Pipes spare factory heat to the plant next door and bills by the unit delivered
TL;DR Spareheat finds factories in the same industrial estate where one throws away warm water or compressor heat and the other burns fuel to make it. It builds the link, owns the kit and charges the receiving plant per unit of heat, at less than its boiler costs. The first market is estate clusters, not cities.
Walk through any Indian industrial estate and you'll find heat being thrown away all day. It leaves through cooling towers, compressor fins and drains, while the unit across the road fires a boiler or diesel heater for 60–80 °C water. A government-backed project with an Indian heat-recovery firm found that about 70% of an air compressor's motor power can be reused as useful heat, and about 15% of a chiller's rejected heat[1]. One industry estimate puts industrial waste heat at 30–35% of industrial energy use[2], but treat that as a rough guide and not a measured figure.
So why does nobody use it? Nobody owns the gap between two plots. Each plant manager optimises inside his own fence and the cheap heat next door just sits there.
The seed pictured city-wide district heat trading. Indian cities have almost no winter heating load though, and cooling is the demand that is rising fast[3]. So I moved the idea to where heat sources and heat users already sit 50–300 metres apart - industrial estates.
Spareheat surveys an estate, logs the temperatures and hours of every heat stream it can measure, and finds pairs that match. A dairy, a dyeing unit or a food processor that needs hot water becomes the buyer. Where no buyer exists, the spare heat drives a small absorption chiller so the source plant cuts its own cooling bill. Spareheat funds the exchangers and insulated pipe, meters every unit and bills monthly, with a floor price below the buyer's fuel cost. The source plant gets a share.
Start with hot water only. Steam brings boiler-inspection rules, so leave it for later.
Plain software that matches streams helps, but the real product is the signed, metered link.
The receiving plant pays for heat like a utility bill, priced at a discount to what its boiler or heater costs per unit today. The source plant pays nothing and earns a small fee or free cooling. Estate associations and state industrial corporations are allies and not payers, because they control the land between plots. Plants do already buy heat recovery for their own sites - one Indian heat-recovery firm sells it to auto, FMCG and pharma plants on a promise of savings[4].
Fuel and electricity prices make 60–80 °C water a real cost line for textile, food and chemical units. Cooling demand in India is projected to grow about eight times by 2037–38 over 2017–18[3], which makes heat-driven cooling worth a second look. And cheap IoT meters now let both sides trust a bill per unit of heat, which was always the old sticking point.
There is no public figure for heat traded between factories in India. I looked and found none. The firm signals are narrower - the recoverable shares above for compressors and chillers[1], and a domestic vendor already selling single-site recovery with monitored savings[4]. National cooling demand growth[3] is adjacent context, nothing more. If you want a market size then build it estate by estate and not from a national number.
That Indian firm recovers heat inside one plant from compressors, chillers, flue gas and textile effluent, with IoT monitoring[4]. It does not run links across plot boundaries. The Kalundborg industrial park in Denmark has had 17 public and private firms swapping water, energy and materials since 1972[5], which proves cross-company exchange can last decades. No Indian player I found sells metered heat between neighbours as a service.
| Difficulty | Hard (58/100) |
| Starting capital | ₹2.2–4.4 Cr |
| Time to launch | 12–18 months |
The engineering is ordinary. The contracts are the hard part, because two factories with different owners, shutdown calendars and credit quality have to agree on a 7–10 year link. You also carry the capital cost of every link until heat sales pay it back, and one plant closing can strand a pipe.
No energy licence for hot-water links, but steam changes that, and every pipe needs permission.
Building this outside India? The categories above usually have a local equivalent, so check with your own regulator.
Don't bill or sign a contract on modelled savings alone. Measure every site yourself, because recovery shares vary by equipment and one project's numbers won't hold at the next plant[1].
Want to work out the AI layer for Spareheat? Talk to Yash →
Here's what can go south -
I think this is worth a look for a founder with thermal engineering and industrial sales experience who can live with slow, contract-heavy deals. If you want a software business then skip it, because the matching tool alone is not a product. Prove one thing first - a single estate with two paying links where the buyer saves at least 20% on heating cost after your fee.
Plan for roughly ₹2.2–4.4 Cr, mostly on exchangers, insulated pipe and metering that you own and recover through heat sales.
Hot-water links need no energy licence, but you need right of way from the estate and must follow plant safety rules. Steam lines may bring boiler inspection, so start with hot water.
Yes, the Kalundborg industrial park in Denmark is a long-running example of plants sharing heat and other flows[5]. Check local rules on pipelines, pressure equipment and energy supply.
The free Spareheat validation kit has the line-by-line capital breakdown, the effort scoring, the permissions checklist, a 14-day validation sprint with pass/fail targets, a 90-day launch plan, 10 interview questions for plant managers and estate bodies, and 5 assumptions to test. Download the kit →
Thinking about building Spareheat or something close to it? The make-or-break work is getting two unrelated factories to sign one long heat contract, and that's the kind of deal I help founders put together. 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.