Indian Solar Off-Grid Market: Achievements and Opportunities

By Viraj Gada, GOGLA India Regional Representative

India is a renewable energy pioneer, and – through decentralized renewable energy solutions - could also a become global leader in universal energy access.

Between 2000 and 2014, the number of people in India without access to electricity almost halved, from 422 million to 264 million people (IEA and World Bank 2017). In 2014, India’s electrification rate reached 79.6 percent. This was up from 60 percent in 2000, with 70 percent of the newly electrified population residing in rural areas, suggesting the Indian Government’s focus on rural electrification.

Photo Credit: Greenlight Planet

According to the International Energy Agency, India stands out as “one of the largest electrification success stories in history”, accounting for 2 out of every 5 people gaining access to electricity who hadn’t previously had access, since 2000. Yet despite these bold steps for sustainable energy generation, nearly 240 million people in India continue to live without electricity. For the majority of India’s population, the issue is two-fold: finance and accessibility. For many people, the money spent on accessing power represents a significant slice of their income. At the same time, the existing grid-based power systems have not reached everyone in the country, leaving millions in the dark. Based on data from the Government’s GARV dashboard, there are still 40 million households without electricity access. And at the current rate of electrification (of 300,000 households per month) it would take more than 10 years to electrify these households. More needs to be done, and faster, if India is to reach universal energy access by 2030, the target set by the United Nations Sustainable Development Goal 7.

From village to household electrification

Until recently, the focus in India was on village electrification. This, however, did not provide an accurate metric for judging rural electrification as a village was considered to be ‘electrified’ if electricity was provided in public places such as schools, panchayat offices, health centres, dispensaries and community centres, and at least 10% of households in the village (this criteria was used by the power ministry since 1997 and can be found here). In short, a village was considered to be ‘electrified’ even if 90 percent of households do not have electricity. However, this narrative changed with the current Indian government, which started to focus more on householdlevel electrification. This approach came under even greater focus with the launch of Deen Dayal Upadhyaya Gram Jyoti Yojana - a Government of India scheme designed to provide continuous power supply to rural India, and followed in September 2017 by the launch of Pradhan Mantri Sahaj Bijli Har Ghar Yojana or ‘Saubhagya’ Scheme. The objective of the Saubhagya scheme is to provide energy access to all through last mile connectivity, reaching all remaining un-electrified households in rural and urban areas with electricity, to achieve universal household electrification in the country by end of 2019. Under this scheme, electricity connections will be given free to people identified by the Socio Economic and Caste Census of 2011 while others will get it for Rs. 500, payable in 10 instalments in the bill. Also under the scheme, households in remote and inaccessible areas, would be electrified through solar power packs (comprising 200 to 300 Watt panel and battery back with 5 LED light, 1 DC Fan, 1 DC power plug) with a repair and maintenance service for 5 years.

What does the data say?
Despite kerosene subsidies, standalone off-grid solar products have had a significant impact in India. For example, the Global Off-Grid Solar Market Semi Annual Report and impact metrics show that amongst GOGLA Members and Lighting Global Associates:

• Over 1 million branded pico-PV and SHS products were sold in India in the first half of 2017, making it the country with the highest sales volumes; while, 
• Over the last three years, around 9.3 million branded products were sold in the country, providing improved energy access to an estimated 40 million people and enabling more than 7 million people to support income-generating activities. 

CLEAN's "State of the Sector" report meanwhile provided a first attempt to measure the whole of the Indian off-grid market in FY 2016-17, finding that 3.6 million solar lanterns and home systems had been sold in total.

What are the opportunities here?

The opportunities with standalone off-grid solar products are huge. Such products could help the Indian Government to meet its target of electrification of all households by 2019 and 24hr energy access by 2022. Such solutions should play a key part in the Government’s plans for “Power for All”, supplementing the grid penetration efforts. According to a new report by the International Energy Agency, decentralized systems, led by solar PV in off-grid and mini-grid systems, “will be the least-cost solution for three-quarters of the additional connections needed” to achieve Sustainable Development Goal 7 (SDG7) before 2030. Plus, with the increase of mobile phone penetration across rural areas, coupled with the success of financing of clean energy products by microfinance institutions; there is a big role for pay-as-you-go technology to play in India.

And what about last mile distribution of these products? With the right distribution and method for collection of payments, this model could be as successful in India as it has been across Africa. And with appropriate, well-managed support from the Indian Government, together with focused efforts from all sector players, India could definitely achieve the United Nations Sustainable Development Goal 7 – “Ensure access to affordable, reliable, sustainable and modern energy for all” by 2030, likely well before. Watch this space….

Photo credit: Greenlight Planet.

This article is part of a series of blog posts on the off-grid solar market in Asia in the run-up to the Global Off-Grid Solar Forum and Expo (22-24 January 2017 in Hong Kong). Organized by GOGLA and Lighting Global and supported by the World Bank's ESMAP program, the Forum and Expo is the world's premier off-grid solar event bringing together more than 500 off-grid solar professionals. Read more at www.offgridsolarforum.org.