproportionate benefits to farmers,
increased risks of food wastage, underutilized land potential due to lack of precision
agriculture and many others. A successful solution would be to create a model for
Claro Energy to improve the standards of living of farmers and reducing inefficiencies
in agriculture while being profitable and sustainable, addressing impacts caused by
the problem.

The material is confidential and not to be distributed without permission from event organizing team
E: consilium@iimkashipur.ac.in