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“In next 5 years, off-grid energy will be a huge market”: Experts share how they’re connecting rural communities to clean energy

05 June 2014
“In next 5 years, off-grid energy will be a huge market”: Experts share how they’re connecting rural communities to clean energy

LONDON: Experts from India and the US met to share their insights on providing clean energy access to off-grid communities in India and Africa, in our live Google Hangout. You can watch the full session below.

Amy Davidsen, US Executive Director, The Climate Group, moderated the session, first outlining our access to rural energy in India program, Bijli – Clean energy for all, which is principally funded by the Dutch Postcode Lottery and aims to reduce emissions and enhance lives by deploying renewable energy technologies and improving infrastructure quality. She set the tone by explaining: “1.2 billion people on the planet do not have access to electricity, and 300 million of those live in India. So providing clean energy to these people is one of the world's most critical development goals.”

Sharing how his company is setting out to help achieve that lofty but crucial goal, Piyush Jaju, CEO and co-founder of Onergy - which is a social enterprise providing decentralized energy solutions - said: “Initially the idea was to distribute solar lanterns to remote regions. But we realized people have their own needs and inspirations; there is no single silver bullet solution when it comes to energy access. So over the years, we have developed better micro solar products and other solutions such as solar lanterns, home systems and micro grids, as well as developed new solutions for solar-powered irrigation, storage and computers. And to support these solutions we work on the energy efficiency side too.“

Emerging economy growth

Sunfunder is a solar finance company that also works with solar businesses operating in parts of the world where people lack access to reliable electricity. Speaking from the US, Ryan Levinson, Founder and CEO, Sunfunder, outlined some of the motives for his company’s mission: “It is so important to reduce emissions, but also, 90% of new energy demand is expected to come from emerging economies. If it develops the same way existing energy infrastructure has developed in the past, it’s going to be the equivalent of adding a new US and China’s worth of greenhouse gas emissions to the global economy. So it’s all about creating new cleaner energy infrastructure in the parts of the world where energy demand is going to be increasing greatly in the next decades.”

Debajit Palit, Associate Director, TERI, talked about the various off-grid projects the non-profit policy group has implemented in India, including a commitment with Clinton Global Initiative to ‘light up’ about 2,000 villages with a combined population of 1 million within five years, which it achieved last year by installing 1 million lights across India and African countries. He was keen to state the importance of finance menchanisms in reaching such feats: “…access to finance seems to be one of the typical aspects of how you can bring energy access to this rural population, and that is why we try to have innovative finance models.”

 "90% of new energy demand is expected to come from emerging economies" - Ryan Levinson, CEO, Sunfunder

Answering Amy Davidsen's question of how the guests decide which finance models and technology products are best for such differing communities, Piyush Jaju responded: “The challenges in most places is that finance is not available. There are areas where customers do not have access to micro finance and banking networks, so we just look at promoting lanterns. In areas where there are financing options available, that’s where we promote home systems.” He explained that in other ’unbankable’ areas where clusters of people are active in the evening, such as hamlets, micro grids are best suited.

Responding to a question about the impacts of India’s policy in light of the newly elected Prime Minister Modi, Debjabit Palit said: “As far as policy development is concerned, we do have certain polices that have been helpful in promoting off-grid electric. But there are still limitations as far as promotion of off-grid in villages works.” Responding to Debjabit's claim that subsidies have worked in some instances in India, Ryan Levinson quickly stressed that in African countries he had worked with, the vast majority of loans made had not relied on subsidies. He expanded: “In India the challenge is to do with regulatory issues that make it challenging for foreign lenders to have the flexibility they need with respect to interest rates and tenors.“

Future prospects for off-grid energy

Looking to predicted progress of the off-grid energy market over the next five years, Debajit Palit from TERI said: “The market is definitely growing. […] India’s power cuts and problems will not be solved in the immediate future. So in the next five years, off-grid will be a huge market. But as I said, you have to have different markets in different parts of India - unlike in many of the African countries where markets seem to be similar across geographic regions.”

But Piyush warned that for the market to grow, there needs to be strong regulatory improvements and polices in place. He said: “In the past 20 years, the technology has been there, but that has created a lot of junk in rural areas. [..] We need to strengthen policies to promote quality products or people that can provide reliable maintenance services.”

Ryan Levinson agreed with Debajit that the next five years would also see “very very significant” growth in the off-grid market, asserting: “While the market has existed for decades and it’s true the technology has been around for a long time, I think that over the past 3-4 years a number of things happened that together point to this market at a deflection point; all the ingredients are there for it to take off. The cost of solar technology has come down radically over the last five years; products are more improved and appropriate for off-grid markets - in a way they weren’t 5-20 years ago; and we are seeing many new companies design products specifically for these markets. Most importantly, we are seeing new innovative business models that are designed to help make solar energy even more affordable for people in parts of the world where there is unreliable energy.”

He added: “We still look at this as a nascent sector, but we think in the coming years there is going to be some business models that get proven out to be very scalable and successful and you’re going to see other players begin to copy those, which is a great thing - and we expect major growth in this space.”

Watch the full Hangout 

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By Clare Saxon

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