India one of top lucrative destinations for off-grid renewables investment

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20 February 2015

NEW DELHI: A critical report offering off-grid renewable energy solutions for India was launched at an energy and business event in New Delhi this week, where prominent business, government and civil society leaders agreed India is one of the smartest destinations to invest in off-grid renewable energy, owing to fast-growing sectors. 

Published by The Climate Group in partnership with Goldman Sachs Center for Environmental Markets, the report, The business case for off-grid energy in India, aims to identify the most promising and innovative business models to invest in, and was unveiled at the RE-INVEST summit by Dr. Jaco Cilliers, Country Director, UNDP India, Uday Khemka, Vice Chairman, Sun Group and Rohit Kansal, Divisional Commissioner Kashmir.

During the launch, emphasis was laid on how off-grid energy must play a pivotal role in India’s wider transition to a sustainable energy future. As one of the largest energy consumers in the world, the study shows that India can achieve the energy revolution it's aiming for if the private sector boosts investment in decentralized renewable energy and solar home systems, a move which the speakers agreed "can be done so affordably”.

Parimita Mohanty, Director of Strategic Initiatives, The Climate Group, reiterated the attendees when she said: “India stands today as one of the most potentially lucrative destinations for investment in the renewable energy sector, and estimations say the market size of decentralized renewable energy (DRE) alone will be at least US$350-400 million by 2018. What the DRE sector needs at this moment is commercially viable, institutionally replicable and environmentally sustainable business models.”

The report highlights that nearly 50% of India’s rural population, 80 million households, has little or no access to grid-based electricity and instead, relies on dangerous kerosene as its primary source of lighting.

Authors point out that this energy demand gap can be filled with DRE businesses, which serve close to 100,000 households today. That number is set to grow rapidly at 60-70% annually to 900,000 by 2018. Overall, the study estimates the market size of the DRE segment will be at least US$50 million by 2018, largely driven by business-to-business revenues.

Growing awareness, falling price points and greater access to finance are making off-grid energy solutions, including DRE, but also solar lanterns and solar home systems, increasingly attractive to consumers.

Read The business case for off-grid energy in India

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