Part one of a series on clean energy in India.
Approximately 300 million Indians lack access to household electricity within their communities. That’s approximately one quarter of the country’s population. India’s formal energy infrastructure is inadequate and poorly regulated. Lack of access poses challenges to achieving daily household tasks, and generates barriers for many Indians, such as small shop owners and food service specialists, seeking to build a livelihood using electricity as a resource. The shortage of household electricity also prevents children and adult learners from studying at home and at night, limiting potential education outcomes in low resource communities. With the lack of electricity holding back economic and social development in these regions, solar microgrids offer a possible solution to this energy challenge.
Solar-powered microgrids distribute electricity to a bounded area from a relatively small generation point. They can be built and installed easily to power villages lacking conventional grid access. A typical installation wires generation hubs, comprised of solar panels and a battery pack, together. Microgrids are designed to support the low-voltage needs of a rural community, like lighting a small home and charging a mobile phone.
The Indian Ministry of New and Renewable Energy recently set forth a National Solar Mission, stating a goal of 20,000 MW of grid connected solar power by 2022. So far, solar microgrids have a growing presence in Chattisgarh and West Bengal, with newer projects being proposed in Uttar Pradesh and Bihar. The idea is to fill voids in the electrical grid system and replace kerosene lamps with solar microgrids.
While they are an environmentally sustainable avenue towards energy access in low-income communities of India, microgrids present challenges in terms of cost and storage capability. Thus, understanding the economic tradeoffs involved in solar microgrid implementation is critical.
Even in this period of relative economic stability, India’s wealth and modernity are increasingly concentrated in its urban centers. The electrification of rural and remote areas of India presents a salient policy challenge for the Government of India (GOI). Those who lack access to the electricity grid primarily rely on kerosene lamps, which provide a dim and unreliable source of light and heat. Kerosene is a more costly and inefficient way to provide energy. In response, a number of small start-up firms in India are moving toward off-grid innovations to provide rural access to energy. Installation is relatively easy and many are implementing solar energy technology at a small scale.
The solar microgrid is designed with local energy provision in mind, implying a smaller and more individualized scale with the capacity to fill in significant and widespread energy voids in the formal grid system. A recent publication of the United Nations Foundation cites potential improvements in all three dimensions of the Human Development Index (education, health, and income) as being correlated with per capita access to electricity.
Microgrids are more expensive than traditional grid energy but less expensive than individual solar lanterns, given their scalability. They are costly to finance both for suppliers and consumers. In India, energy investment is “overwhelmingly skewed towards [expanding]…the traditional, fossil-fuel reliant grid,” with minimal capability to reach the remote parts of the country.
Operating microgrids in remote areas also involves high overhead costs to lay down a localized grid, and many local entrepreneurs lack the adequate credit history to borrow capital. Solar microgrid technology can also be up to five times more expensive for villagers than traditional grid electricity. As I’ll detail in a future post in this series, there are also challenges regarding the adequate provision of sunlight, or according storage capability.
The increasingly integrated development world has already begun to address these financial challenges. Group-payment schemes in tandem with microfinance institutions could make energy payments more feasible for rural households. Self-Help Groups (SHG), which are group payment structures commonly found in India’s low-income communities, can also expand the financial power of individuals using a system of network accountability. Solar microgrids can benefit from the immense success of the mobile-phone industry in India. Working together, telecom firms and solar power suppliers could reduce costs and tap into immense market opportunity.
Outcomes and Implications
Solar microgrids are a localized solution to energy provision. Solar energy is clean and the proliferation of solar technology can moderate India’s severe pollution problem.
Generation and distribution capacity [can be] built with the local demographics in mind. World Economic Forum
Rather than continuing to wait for the grid to reach their village, communities can take it upon themselves to gain sustainable access to energy using solar microgrids or grid-interactive iterations solar energy where power lines are already down.
This post leads a series on clean energy access in India Check back here for deeper dives into the challenges and opportunities for solar microgrid implementation. Image credit Ggn77 via Wikimedia Commons.