Rural electrification is an integral component of poverty alleviation and rural growth of a nation. In India, electricity has not played an effective role in the socio-economic growth of the village. Gross Domestic Product (GDP) is increasing with 8% whereas the contribution of the agriculture sector is 1.9%. The government of India has an ambitious target of providing electricity to all villages by 2008 and all rural households by 2012. Steps are already initiated with Rural Electric Corporation, Rural Electricity Supply Technology mission, State Electricity Boards, Reforms in the Power sector. An attempt has been made in this paper to assess the features of rural electrification in India and the feasibility of Photovoltaic Solar Home Systems (PV SHS).

Enhancing the impact of off-grid Solar Power

Off-grid solar power did not produce socioeconomic benefits in our study, but there are several ways in which such benefits might be enhanced.

One is to install larger systems that produce more energy for the people. If households could use technologies such as fans or refrigerators, the opportunities for economic gain could multiply. The downside of larger systems is that they are more expensive for the consumers, and thus it is important to compare the potentially larger benefits against the potentially larger costs.

Another approach would emphasize complementary interventions. The lack of electricity is not the only obstacle to economic growth in rural India, and rural households without electricity access often have to grapple with other challenges as well, ranging from low-quality schools to limited access to credit for livelihood creation. Combining innovative off-grid solutions with other interventions could relax multiple constraints on growth at the same time, with potential for large returns.

For better off-grid lighting policy, it is important to continue experimentation and rigorous impact assessment based on randomization. Ending energy poverty is essential for sustainable human development in India and elsewhere, and success in this effort requires evidence-based policy and business models.


Policy: Material procurement laws, delays in land acquisition, lack of awareness, and the gap between creation and implementation of policies- are slowing down solar Mini-grid’s growth. India desperately needs a regulatory framework to support and aid these processes in the villages. More awareness is needed to help the people in the village understand the cost, the profit and the benefits of choosing SPV mini-grid over diesel power energy solutions. Encouraging private entities to deploy isolated Mini-grids in villages is also needed. Last but not the least, a focus on making subsidy disbursal rules more flexible is needed to encourage private developers.

Economic: The Mainstream economy is mainly focused on utility based solar installations. Therefore, lack of financing options have isolated Mini-grid developers and brought the question whether their ventures will turn profit or not. Lack of profitable off-take agreements, and debt financing facilities discourage the developers from venturing into rural solar electrification. Likewise, lack of subsidies on energy storages has made solar growth challenging.

Technological: Delays or lack of net-metering deployment ratio, lack of or no standard responses framework to system abuse, confusions in tariff collection are few of the technological issues that halt Mini-grid progress.