As we reported in our spring issue, SERC is part of an international team assessing opportunities to use solar power for rural electrification in India. Providing solar power via a central PV array and a village distribution system, or mini-grid, can be more cost-effective and durable than providing independent solar electric systems for each household.
This approach is already being used widely in rural India, but in most cases implemented by government agencies that provide heavy subsidies. Recent financial turmoil and growing public sector deficits in India demonstrate that these subsidies are not sustainable for the long term. Our team’s client, Indian company Azure Power, is interested in learning whether a for-profit firm can provide mini-grid service at a price that even lower income villagers can afford. Financial assistance for the study comes from the U.S. Trade and Development Agency.
We have now completed nearly all of our work on the three tasks we led: a literature survey of similar projects in other developing countries; an assessment of how Indian energy policy and regulations might affect such projects; and field studies to estimate energy demand and willingness to pay for electricity in candidate villages Azure Power has selected.
SERC staff including Tom Quetchenbach and Meg Harper made important contributions to the first two tasks. For the third task, I traveled to India for two weeks in June, accompanied by the project lead, Priya Sreedharan, from the San Francisco energy consulting firm Energy and Environmental Economics (E3) and former HSU graduate student/SERC student assistant Brendon Mendonça. In New Delhi, we met up with principals and staff of India-based consultant Varesh Energy, completing our field team. After a meeting with Azure Power staff, the team headed out to the two field sites in Eastern and Northern India.
After orienting ourselves and meeting with village leaders, we set to work conducting house-by-house surveys and holding focus group meetings. We collected demographic data, inquired about people’s expectations and desires for household electrification, and asked the villagers to respond to hypothetical electrification scenarios and associated costs. The two villages we focused on are not “greenfield” sites without previous electrification experience. One of them had previously been electrified with a mini-grid that was later removed, while the other village has partial grid electrification. The desire for electricity and willingness to pay were encouraging in both cases although the details and conditions varied between the villages. These field findings will be integrated into the engineering and economic analysis that remains to be conducted in the project to thoroughly assess the feasibility of solar minigrids for these two sites.
We have delivered our task completion reports to Azure Power, and they have responded with special enthusiasm to the field study, calling it “useful, thorough, well-done, and enjoyable.” In the coming months, SERC will continue to provide support to other project partners as they complete the remaining tasks on this important feasibility study. Upon completion of the entire project, the USTDA will make the main findings of this field study and the overall feasibility project accessible to the public through a publicly available report.