Solar Microgrids – Ground realities

There is so much of talk about the number of un-electrified villages in India and how micro-grids could be the panacea for all the problems in the rural areas. In fact, I had also written about the promise of off-grid PV and the potential of micro-grids for PV Magazine, purely based on my interactions with some of the pioneers like SELCO in this field(Read the article here). But what are the realities? How challenging is it to make the micro-grids work?
To understand the impact of micro-grids in rural areas, Mr. Sanjoy Sanyal, Country Director at New Ventures India and David Ferris, Cleantech journalist for New York Times and Forbes, went on a road trip to two of the most power deficit states of Uttar Pradesh and Bihar. The trip lasted for 7 days and covered more than 2,000 kilometers. During the trip, the team met micro-grid operators like Husk Power, Minda NextGen Tech, Mera Gao Power, Naturetech Infra, Gram Oorja and the solar pumps of Claro ventures. New Ventures India has released a Briefing Note based on this trip, and share fascinating stories on what they saw in the villages. Some of the excerpts from the Briefing Note are given below.
“Every night, the country side of Uttar Pradesh and Bihar plunges into near-complete darkness. India has many definitions of electrification but we saw only darkness in the districts we visited till, of course, we came to the capital city of Uttar Pradesh, Lucknow, brilliantly decked up in the lights of the tri-colour to celebrate the Republic Day.”
“Micro grids, as they operate in these parts of India, are a perfect example of low-cost, stripped down innovation. They are what is called Jugaad Innovation, a term made popular by a UK based management guru of Indian origin Jaideep Prabhu, a frugal and flexible approach to innovation. The term has been made popular by: The small capacity non-fancy plants provide basic lighting services only: two lights and one mobile charger per household for a monthly subscription of about Rs. 100 per month (numbers vary between operators). The timings are rigid: from 6 PM in the evening to 10 PM/11 PM at night. The Rs. 100 (or about USD 2) per month is an important figure: Study after study has shown that is what the average Indian rural household pays for kerosene and mobile charging. Typical cell phone charging costs are as high as Rs. 5 per charge (that does not include the cost of travelling to a near- by town where charging is available).”
“Almost all micro grid companies have experimented with higher system capacities and whittled them down to suit the market demand. “We initially built systems for larger villages of about 150 to 200 households. We discovered that they took a lot more money to build as about 60% of the costs are towards drawing the distribution lines. This high capital cost made the project unviable.” said Mr. Praveen Bhasin of Minda.”
“Running a micro grid business is no job for the faint hearted. Mr. Brajesh Kumar, the manager for the Uttar Pradesh business of Minda, identified collections as his top challenge. He listed the various excuses that collection agents, who travel from Lucknow to villages in Firozabad district (about 280 kilometers away), are confronted with every month. In one month, the family would have spent all its disposable income on a wedding and in another month the man of the house may simply not be at home. After a few months, when the debts have accumulated, the customer requests a discount. Once the discount is given, the lower figure becomes the norm.”
Several other useful insights can be found in the Briefing Note. The Note can be downloaded here.
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2 thoughts on “Solar Microgrids – Ground realities”

  1. Nice article Sir, really collection is bit challenging and an advance collection of fees can be introduced with slight discount, more over collection agent can be appointed from the village itself.

  2. It is the responsibility of the Govt to step in and electrify the villages by microgrids or otherwise. Private enterprise in the form of village cooperatives can do what no private operator can do. The solution is local. Private intervention should be in vendor or microfinance space only. O&M should be the exclusive domain of locals. They will find their own solution.

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