In recent years, the demand for power backup solutions has surged in India due to frequent power outages and the growing need for uninterrupted electricity supply, especially in residential, commercial, and industrial sectors. Inverter manufacturing presents a lucrative business opportunity for entrepreneurs looking to enter the electrical equipment industry. This guide provides a step-by-step approach to starting an inverter manufacturing business, covering essential aspects from market research to production setup and marketing strategies.
Table of Contents
What is Inverter Manufacturing Business?
An inverter is an electric device that changes direct current (DC) to alternating current (AC). This conversion may be accomplished by electromechanical means namely motor and generator sets, which are entirely by electronic means. Any Individual having an interest in the electrical and electronics product manufacturing sector can initiate an inverter manufacturing business.
This manufacturing operation doesn’t demand a lot of space. The assembling process is also simple. Inverters find applications where emergency standby power is required and/or there is no AC power available. The inverter is generally used with various sophisticated electronic and mechanical equipment that requires a continuous and un-fluctuating power supply for effective functioning.
Is Inverter Manufacturing Business Profitable?
The electrical power production in our country is much less than the demand. Although the government is making efforts to bridge the gap between demand and supply by inviting private sector participation, the condition is expected to continue as demand is growing at a much further pace.
Railways, telecom, computer institutes, post offices, banks, ATM counters, and Medical equipment are the major commercial sector that uses the inverter for standby power supply.
The Inverters and UPS market in India has witnessed growth in recent years on account of rising demand fueled by the demand and supply gap in electric power supply, expansion of industries, and rising income levels of consumers.
The market is highly fragmented in India; however, it is dominated by large organized players. Small-scale players are also doing very well in this market. The usage of UPS in the household sector where PCS is installed is also increasing.
11 Steps to Start an Inverter Manufacturing Business
1. Do Market Research
Before diving into the inverter manufacturing business, conducting thorough market research is crucial. Evaluate the demand for inverters in various residential, commercial, and industrial segments. Analyze competitors, and understand their product offerings, pricing strategies, distribution channels, and customer feedback. Identify target markets, assess consumer preferences, and anticipate future trends in the power backup industry.
2. Create a Business Plan
Develop a comprehensive business plan outlining your business objectives, target market segments, product range, production capacity, distribution channels, marketing strategies, and financial projections. Determine the legal structure of your business (sole proprietorship, partnership, or private limited company) and obtain necessary licenses and permits from regulatory authorities.
3. Business License and Registration
In starting an inverter manufacturing business, you will need to obtain the following registrations and licenses from Govt. Authority.
- Business registration with ROC
- Trade License from Municipal Authority
- GST Registration
- MSME Udyog Aadhaar Registration
- Trademark Registration
- ‘Consent to Establish’ and ‘Consent to Operate’ from the Pollution Control Board.
- Factory license for medium and large-scale factory operation.
4. Inverter Manufacturing Process
First of all, you must have special transformers for such a product. You have to procure that from outside as per the specifications. Test the critical components, which go to make up the products. Because you have to ensure that they meet the required specifications.
The components are fixed and soldered on a printed circuit board (PCB) according to the design. Additionally, assemble the controls and sockets individually. Then mount the PCB transformers on the chassis and make all the interconnections.
The waveforms at various checkpoints, output voltage, and power are checked adjustments are made so that the products meet the desired performance specifications.
Upon completion of testing the instrument is kept for soaking for a specific period to ensure its quality and reliability.
Raw material procurement → Inspection of components → Sub-assembly → Wiring → Checking of finished products → Testing → Packing
5. Setting Up Manufacturing Facility
Establishing a manufacturing facility is a critical step in starting an inverter manufacturing business. Choose a suitable location with access to raw materials, transportation facilities, and skilled labour. Design the layout of the production unit considering workflow efficiency, safety standards, and equipment placement. Invest in high-quality machinery and equipment such as PCB assembly machines, soldering stations, testing equipment, and packaging machinery.
6. Arrange Funds
Securing adequate funding is crucial for establishing and operating an inverter manufacturing business. Determine the initial investment required for setting up the manufacturing facility, purchasing machinery and equipment, procuring raw materials, hiring skilled personnel, and covering operational expenses.
Explore various financing options such as self-funding, bank loans, venture capital, angel investors, or government schemes for small and medium enterprises (SMEs). Prepare a detailed financial plan including cash flow projections, break-even analysis, and return on investment (ROI) calculations to attract potential investors or lenders. Additionally, consider bootstrapping by starting small and reinvesting profits to gradually expand the business.
7. Buy Inverter Manufacturing Machines
There are a wide variety of machines and tools required to operate an inverter manufacturing business. Some of them are the following:
- Coil winding machine
- Frequency counter
- LCR Bridge (Digital) Ind
- Ocilla scope dual trace (10 MHz)
- DC regulated power supply (30V, 2 Amp)
- Digital Voltage (4½ digits)
- Winding Machine
- Flow soldering machine
- Surface mounting equipment
- Line frequency Monitor
- True RMS meter (4 digits)
- Dummer Stat (4amps & 8 Amps)
- Panel Meters
- HV. Tester
- Electric Drill (½”) (Pillar Type)
- Testing equipment, Power analyzer
- CAD/CAM computer for PCB design
8. Procure Raw Materials
Purchase high-quality raw materials required for inverter manufacturing such as PCBs (Printed Circuit Boards), electronic components (diodes, capacitors, resistors), transformers, battery cabinets, casings, and packaging materials. Build strong relationships with reliable suppliers to ensure a steady supply of raw materials at competitive prices.
In starting an inverter manufacturing unit, you will need to procure the following raw materials:
- Heat Sink
- Auto Wires
- Wire & Sleeves
- Fuse Holder
- Mains Lead
- Copper Wire
- Sleeves Plastic Formers
- Impregnation Compound
- Ktheriod + Prespam Paper
- Hardware fittings
9. Product Development and Quality Assurance
Design and develop a range of inverters catering to different power capacities and customer requirements. Focus on product innovation, reliability, energy efficiency, and safety features. Implement stringent quality control measures at every stage of the manufacturing process to ensure that the final products meet international quality standards and regulatory requirements.
10. Brand Building and Marketing
Invest in branding and marketing initiatives to create brand awareness and position your inverter manufacturing business in the market. Develop a compelling brand identity, logo, and packaging design. Implement digital marketing strategies such as website development, search engine optimization (SEO), social media marketing, and content marketing to reach potential customers and generate leads.
11. Distribution and Sales
Establish a robust distribution network comprising distributors, dealers, retailers, and service centers to reach customers across different regions. Offer attractive incentives, discounts, and after-sales support to distributors and dealers to motivate them to promote your products. Participate in trade fairs, exhibitions, and industry events to showcase your products and network with potential buyers.
Frequently Asked Questions
What is the cost of starting an Inverter Manufacturing Unit?
The minimum cost of opening a small-scale inverter manufacturing plant is a minimum of Rs. 1 Cr in Indian Rupees. There will be an added investment in land and workforce.