Following his overwhelming election victory, Narendra Modi made some first comments on what he plans to do. One of the boldest statements was his promise to provide one light bulb in every one of India’s roughly 80 million un-electrified homes by 2019, using the power of solar energy. Is that realistic?
- India already has experience with rural solar lighting to build on. But the experience also demonstrates the challenges.
- The ecosystem[i] to support off-grid solar lighting energy in the country will have to be strengthened for the success of this mega-initiative
- Off-grid lighting providers and LED manufacturers will likely be showered with subsidies to meet this target. However, in the past, subsidies have often been ineffective or even counter productive.
This may be it. For the nearly 400 million people living in the country without access to electricity, there may actually be a light at the end of what has been a long tunnel. However, the task will not be easy and successive governments have tried their hand through various schemes and yojanas to fulfill the promise of electricity for all.
In the 1970’s my own grandfather paid to have the electricity poles extended a little further to reach our house in a village in the middle of the sand dunes in western Rajasthan. Unfortunately he never lived to see the day when the grid actually carried electricity to our home. That happened just a few years back. Electrification remains elusive for many families in the area, many of whom have turned to solar home lighting systems to meet their basic needs.
With this latest promise by the incoming government, the market opportunity (see my previous blog) for decentralized solar lighting technologies in the country has become very real. If indeed solar LED lighting is to be brought to every un-electrified home, then we must look to what types of companies and models can make this proposal a reality and sustain it. To make the case, I examine the case of a (unnamed) pioneering company that began deploying LED-based solar lighting systems in the country back in 2005.
At the time, there was hardly a domestic market for LED lights, much less the domestic manufacturing capability that we see today. Coupling solar energy with LED technology increased the functional capacity[ii] of the product, maximizing efficiency. In one particular village in northern Rajasthan, the company deployed solar lighting free of cost on an experimental basis. It also chose to do so without any maintenance and after-sales support. Two years later, when I visited the village, not one of the bulbs distributed had all of their 36 diodes working. In fact, more than half of the homes surveyed, revealed that in the solar home systems they owned, at least one of the diodes had malfunctioned. At the same time, some families were still using the systems, even if they only had one functional diode left. There is simply no alternative. Ultimately, when the light bulbs break down entirely, these families will go back to having no electric lighting.
In this particular case, the company failed to think about creating the ecosystem of support that is needed to sustain off-grid energy projects in a genuine way. This is not an exceptional case. A number of companies and distributors today simply do not care enough about making their solutions last.
Modi’s announcement is a step in the right direction. However, it risks creating a bubble along the scale of the micro-credit scandal that rocked the industry back in 2010. It could turn into a scramble for who can sell the most solar lightings. Initial sales can be increased with clever marketing. If the bubble bursts, however, not only will investors be disappointed, but the poor will again be left in the dark. The policy will have to avoid wasting tax money on schemes that will foster companies and distributors who are exploitative and do not share the development agenda that Modi has inspired.
In order to better understand the characteristics of this market, I am conducting a market analysis of off-grid lighting providers in this country. The first step entails creating a comprehensive sales database of solar lighting products distributed into the market over time. This will help shed light on the historical rate of growth of this sector in the Indian BoP market as well as factors that may affect that growth.
If you are an off-grid solar lighting provider (company, NGO, financial institution, etc.), please consider partaking in this voluntary and confidential study to ensure it is robust and comprehensive. To participate, please fill out this brief survey.
[i] The ecosystem includes appropriate supply chains, a system for maintenance and after sales support, adequate financing, standardization of technology to ensure quality control, and the supportive government policies.
[ii] Here functional capacity refers to the number of hours the system can be used. Due to a more efficient bulb being paired with the same capacity battery, the hours of use are increased.
Kartikeya Singh is a Ph.D. candidate at the Fletcher School of Law & Diplomacy at Tufts University (Boston, USA). Currently a visiting fellow at the Shakti Sustainable Energy Foundation in New Delhi, Kartikeya is focusing his research on energy access innovation and diffusion.