Krishnan Pallassana: Social, economic, health benefits of off-grid renewables are clear

Reading time: 5 minutes
13 August 2015

Ahead of the first-ever India Off-Grid Energy Summit in New Delhi, Krishnan Pallassana, India Director, The Climate Group, outlines how the benefits of connecting renewable off-grid energy to rural communities holds a wealth of social and health benefits as well as economic opportunities.

The direct and indirect climate benefits from our flagship Bijli – Clean Energy for All project are clear. 

With a large number of people connected to clean energy during the first phase of our project, we can prove the model of replacing dirty, dangerous kerosene lamps with solar powered LED lamps and micro electricity grids make good climate sense. In fact it would save at least 8,759 tons of CO2 per year!

A transition to efficient off-grid lighting in the whole of South Asia would have an equally significant benefit for the more than 500 million consumers in the region who do not have access to grid.

Replacing all the kerosene, candles and battery-powered torches with solar LED lanterns alone would save US$5.6-7.6 billion in fuel costs and avoid 23.3 million tons of CO2 emissions each year.

But beyond energy savings, there are many other positive impacts from our Bijli project – some of which I have come across first-hand during my visits to project sites in the three states in India we operate in (Maharashtra, Uttar Pradesh and West Bengal).

Micro economic impact

First of all, let’s talk money. We know approximately 360 million people in India lack adequate access to grid-electricity and another 20 million households receive less than four hours of electricity per day.

To help close this gap, the Government of India has set a target of generating 100 gigawatts of renewable energy by 2022. But while grid connectivity is expected to improve over the next 10 years, at the current rate of grid expansion, urbanization and population growth, 70-75 million households will still lack access to grid electricity by 2024.

Yet this unmet demand for electricity presents a huge opportunity for off-grid renewable energy solutions, in particular solar home systems (SHS), and decentralized renewable energy (DRE) systems.

From a report on the business case for off-grid energy in India that we produced in partnership with Goldman Sachs Center for Environmental Markets we learn the following. The market size of the DRE sector will be US$150 million by 2018 largely driven by B2B revenues, and we conservatively estimate the market size for SHSs to grow 60% per year to reach a market size of US$200-250 million by 2018.

With financing support, we estimate 7.2 million under-electrified households will be able to afford a solar home system by 2018.

DRE companies are exploring new types of technology to increase operational efficiency. For commercial viability, it is crucial that DRE enterprises have substantial cash flows that can recover high upfront installation costs.

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Along with governmental policy focus, there is a clear need for greater private sector involvement in renewables in the off-grid space - and investment is already growing.

But what does this mean for the users? Well, having a solar powered micro-grid in their village saves them money. Spending less on kerosene for lighting, or car batteries to power their homes, and traveling to town to rent batteries for example, saves time and money.

On top of this, grassroots off-grid energy entrepreneurs earn about INR 1,609-5,000 per month for managing the SHS, while the operators – at least 15% of which are women – earn about INR 1,500-3,500 by renting out the lanterns. This is a significant income generating activity, as we have found in Nandurbar district of Maharashtra, where most of the households currently earn about INR 2,000-3,000 per month from traditional vocations.

People who do not work directly in the off-grid sector, also benefit through indirect employment opportunities. This is because cheaper, more reliable solar lighting means an increase in evening working hours for small businesses such as hotels, medicine shops, oil mills, rice and flakes husking, mobile phone shops and hardware shops for example.

An added bonus is that due to growing use of solar energy based appliances, technical services emerge locally.

Time for work and study

The Bijli program has highlighted multiple benefits of having clean energy at home. Exchanging dirty and dangerous kerosene lighting for solar-powered LED lamps saves time, for instance.

By cutting down travel time spent in procuring alternative fuels or services such as kerosene, battery recharging service, mobile phone recharging services and battery cells, in Maharashtra for example, on average 48 minutes and up to four hours were saved every month.

This means time and travel saved for other activities, such as study and work. The impact on study hours was significant, with 1-2 extra hours every day reported. With more lighting availability, students highlighted the convenience of studying at a chosen time as an additional benefit. And other users reported up to 60% increased leisure time.

Women and safety 

In terms of safety, more light means the community is able to spot harmful insects and reptiles in the woods, and that women and children are safer than when they are walking alone in the dark.

Another important conclusion was that the Bijli initiative has also been a catalyst in removing the social and cultural discrimination associated with women. For example solar lamps provide entrepreneurial opportunities to women by training them on assembling and marketing the solar lanterns, through which they earn a profit of INR 250-300 per lantern.

Bagnan Gramin Mahila Sammelan (BGMS), a women’s self-help group in Howrah, has been working with local Bijli partner SwitchON for distribution of hand-held lanterns. The BGMS is a women operated micro-credit institution with 27,000 members and a turnover of US$1 million.

The Climate Group’s partnering with such institutions will positively impact women’s empowerment in the region by generating additional income generating activities.

Healthier lives

Health is also improving thanks to our Bijli work. Air pollution emitted from kerosene lamps can harm children’s visionary and air-quality related health (Furukawa, 2012). With cleaner solar energy, there will be cleaner breathing and no irritation to eyes due to black smoke.

Also, burn wounds from falling kerosene lamps will belong to the past, when solar powered LED lamps are used.

All of these advantages are connected to bringing cheap, clean solar powered electricity to these rural villages in India.

But while the positive impact of clean energy access on lives and livelihoods of rural households have been emphasized time and again, there are still challenges that need to be addressed to ensure the decentralized renewable energy market grows and thrives to bring about a socio-economic transformation.

There is a dire need to strengthen and develop an ecosystem for the DRE enterprises to grow.

Such an integrated eco-system will have a clear policy framework particularly around:

  • grid connectivity and parity;
  • access to affordable debt financing and incentives for the entrepreneurs to consolidate their businesses;
  • and streamlining of quality standards across board.

A conducive ecosystem will help practitioners to consolidate, enhance market size and assure stability, which in turn, will help to reduce perceived risks. It is clear that the current off grid systems will evolve into a grid-ready decentralized systems, complementing national energy programs to assure universal access.

But our work is by no means over.

Right now, we are working toward facilitating creation of an affordable debt financing instrument in India. The Bijli Catalytic Fund will to enable flexible and catalytic financing for the decentralized renewable energy sector in India.

We also intend to learn from our lessons and propose a large scale, grid ready decentralized clean energy system to unleash the productive potential of rural India, thereby directly contributing to an equitable economic growth path.

Together, let us bring Bijli to the 1.2 billion people on this planet with no access to electricity.


You can follow the conversation online in the lead up to and during the summit on hashtag #OffGridSummit.

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