Indian Off-grid market – Where Solar makes the real difference!!

(This article appeared in the February 2013 Print Edition of PV-Magazine )
The Indian off-grid PV segment is reaching a point of inflection. On the one hand, there is an ever increasing demand for energy. About 400 million people in India have no access to electricity. Of these, a majority lives in remote, unelectrified villages. Even in electrified areas, power outages are rampant. To top it all, the national grid collapsed for 2 days in July 2012. This blackout, known now as the “world’s largest blackout” affected the lives of more than 600 million people.
On the other hand, there is a perfect source of energy, Solar, that can meet the hitherto unsatisfied demand for electricity. India is blessed with abundant sunlight and most parts of India receive 4-7 kWh/m2/day of solar energy. Solar PV, due to its scalability, can be deployed anywhere in the country economically, irrespective of its size. The major hurdle in the adoption of PV – the high upfront cost – is being overcome with the help of falling PV prices, which has reduced from $4/Wp in 2009 to $1.8/Wp in mid-2012.
While grid-connected solar, which crossed 1 GW of cumulative installations recently, has been in the limelight during the last few years, off-grid PV has  started to realise its potential to fundamentally transform the lives of people who have never had access to electricity.
Solar and rural India
The Ministry of New and Renewable Energy(MNRE), through the flagship Solar programme – the Jawaharlal Nehru National Solar Mission(JNNSM), has set a target of adding 2 GW of off-grid systems and 20 million solar street lights by 2022. The deployment of these systems is encouraged by a mix of capital subsidies and soft loans and also appointed channel partners who could implement these systems.
However, it is the private sector- a mix of social entrepreneurs, NGOs, non-profit organisations and corporates- that is playing a major role in deployment of these systems.  With the falling cost of PV systems, increasing awareness and advances in technology, adaption of off-grid PV is set to increase at a fast pace. From product based approach, off-grid PV market is evolving into a system based approach.
One area­ where solar has made significant inroads is the replacement of diesel used in telecom towers. In India, there are about 450,000 telecom towers that consume about 3.4 billion litres of diesel every year. Of these, at least 200,000 towers can be solarised and several telecom companies have actively started to install off-grid PV systems to power these towers.
Until recently, the penetration of off-grid PV was limited to standalone PV products like lanterns, fans and water pumps, among others. Tata BP Solar, which is now Tata Power Solar, had been one of the pioneers in the sector since 1989. The Energy and Resources Institute (TERI), also started by the Tata Group, launched the famous Lighting A Billion Lives (LABL) in 2007. This programme focussed on an innovative business model of ‘’energy service delivery’’ wherein solar lamps are rented out to the people in unelectrified areas by a local entrepreneur who is trained by TERI to operate and manage the system. The programme, initially supported by grants and by the daily usage fee from the people, now involves NGOs, Micro-finance institutions (MFI) and Technology partners.
d.light, a US based social enterprise founded by the Stanford University business school graduates Sam Goldman and Ned Tozun, has been focussing exclusively on solar lanterns. At present, a majority of the rural population use mostly kerosene for home lighting and cooking purposes. Kerosene lamps are harmful in many ways. First, kerosene lamps are safety and health hazards, causing respiratory disorders, impairment of eyes and in many cases, severe burns. Second, these lamps are an environmental hazard, emitting high levels of Co2. Third, they are a drain on the exchequer – kerosene is highly subsidised and the under-recovery of kerosene in 2011 was Rs. 27,532 Crore(~$5 Billion). Recognizing the importance of clean energy source in the lives of these rural people, d.light has positioned its products as alternatives to kerosene lamps. In India, the company has partnered with oil companies like BPCL and HPCL and also with micro-finance institutions. Oil companies sell the subsidised kerosene at huge losses and are keen on replacing it with alternatives like solar lanterns.
SELCO Solar, a social enterprise started by Dr. Harish Hande in 1995 in Bangalore, India, took a different approach. Dr. Hande, who was working on a PhD at the University of Massachusetts, realised that solar can transform the lives of economically backward people but the sustainability of an off-grid solar business model will depend on providing customised products and services supported by doorstep financing. Since its inception, SELCO has been enormously successful having reached more than half-a-million people. Dr. Hande was awarded the prestigious “Ramon Magsaysay Award” for his efforts to put solar in the hands of the poor. The award citation had this to say about SELCO – “SELCO is more than just a technology provider. By treating the poor as partners instead of mere consumers, SELCO builds their confidence as it assists them in accessing and using technology to better their lives. Poverty reduction is central to its goal“.
The future of off-grid PV is taking the shape of micro-grids that can power entire village communities. Delhi based Minda NexGenTech, an automotive component supplier, has commissioned micro-grids in more than 15 villages/hamlets during the past 2 years in different parts of the country. Minda started off the programme with AC(Alternating Current) systems, but is now shifting to DC micro grids. One of the challenges associated with micro-grids in villages is the risk of default by the users, who usually are very poor and whose income is very unpredictable on a daily basis. Minda Group is addressing this challenge by installing pre-paid metering systems.
The rapid adaption of mobile telephones in villages has given birth to new business models. Simpa Networks, a Bangalore based firm, has developed a mobile phone based Pay-As-You Go PV system. Under this model called ‘’Progressive Purchase’’, a customer can lease out a PV system for a small down payment and prepay for the solar energy using the mobile phones. After a specific payment, the system unlocks and the customer will get the ownership of the system. Simpa Networks works in partnership with SELCO.
The Indian off-grid story is not complete without mention of the new kid on the block, ‘’Gram Power’’. Started in 2011 by 24 year old Yash Khaitan when he was pursuing his Master’s degree in University of Berkeley, the company has developed a mobile phone based Pay-As-You-Go or pre-paid microgrids. Gram Power has been quite successful in getting grants from, Intel, UC Berkley and a few Angel investors in developing and deploying their in-house power management technology as well as the innovative business model.
In the last few years, to talk solar was to bring memories of the large blue panels of solar farms to the fore. Some knew of rooftops, but very few realised the power of solar to transform their lives.
But awareness about the ‘off-grid’ market is growing, thanks to the efforts of people quoted in the examples above. These days you see advertisements on the television about solar products. A few months back, a Chennai-based company (Solkar Solar) held ‘solar mela’ in several cities—a kind of solar festival to sensitise people about solar products. Street lights sporting solar panels are becoming ubiquitous in upcoming industrial estates and gated residential communities.  In Chennai, there is even a solar powered truck-mounted traffic signal—the system can be rushed to any place there might be a traffic jam to clear it.
All these give us one clear message—we are at the cusp of a major off-grid solar PV revolution.
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3 thoughts on “Indian Off-grid market – Where Solar makes the real difference!!”

  1. This is a great post. I have been looking for an overview on offgrid solar projects in India but couldnt find a cohesive writeup. This one explains the solar story in good breadth with some very apt examples. Thanks!

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