Even 65 years after Independence, more than a million families in India live in darkness after sunset. Neither the electricity grid reaches them nor do they have the money to invest in alternative sources of energy. A much larger section of the population, nearly half the rural India, connected to the grid suffers from erratic supply. They depend on kerosene to address their power needs. But kerosene is heavily subsidised and there are huge leakages in the system.
To eliminate the dependency on kerosene, over a decade ago the governmentÔÇêstarted a programme to offer off-grid solutions at subsidised prices. Under the Remote Village Electrification Programme (RVEP), the Ministry of New and Renewable Energy (MNRE) offers a solar home lighting system (SHS).
It is a simple kit consisting of one or two CFLs, a solar panel, a battery and a solar charge regulator. For many, SHS was godsend. It saved them the expenditure on kerosene to get four-five hours of electricity a day. The programme has by now covered nearly 9,000 villages against a target of 18,000 and encountered a number of problems. The biggest is poor aftersale service, followed by malfunctioning batteries and CFLs. The Centre cannot monitor everything, defends the ministry. “We rely on state renewable energy agencies to ensure proper functioning of the programme,” says Gireesh Pradhan, secretary of MNRE.
The solar initiative is not restricted to the government. NGOs and private institutions are also offering expensive lighting options and financial help. For instance, Aryavart Grameen bank in Uttar Pradesh has provided loans for home lights to 50,000 families; the Exhibition Road in Patna is touted as the world’s largest market for solar equipment; and SELCO (Solar Electric Lighting Company) in Karnataka is the energy solutions provider for 135,000 rural families.
The entry of non-government players signifies scope for growth in the off-grid solar sector. At a price tag ranging from Rs 8,000 to Rs 13,500, SHS sounds expensive, but this is just one-time investment. A family using kerosene lamps spends Rs 250 every month, whereas an SHS lasts at least 10 years. This means even an expensive system costs a little more than Rs 100 a month.
Such models offer hope for the country’s power woes but are limited in their reach, while RVEP is seen only as a stop-gap arrangement till the grid reaches remote areas. It does not have to be so; mini-grid solar can show the light. This is the opportunity for the future.
The Remote Village Electrification Programme (RVEP)ÔÇêunder the Ministry of New and Renewable Energy (MNRE) is an elaborately designed mechanism to reach the powerless that involves a number of steps, from identifying remote villages to providing off-grid solutions. Ninety-five per cent of the solutions offered under the programme are solar appliances.
RVEP has a built-in system of monitoring on the ground, yet it is far from being successful. To find out why, the Centre for Science and Environment (CSE) visited Uttarakhand, Chhattisgarh and Assam. Ground reports from the three key states are a mix of good and bad news. First the good news: people prefer solar home lighting systems (SHSs) over unreliable grid-based electricity. What is also evident is that the current format of RVEP limits its outreach and usage. People want systems that are capable of meeting their growing needs. The bad news is SHSs—a unit comprises one or two CFLs, a solar panel, a battery and a charge regulator—suffer from technical faults and poor maintenance services. Another pesky point is that the system of distributing SHSs is riddled with corruption.
It remains unclear whether the government is capable of starting a system to distribute energy to each household that will actually work. Chhattisgarh gives a ray of hope. It has a mini-grid system that provides solar energy to households on payment. The 2012-13 draft revision of RVEP learns from this experience (see ‘Draft guidelines for Remote Village Electrification Programme’ on p24). Will it go far enough?
Uttarakhand
The solar home lighting system (SHS) is lying unused in the house of Shiv Charan Singh of Baunth in Tehri district. Under RVEP, the Uttarakhand Renewable Energy Development Agency (UREDA) distributed fully subsidised 70 SHSs in Baunth in 2004. Before this, he used to spend Rs 300 a month on kerosene to fuflfil his lighting needs. “In 2008, the battery of my SHS stopped working,” says Singh, who had to go back to kerosene. The battery comes with a two-year warranty and has a life span of five years. At present, 40 per cent of SHSs in Baunth are not working. Singh complained to the village pradhan but in vain. “When I contacted UREDA about the battery problem, I was told that the money kept aside to replace batteries was not enough,” says Pushkar Singh, the pradhan.
The beneficiary of an SHS has to pay for the battery replacement in advance. Generally, the pradhan collects 50 per cent of the battery cost (Rs 2,000) from each beneficiary. This money is given to the state implementing agency as fixed deposit in the name of the user. “We take the rest half at the time of replacement. This shields the beneficiary from paying the huge amount at one go,” said C P Agrawal, chief project officer, UREDA. In Baunth, a fixed deposit of Rs 91,000 was made in 2004. “After eight years, the maturity amount was Rs 1,40,000. We need Rs 2,55,000 to replace all the batteries,” says Manoj Kumar, project officer of UREDA in Tehri. People do not have money to spare for battery, says Pushkar. In 2010, the grid reached Baunth, but erratic power supply has pushed people to use kerosene.
Residents say a combination of grid power and SHS with improved servicing is the solution. Bung Bung and Galaghat villages in Pithoragarh district highlight more problems in the programme. Since the grid has not yet reached the villages, people are using SHSs they received in 2010. But the systems are not performing well. CFLs in the house of Urmila Devi in Galaghat stopped working within six months. These lamps come with a one-year warranty but people are not aware of this. “I spent Rs 100 on a new CFL,” says Devi.
Residents are also clueless about the existence of people trained to maintain SHSs. UREDA says it has trained 128 people as technicians but CSE found no technicians on job. In most of the villages CSE visited people did not know that the money they had given before getting an SHS was for battery replacement.
Changing times
Before RVEP was implemented in Uttarakhand in 2003-04, an NGO in Tripuradevi, Pithoragarh district, had started a programme to popularise solar solutions in the Kumaon region of the state. From 1998 to 2002, Avani provided SHSs to 2,500 families in 254 villages with funds from the European Union. Under the programme, the beneficiary had to make an advance payment of Rs 2,000 which was a part of the corpus to be used for replacing batteries. Avani also trained village youth as technicians and paid them a monthly salary of Rs 2,500.
After the funding stopped, the programme started facing problems in providing maintenance services. The NGO is now trying to reorient its approach. “We are experimenting with microfinance,” says Rajinish Jain, founder of Avani. It is starting a pilot project to sell solar lanterns manufactured in its campus. The manufacture cost of a lantern is Rs 1,600 while the market cost is Rs 2,128. A customer can buy the lantern after paying Rs 500. The rest is collected as installments of Rs 100 with Rs 8 as interest from the customer.
Chhattisgarh
Chhattisgarh is the only state that is focusing on providing community-based solar power plants under RVEP instead of individual SHSs.
When the programme started in 2003, the Chhattisgarh Renewable Energy Development Agency (CREDA) suffered a huge loss because most of the distributed solar panels were stolen or sold at higher rates. “Half of the panels got stolen within a year. Some beneficiaries sold them or mortgaged them,” says S K Shukla, director of CREDA. A survey conducted by CREDA in 2004 showed that of the 617 solar modules installed in tribal hostels, ashrams and primary health centres, 500 were stolen. This is when CREDA opted for micro-grids. As of May this year, 1,439 remote villages have been electrified through micro-grids.
In village Kaya Bara, a 3 kW plant has been installed that generates 24 units of electricity a day. It provides electricity to 45 households for eight hours a day (see ‘Hope flickers’, Down To Earth, April 16-30, 2011).
The micro-grid capacity in the state adds 3,500 kW of power, serving 58,000 families. The grids feed 9,500 streetlights in Chhattisgarh’s remote villages. Rest of the villages and hamlets, where houses are scattered, have been given SHSs. “In scattered areas it is not feasible to invest in wiring,” says Shukla.
One of the reasons behind the success of this unique model is the state’s commitment to good aftersale service.
CREDA employs a three-tier system to provide maintenance: an operator is chosen from each village to clean solar modules every day and repair them. He charges Rs 5 a month from each house. For regular maintenance of batteries and for fixing technical problems, CREDA enrolls an operations and maintenance contractor who, in turn, appoints a technician for every 15 villages. The technician gets a monthly salary of Rs 25 per household from the state. This is equivalent to the subsidy the Chhattisgarh government provides to BPL families in grid-connected areas for availing a unit of electricity a day.
“The technician files a monitoring report on monthly basis for every installation of an SHS,” says Shashi Dwivedi, an operation and maintenance contractor.
Another reason for the success of RVEP in Chhattisgarh is that CREDA is the only agency in the country which is financially supported by the state for providing salaries to technicians, besides training village youth for maintenance of SHSs.
In April 2011, the National Council of Applied Economic Research evaluated the performance of community-based solar power plants in Chhattisgarh, Madhya Pradesh and Odisha. It found that Chhattisgarh had the least battery problems and most number of working systems.
Assam
This state has the highest number of remote villages under RVEP. In the past seven years, Assam has utilised the maximum amount of funds under the programme (Rs 11,540 lakh as of November 2011). The three implementing agencies in the state are Assam Energy Development Agency, Assam State Electricity Board (ASEB) and the state forest department.
In the two districts that CSE visited, Sonitpur and Barpeta, people were happy to receive SHS as it eliminated their dependency on kerosene. Some have fixed their SHSs with mobile chargers, so they do not have to travel to a nearby town, 10 km away, just for charging. Some people are glad they can carry lighting systems when they shift houses due to inundation.
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The solar panels are 20 W instead of the required 37 W. “Initially, we used to monitor the quality but later we were asked to work fast. Now we just report physical presence and functionality,” he adds. According to him, the forest department is the worst offender. “The department and suppliers siphon SHSs between themselves. Local third party monitors are threatened and not even allowed to enter villages for inspection.”
In Kakla Bari village in Barpeta many sanctioned SHSs are missing. The village was connected to the grid in 2010. Surprisingly, it was taken under RVEP a year later which is not allowed under the programme. Although there were only 12 households in the village, it was given 94 systems.
When CSE visited the village only four SHSs were found. Bisti Ram Giyari, president of the village electrification committee, refused to share the beneficiaries’ list. He, however, complained against the performance of SHSs. “About 45 systems are malfunctioning and the charge does not last for more than two hours,” says Ram. CSE found 10 batteries stacked in his house. Residents say rest of the systems were sold to nearby villages for Rs 3,500 to Rs 8,500 a piece. The stated beneficiary contribution is Rs 517 per household.
Bihar
Besides Punjab, Bihar is the only state that has not been sanctioned any SHS under RVEP. According to MNRE, there are only 80 remote villages in Bihar, making it a low-priority state.
Still, Bihar is the third largest user of solar applications. And a visit to the Exhibition Road in Patna reflects this. Touted as the world’s biggest solar wholesale market, the one-kilometre stretch hosts rows of shops offering products ranging from solar lanterns, street lights to solar panels of various capacities. The market is flooded with brands like Tata BP, Reliance and the lesser known ones TBP and Surana Ventures. It offers imitations of the more prestigious brands at cheap prices. For instance, a 75 W solar panel that Tata BP sells for Rs 6,500 is available at the Exhibition Road for Rs 2,400 under the brand name TBP without a warranty. These imitations are of substandard quality, with under-wattage and might last a year or two. “Panels from TBP are the cheapest and sell the most,” says Bachchu Singh, retailer at Jandaha.
Fifty per cent of the state’s solar market is captured by those who make inferior equipment. Tata BP’s monopoly over the solar market has dropped by almost 70 per cent in the past five years, says Piyush Agrawal of Krishna Solar House on Exhibition Road. People prefer substandard equipments because they are affordable (see ‘Out of options’, Down To Earth, August 16-31, 2012).
Before the solar market started flourishing, most basic lighting requirements were fulfilled by diesel generators. “It was expensive,” says Saroj Kumar, a daily wager from Jagdeeshpur village in Vaishali district who used to spend Rs 100 a month on diesel to illuminate a 10 W CFL for four hours and to charge his cell phone. He has now bought a low-quality solar panel worth Rs 3,500 and an Exide battery for Rs 3,000. “I have no option but to buy substandard panels because they are cheap. I do not know if it will last long,” he says.
Some residents have innovated energy solutions by imitating the diesel generator method. Jagdeep Kumar saved for two years and borrowed some money from friends and relatives to buy six 80 W solar panels from Tata BP, each costing Rs 10,000. He also bought six 75 W batteries (Rs 5,000 each). Kumar has installed the equipment at his house. He supplies electricity to 50 households for four hours every day in the evening and collects Rs 75 monthly for an 8 W CFL bulb from each household. This equals to Rs 78 per unit of electricity, the highest in the country compared to the average Rs 3.
Besides the government, many entrepreneurs are delivering electricity to the remotest villages in the country. They sell solar home lighting systems (SHSs)—a package of LEDs or CFLs, a solar panel, a battery and a charge regulator, and other solar lighting equipments. People do not mind paying the high price (through micro- financing) since they get constant power supply. But just like the remote village electrification (RVEP), most of these micro models suffer from poor aftersales service.
Check on time
In Uttar Pradesh, a venture between Aryavart Gramin Bank and Tata BP targets the rural poor, offering SHSs (worth Rs 13,650 each) and financial assistance. The bank provides a loan for up to 95 per cent of the system cost at an interest of 12.5 per cent, while the rest is collected from the user as down payment. The loan can be repaid through monthly or half-yearly installments within five to seven years. On its part, Tata BP provides an extended warranty up to 10 years on solar panels and five-year warranty on batteries. “For proper installation and maintenance, we have partnered with a local dealer,” says S M Jafar, regional manager of Tata BP. Solar Power Systems (SPS) is a Lucknow-based dealer of Tata BP and has trained business facilitators in areas where SHSs have been delivered to look after their maintenance. “We pay the facilitators a monthly salary of Rs 3,000 and the beneficiary pays them service charges when the system is out of warranty,” says Manoj Gupta, manager of SPS.
The ground reality differs. In Barabanki and Hardoi districts, many customers complain the company’s aftersales service is inefficient. Consequently, they have stopped paying their dues. Shrinand Lal of Madeenpur village in Barabanki had bought an SHS in 2008. “In two years, the solar panel shrunk in size,” says Kamlesh Rani, Lal’s wife. “Earlier, technicians used to come for repairs but for the past two years nobody has visited us,” says Rani. Jafar says there is no warranty on breakage of systems. “It is on the performance,” he adds. Lal now spends Rs 280 a month on kerosene lamp. The family of seven has not complained to the bank since it has not paid the installments.
A major technical complaint among the customers is the battery. Each battery has a reserve point, which should be used only in case of emergency. When this reserve charge finishes, the battery enters into “deep discharge” mode. Sarita Singh of Madeenpur started having problems with her battery soon after she bought an SHS from Tata BP. “Only one CFL works and that too for two hours,” she says. Tata BP says overloading results in battery problems. “A 37 W SHS has been designed for lighting around five hours a day. Despite repeatedly telling customers not to run TV and fans together for long hours, they continue to do so,” says Jafar. “There is a charge controller that cuts off power when the battery is about to go into reserve mode. The beneficiary does not understand this and removes the charge controller and directly connects the wires of the panel with the battery. This puts pressure on the battery. The charge finishes completely and the battery goes into deep discharge mode,” he explains. The only solution in such cases is to leave the system untouched for two to three days to allow it to get fully charged, he adds.
In some of the houses that Centre for Science and Environment (CSE) visited, the panels were found to be directly connected to the batteries. The affected people say when nobody attended to their systems, they had to apply their own minds. “What is the use of a warranty if the battery does not charge properly? When nobody is listening to us, what do we do?” asks Ramkumar Singh. His family has been using kerosene oil for lighting for a year despite having an SHS. Like Lal and Singh, Ramkumar has not paid his monthly installments for a long time.
Non-payment of dues is a major problem across Aryavart-Tata BP operational area. The bank’s branch at Kursi in Barabanki covers 14 villages. The branch has provided 1,000 SHSs. Of these, only 300 beneficiaries have paid all their installments. “Non-payment of installments is our biggest challenge. On an average, there are 20 per cent defaulters,” complains Anwer Husain, chief manager (finance), Aryavart Gramin Bank. In Gondwa village in Hardoi, the number of defaulters is 60 per cent. “We are planning a mechanism where we will train and pay persons in the village to motivate people to regularise their installments,” adds Husain.
Custom-made
There are some models that customise products depending on the purchasing power of the household, and offer efficient aftersales services. Bengaluru-based SELCO (Solar Electric Lighting Company) has provided SHSs to 135,000 households across the state. The customer pays a down payment of 10 to 15 per cent of the total cost, while the rest is collected through monthly installments for a maximum period of five years at an interest of 12 per cent. The transactions are done with the help of tie-ups with microfinance institutions and regional rural banks. This helps achieve financial inclusion for users who do not have bank accounts. When it comes to maintenance of SHSs, service for the first year is free of cost. During this period, the technician makes two visits at the end of the six months. After the one-year period ends, the customer can extend the technician’s contract at Rs 250 annually.
The grid reached Kayarthaduka village in Dakshina Kannada district more than 15 years ago but many still depend on SHS. “I have not faced any problem with my system,” says a resident who received her SHS four years ago. All components of the system are under warranty. The battery has a three-year warranty, solar panels eight years and CFLs come with a one-year guarantee.
SELCO has also designed packages of solar products at a household level. Raja Acharya owns a shop on the road leading to Kayarthaduka village. His SHS has three LEDs, one CFL and a battery. He uses the LEDs in his house and CFL in his shop. All this is managed using a 25 W Tata BP panel. The entire system cost him Rs 16,500, of which he paid Rs 1,500 as down payment. For the rest, he pays monthly installments of Rs 330 which will continue for five years. “I purchased the system in 2004. I had to replace the CFL during the first year. Since it was under warranty, the company replaced it for free. I am yet to replace the battery although its capacity has deteriorated over the years. I have reduced the use of the lights owing to the battery’s failing performance,” says Acharya. He has not renewed the maintenance contract.
Not every household, however, can afford the systems even after bringing down the cost and providing soft loans. “There are instances when we have subsidised the prices for the user,” says Harish Hande, co-founder of SELCO. In cases where the user was unable to make the down payment, SELCO waived it off with aid from the Renewable Energy and Energy Efficiency Partnership, an Austrian non-profit that acts as a market catalyst for deploying renewable energy technology.
Remote areas of the country will have to wait longer for the grid to reach them. In such times, the “mobile phone” solution seems luring. The mobile phone technology beat the expensive and cumbersome technologies in reaching the poor and remote areas across the world. The world can similarly bypass the transmission grid and go straight to the heart of darkness.
The current situation gives an opportunity to offer the unconnected, clean and futuristic energy source instead of the polluting, fossil fuel-driven grid. This will solve two problems: energy poverty and climate change. It is, however, unclear how this path to the future will be paved. All the current experiments on providing clean energy through an off-grid-based model have remained experiments. Wherever the state has tried to upscale its reach, it could not emulate civil society groups which have individually crafted their services to suit the poor. What makes this difficult is that clean energy is still expensive and people who need it still poor. The models demand some form of credit—loans or subsidy.
All this works only when the operation is on a small-scale. Thirdly, the experiments that are successful are built on limited opportunity—the lantern or the solar home lighting system with two CFLs. This works when people are poor. It does not meet the needs of those who want to grow. The most debilitating but telling statement comes from a government functionary who says people should not demand energy for their television. The solar panels supplied are only for meeting basic needs—light and fan. The government sees solar energy as a temporary solution. As a result, it becomes blacklisted and condemned in people’s view who think solar is only for the poor. And they turn to a dirty source and a dirty future. How do we upscale the distributed energy systems to make them the real option in the real world?
After a year-long research in Uttar Pradesh, Chhattisgarh, Uttarakhand, Bihar, Assam and Karnataka, the Centre for Science and Environment (CSE) team is convinced that unless the distributed energy systems provide the same level of services as a fully functional grid, off-grid solar will remain a transitory solution. There is a model that can be the answer to the country’s power needs but it needs improvements. The solar mini-grid project implemented by the Chhattisgarh government is the most successful in terms of quality of service as well as performance. The model, however, is designed as an isolated grid with the remote village electrification programme. The state provides a 100 per cent capital subsidy, with users paying a small fee to meet a part of the operation and maintenance cost. The model is not financially sustainable. What if this model is made grid-interactive and financially viable?
CSE’s proposal is simple: the government needs to incentivise mini-grids with the same financial model as that of the grid-connected solar power plants. It should propose a programme that allows entrepreneurs to set up mini-grids. These mini-grid projects should be provided with an assured feed-in-tariff. The tariff should be divided into two parts: one paid by the consumer and the other funded by other mechanisms like green cess on consumers (as happens in Chhattisgarh and Gujarat), or from the National Clean Energy Fund, or through an international funding mechanism (like the Green Climate Fund). If Rs 15 is the cost of supplying a unit of electricity, then serving all the households in rural India for six hours a day will cost Rs 30,000 crore annually. If each beneficiary household is monthly charged Rs 100, the annual collection will be Rs 17,000 crore. The remaining Rs 13,000 crore can come by imposing a cess of 20 paise/kWh on all the electricity consumed in the country.
These mini-grids will meet the local needs and when the grid reaches the villages they could be made grid-interactive. That is, it can export power to the grid and import from it. This will create jobs and help build the local economy.
If the above concept is operationalised, it will revolutionise the way power is produced and consumed in India. This will be the beginning of a true renewable energy revolution.
With inputs from Ruhi Kandhari