Phase-by-phase energy retrofits for small factories, financed through ADEETIE
TL;DR Notchwatt helps small factory owners in energy-heavy clusters upgrade their sheds and utilities in stages, starting with the cheapest, fastest-paying fix. It meters the unit, writes the project report, packages the loan for the government's interest subsidy, and proves the savings afterwards. Owners pay a fee per phase, partly from the savings.
Small factories in sectors like forging, foundry, ceramics and textiles run old motors, compressors, furnaces and leaky sheds. Owners know the energy bills hurt but rarely have the time, data or bank file to fix everything in one go. A full retrofit is too big a loan for a micro unit, and a vendor selling one machine isn't a plan.
The government has now put money on the table. Its own projection is that the right technologies could cut MSME energy use by 30–50%[1], though that's a ministerial claim, not a measured result.
So who turns a scheme into signed projects? Someone still has to do the audits, reports and loan papers unit by unit, and right now that someone is mostly missing.
Notchwatt treats a factory as a sequence of small projects. In week one, clamp-on meters go on the main loads for two weeks. The team then writes a phased plan - phase one is usually compressed-air leaks, motor and pump swaps and lighting, which pay back fast. Phase two is process heat, insulation and the building shell. Phase three is rooftop solar and heat recovery.
Each phase is written up as a detailed project report in the format lenders and the scheme expect, so the owner can borrow for it. Notchwatt doesn't install equipment itself. It hands the specification to vetted local vendors and checks the work. After commissioning, the meters stay on and Notchwatt sends a monthly savings statement, which the owner needs to keep the interest subsidy and which builds the case for the next phase.
The seed talked about buildings broadly. I picked factory buildings because that's where a funded scheme now pays for the audit and the loan.
The factory owner pays a small fee for metering and the phased plan, a fee per project report, and a monthly fee for measuring savings. Part of the audit cost may be covered by the scheme's ₹50 Cr audit allocation[1], depending on empanelment. Equipment vendors are a second source of income through referral fees, though that needs care if you want your advice to stay independent.
In July 2025 the Ministry of Power launched ADEETIE with ₹1,000 Cr, split into ₹875 Cr of interest subvention, ₹50 Cr for energy audits and ₹75 Cr for implementation support[1]. Micro and small units get a 5% interest subsidy and medium units 3%, across 14 sectors and 60 clusters in the first phase, running to FY2027-28[2]. That window is short, so don't dawdle.
The scheme is expected to mobilise about ₹9,000 Cr of investment, including ₹6,750 Cr of MSME lending[2]. That's the narrowest defensible figure, because it's money that needs audits, reports and verified savings. No public figure exists for the number of units in the 60 first-phase clusters.
BEE funds investment-grade audits, project reports and post-project monitoring under the scheme through its own channels[3]. Energy-savings firms sell savings to larger commercial buildings[4]. Equipment makers offer free audits that, surprise surprise, lead to their own products. The gap for Notchwatt is a vendor-neutral firm that stays with one small factory across several phases and keeps the savings proof the subsidy depends on.
| Difficulty | Moderate (44/100) |
| Starting capital | ₹45–85 L |
| Time to launch | 4–6 months |
Engineering is the easy part. The hard parts are getting empanelled or partnering with an empanelled agency, earning trust in tight-knit clusters, and keeping meters running in dusty, hot sheds for years. Owners in a cluster talk to each other, so one bad project can close a whole town to you.
No licence is needed to plan retrofits, but scheme rules and auditor credentials matter before you sell.
Building this outside India? The categories above usually have a local equivalent, so check with your own regulator.
Don't trust AI to certify savings or approve a loan file. A certified auditor has to sign those, and a bad baseline will mislead everyone.
Want to work out the AI layer for Notchwatt? Talk to Yash →
I like this for an energy engineer who knows one industrial cluster and has patience with small owners. If you're hoping to scale nationally in year one then it's the wrong idea. Prove two things first - that 10 units in one cluster will pay for a phased plan, and that two loans get sanctioned under the scheme.
Plan for roughly ₹45–85 L, mostly for meters, a small engineering team and the first months of selling into clusters.
No sector licence, but audits that lenders or the ADEETIE scheme rely on need a BEE-certified energy auditor, and you should check the scheme's empanelment rules.
Yes, if small factories there have a subsidy or loan scheme for efficiency. The financing route is what makes this model work, so find that first.
The free Notchwatt validation kit has the line-by-line capital breakdown, the effort scoring, the scheme and rules checklist, a 14-day validation sprint with pass/fail targets, a 90-day launch plan, 10 interview questions for factory owners and lenders, and 5 assumptions to test. Download the kit →
Thinking about building Notchwatt or something close to it? The make-or-break work is getting into the scheme's audit channel and winning trust in one cluster, and I'm happy to help you map that out. If you need a hand, you know where to find me. Talk to Yash →
For illustration only. Names are fictional and ideas hypothetical; sourced facts are real but may be out of date. Nothing here is legal, financial or professional advice, and Yash Khatri is not personally liable for any use of it. Read the full disclaimer.