Lending a hand to Modi’s Swachh Bharat and Solar India

Saikat Roy - Rural Agri Venture.jpg (2)

From the ramparts of Red Fort, Prime Minister Modi has now twice courageously dwelled upon the need for cleanliness and inclusive development – and reaffirmed his commitment to provide toilets and electricity to all Indians. He boldly set a deadline for his government’s endeavor to provide electricity to all villages without access to the grid in 1000 days. Out of 597464 villages in India, the 2011 census shows 5, 79,012 villages have already received grid power. PM Modi intends to complete the task of providing electrification to the remaining 18,452 villages by 31st May 2018. The centre’s new flagship scheme Deendayal Upadhaya Gram Jyoti Yojana (DDUGJY) has allocated over Rs 76000 crores for village electrification. Apart from feeder separation and metering in villages, the government is pushing for strengthening the distribution infrastructure. There are challenges, nonetheless, and this actually opens the door for the private sector to lend Prime Minister Modi a helping hand.

It is perfectly plausible for a business to run sustainably with social impact as its underlying mission.  A few companies have developed a new business model with rural electrification as its centre piece. Instead of relying on benevolent donors, these companies are creating a professional channel to attract a sustained flow of investment from corporates’ Corporate Social Responsibility funds. The centre has further made this route attractive by making CSR mandatory and institutionalizing it into an act. Solar rural electrification is one such avenue for corporates to effectively deploy their CSR funds. Decentralized solar pico grids are particularly relevant for a large number of unelectrified or poorly electrified hamlets which offer little economic viability to discoms for grid extension.

It is now banal to claim electricity is the building block of rural development. A new age, digital India necessitates access to clean energy for all Indians. Micro grids fed by renewable energy may offer a panacea for rural India’s woes. Off-grid villages and peri-urban households can perhaps be better served by solar pico-grids, whether sanctioned privately or by the government. Abundance of sunshine, dropping cost of solar panels, bureaucratic delays and long term solar sustainability make community level power grids a robust mechanism to deliver on the government’s mandate.  It is designed especially for off-grid rural application, a typical half a kilo watt, solar DC grid can power thirty houses – providing two light bulbs and a mobile charging point each which is considered sufficient for an average household. These systems incorporate a number of safety features in order to protect the installed equipment and humans including a sealed enclosure, short-circuit protection, battery guard and overload protection.

Consider the social impact generated by installing a single grid. Over a period of 25 years (the life of a PV system), a single 500-watt micro grid is capable of serving at least 150 rural Indians, saving 27375000 Watts of energy to the grid, approximately 45000 litres of kerosene fuel savings and cost savings of Rs 585000. Apart from this, installation and maintenance would require training local villagers to fix and repair minor faults in the system, thereby promoting skill development and generating employment. A minor fee may be charged from each household for maintenance. Depending on the business model (typically a combination of Build-Own-Operate-Maintain), the mini-grid would also require employing a few local villagers as monthly revenue collectors. With funds diverted from JNNSM & DDUGJY, this could transform into a large scale, pan-India capacity building, technical training and rural entrepreneurship program.

In another scenario, a slightly wealthier farmer or household in the village can commission the grid on their own and either provide electricity pro bono or charge a nominal fee from fellow villagers. Such community grids promote social cohesion and can also be facilitated by joint community loans which the government can incentivize through local banks and panchayats. The centre or state government ought to provide the right impetus – this could take the shape of capital subsidies, interest waivers, state underwriting of loans and a separate bank channel for rural energy finance.

The sun, it seems, never stops shining on India – A country that receives adequate solar radiation for 300 days, amounting to 3,000 hours of sunshine equivalent to more than 5,000 trillion KWh of energy. The potential solar energy generated is more than sufficient for India’s energy consumption projected in 2030. Both ubiquitous electrification and a solar India feature high on the centre’s agenda and the time are ripe for coming out with a comprehensive medium term policy to provide an appropriate ecosystem for the private sector to flourish in this emerging sector. The potential to develop into a comprehensive program addressing such a fundamental human need is enormous. What could be socially, politically, environmentally and economically more rewarding for an Indian government with such a powerful mandate.

Saikat Roy – Chief Business Officer – Renewable and Efficient Energy