As electric power availability gains importance in India as a major election issue, the power sector and its pitfalls are also being scrutinized ever more deeply. It is not easy to accurately analyze India’s total power requirement because nearly half the population has no excess to the traditional grid power. If a rural household that has never had access to electric power, gets it now, they would use it optimally irrespective of the quantum of power made available. A solar power unit that can generate up to 2Kva of electric power is sufficient to meet the lighting, irrigation and sundry domestic needs of a rural household.
There is a lot of purpose and enthusiasm in the way the solar energy infrastructure programs are being being implemented all over the country. The government offers a flat 30% discount on purchase of solar energy equipment to both off-grid individual households and micro grid based community solar plants producing around 100 Kva of power for 50 households. Resource optimization is a key factor in the solar power industry; it will have to be a mixture of all the variations that the solar energy option offers.
MNRE (Ministry of Renewable Energy) has come up with a project aimed at providing meaningful financial assistance to rural households and communities to purchase solar home lighting equipment. It has partnered with NABARD (National Bank for Agriculture and Rural Development) and RRBs (Regional Rural Banks) to provide rural households and communities 40% subsidy on purchase and installation of solar power generating equipment. The buyer would just be required to pay the balance 60% in easy installments spread over a number of years.
Solar power is no longer just a government driven initiative aimed at public welfare. The private sector has already plunged into the rural solar electrification market and is coming up with many innovative and attractive offers to get a pie of this huge market. Tata Power Solar, a leading solar power company in India, has partnered with Bajaj Finserve to offer interest-free loans to rural purchasers of Tata solar equipment. However, this market is not going to be all that easy to tap despite the strong fundamentals supporting it.
Unlike the urbanized middle classes who have easier access to information as well as capital, the rural poor have an obvious disadvantage when it comes to investments even on things that offer high value returns. They are not confident about a new and expensive product even if it has the potential to bring about a revolutionary change in their lives. It doesn’t mean that there is any stonewall to prevent innovative products and services from reaching the rural areas; on the contrary rural India has shown that it can leapfrog technologically once an innovative product (e.g. mobile phones, TV, computers, etc.) breaks through the barriers.
The government has rightly identified lack of capital as the main stumbling block in the way of rural households from being able to afford solar power. It has succeeded in helping achieve the goal of supplying 24 hours of power to the entire population of the state of Gujarat by looping the off-grid areas into the power supply ambit of the state. There is no reason why other parts of the country can’t achieve the same level of success that Gujarat has managed, in harnessing the power of the sun to electrify its rural hinterland.
One of the most successful solar power companies of the United States, RevoluSun, which began its operations in Hawaii and also has its headquarters there, proudly proclaims how it worked to change the perception of verticals which the private sector is rightly trying to tap. If the private sector can take advantage of the government support and subsidy and market its products and services well, rural India will lap it up hook, line and sinker, and leapfrog to 24 X 7 power supply well before the government deadline.
