More than one billion people remain without electricity today, many of them in remote rural communities. Research on off-grid solar power in rural India suggests it may hold the solutio

Urpelainen, Johannes

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21/06/2017 How solar power could transform rural India - IGChttp://www.theigc.org/blog/how-solar-power-could-transform-rural-india/ 1/2Authors JohannesUrpelainenAssistant ProfessorColumbia UniversityPublished on: 9 Jan 2015Countries: India - Bihar, India - CentralResearch themes: Energy How solar power could transformrural IndiaMore than one billion people remain without electricitytoday, many of them in remote rural communities. Researchon off-grid solar power in rural India suggests it may holdthe solutionIn the past five years, off-grid solar power as a strategy of ruralelectrification has become a popular idea — and for a goodreason. More than one billion people remain without electricitytoday, many of them in remote rural communities far from thenational electric grid. At the same time, the rapid decrease inthe price of solar panels has created new opportunities forcommercial off-grid electrification.While off-grid solar power is far from replacing grid extensionas the main mode of rural electrification, it can no longer bedismissed as a trivial strategy. In Bangladesh, for example, morethan three million solar home systems have been installed forresidential use. Companies such as OMC Power in Indiaand Off-Grid: Electric in Tanzania have secured majorcommercial investments into their businesses.What are these companies delivering?As a first step to answering this question, I and mycollaborators (Aklin, Bayer, Harish) conducted a survey of therural customers of Mera Gao Power(MGP) in the Barabankidistrict of the state of Uttar Pradesh, India.MGP is a company that provides villagers with two bright LEDlights and a mobile charger in exchange for a monthly paymentof 100 rupees. In a randomized controlled trial funded bythe International Growth Centre and SPEED India, we evaluatethe demand for MGP service and its socio-economic effects. Thecustomer survey is an initial effort to understand what MGP isachieving through its work.The most important observations about the consumerexperience can be summarized as follows:By far the most common reason for subscription was theimproved quality of lighting. In contrast, mobile charging andfuel expenditures were much less importantThe most common use of MGP lights was outdoor lighting. In atypical household, one of the two lights was placed outside atnightOverall, households were satisfied with MGP service. The maincomplaint was the behaviour of MGP staff, suggesting thatfurther training could improve customer experience21/06/2017 How solar power could transform rural India - IGChttp://www.theigc.org/blog/how-solar-power-could-transform-rural-india/ 2/2further training could improve customer experienceWillingness to pay for additional services, such as a fan or atelevision, was lowThese ﬁndings are interesting for several reasons:First, they show that the frequently cited benefit of reducedkerosene expenditure is not a major reason for adopting solarpower. Instead, rural customers want improved lighting. This isimportant because much of the discussion on the benefits ofsolar power has focused on fuel savings. Our experience withthe MGP service suggests, instead, that the key advantage ofsolar power is simply better lighting.Second, MGP seems to have adopted the optimal servicepackage. There is little demand for additional services evenamong customers. While this result may initially appearsurprising, it is important to remember that MGP customers areamong the most deprived households in rural India. Wealthierrural households, who would be able to pay for a fan, tend tolive in already electrified habitations.A challenge for expanding MGP’s impact is demand. In villagesapproached by MGP, only one-fifth of households adoptedsolar technology. Reducing the price further either throughgovernment subsidy or less expensive technology wouldprobably help, as cost and the lack of disposable income werecommon explanations for not subscribing to the service amongthe survey respondents.Overall, however, the results from this survey are encouraging.They show that, even in the poorest villages, many householdsare willing to pay for good lighting. Companies such as MGPare providing a valuable lighting solution to replace kerosene incommunities where grid electricity is not available.We’ll be conducting plenty of additional analysis in the comingmonths — stay tuned for updates!

How solar power could transform rural India

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