India stands at a critical juncture in its pursuit of sustainable development, grappling with the dual challenges of rapid economic growth and decarbonization. This research paper delves into the potential of leveraging Decentralized Renewable Energy (DRE) to address India's electrification challenges, particularly in rural areas, while aligning with the nation's ambitious goals for achieving net-zero emissions by 2070. The paper explores the existing challenges in electrifying rural regions, the socioeconomic disparities hindering progress, and the environmental risks posed by climate change. Additionally, it investigates the unique challenge India faces in decarbonization amid rapid economic growth and outlines the country's commitments to renewable energy targets. The research highlights the need for innovative solutions and examines how DRE could serve as a sustainable and economically viable alternative to traditional grid expansion, contributing to both electrification and decarbonization goals.

 

Challenge of Electrification in India

 

India is the most populous country in the world, with 1.4 billion people, 65% of whom live in rural areas of the country. In the last few decades, India has seen significant economic growth across sectors (agriculture, industry, and services), in a steadily growing GDP, increase in labor productivity at an annual rate of 6.7% during the 2005-2013 period, and other measures such as increasing average lifespan and higher education. However, one of the challenges India has faced is the growing disparity in wealth highlighted in a recent report by Oxfam - with 40% of the wealth created in the country from 2012-2021 going to 1% of the population while only 3% trickled down to the bottom 50%. One of the ways this large disparity gap manifests itself is in access to electricity. Urban India is almost 100% electrified while rural India has struggled to close the electrification gap for many years. Below graph shows findings from the India Residential Energy Survey (IRES) conducted in 2020, highlighting that there remains 2.4% of households that are unelectrified, most of which are concentrated in rural India. 

 

 

Household electrification has been a focus of the Indian government since the early 2000s, with many recent and ongoing developments in policies and programs that expand energy access to all households in India. Notably, the National Electrification Policy, adopted by the Ministry of Power in 2005, launched its flagship rural program to electrify 100,000 villages and provide free electricity connections to 23.4 million below-the-poverty-line (BPL) households by 2009. In 2015, Prime Minister Narendra Modi pledged to bring reliable “24x7 Power for All”, when 18,452 villages were still without electricity. Although “village electrification” was achieved 3 years later, a village was defined as “electrified” if 10% of households and public places were connected, hence the statistic is slightly misleading. In 2018, while India reported 99.4% electrification, 304 million people still lacked access to electricity. 

 

There are many challenges to electrifying rural villages – the most salient one being the prohibitively expensive costs of connecting rural areas to the existing grid. In addition, there are also economic challenges on the consumer side; low affordability and high initial costs make it difficult for rural populations to afford the costs associated with electricity connections and usage, or to find a financial institution that is willing to provide a loan to cover the high initial costs. There is also the issue of highly fragmented demand, with rural areas typically having much lower population densities compared to urban regions. The implication is that electricity demand and usage also becomes fragmented and dispersed, making it economically challenging to provide cost-effective services. Finally, maintenance of a new electrification infrastructure is often an issue in rural areas where maintenance and service may become abandoned due to lack of skilled personnel  and/or inability to afford the services. 

 

Given the high costs of extending the grid to areas that are not densely populated, fragmented demand, low willingness/ability to pay by the end consumer, the economics make it difficult to electrify the last 2% of villages without innovative business solutions and heavy government subsidies. 

 

In addition to the economic growth challenges, environmental risks for the subcontinent loom large. Around 600 million people in India are at risk from climate change fallouts such as floods, wildfires, and heat waves. Inaction on this threat could shave USD 1.1 trillion off the country’s GDP by 2050, eroding progress on sustainable development and poverty alleviation in a country that already struggles with meeting basic needs.

 

Challenge of Decarbonization and Reaching Net Zero in India

 

As of 2019, India’s net annual emissions stand at 2.9 GtCO2e, placing the country as the world’s third-largest emitter after China and the US. In light of the global climate crisis, India has made several key commitments to decarbonization, including reaching net-zero emissions by 2070 (which they announced at COP26 in 2021), and updating their Nationally Determined Contribution (NDC) for 2030 - including pledging to derive half of its power-installed capacity from non-fossil fuel-based energy resources. The challenge of decarbonization in India is a unique one because of its rapidly growing economy - it is said that over three-fourths of the India of 2050 is yet to be built, requiring heavy investments in infrastructure which is expected to multiply demand across the highest-carbon emitting sectors such as power, steel, cement, auto, and agriculture. 

 

As part of the decarbonization plan, India has set out ambitious targets for renewable energy, aiming to reach 455GW of non-fossil fuel energy capacity by 2030. This goal represents an increase in proportion of total energy capacity from 9.2% in 2019 to 32% in 2030 – an increase almost directly proportional to the shift away from coal which was 80% of energy generated in 2019 and projected to be 56% of generation in 2030. To achieve this goal, India would need to add 35GW of renewable energy capacity per year, which is much higher than the 10GW of renewable energy capacity that was newly added in 2021. Although this current rate of progress seems slow, there are other emerging tail winds in the space, such as the decrease in costs of renewables. In addition, it is important to note that there is a strong government push to prioritize expanding renewable energy capacity, seen in the creation of a dedicated ministry, as well as the actual 2x increase in renewable power capacity seen in the four years from 2014-2018. The development of renewable energy is especially critical because India’s energy consumption is expected to grow the fastest among all major economies by 2040 due to increasing urbanization, rising income levels, penetration of electric vehicles, demand for buildings/infrastructure, and increased mechanization in agriculture. Some of the challenges the whole renewable energy sector faces include finding funding for the energy transition, reforming distribution companies (DISCOMs) that are facing financial stress and creating barriers to renewable energy adoption, and grid management to balance supply, storage, and backup given the intermittent nature of renewable power sources.

 

Decentralized Renewable Energy as a Solution

 

Decentralized Renewable Energy (DRE) is a subset of renewable energy systems, characterized by closer proximity of energy production and energy consumption. DRE technologies aim to provide clean, efficient, and sustainable energy solutions to communities, particularly in rural areas. Rooftop solar has the largest adoption among DRE technologies to date given its relative strengths in generation capacity and cost. Some of the key DRE solutions include the following:

  • Solar: includes rooftop solar and off-grid solar (which can generate power for agricultural pumps, cold storage systems, home systems, EV charging infrastructure, etc. and have applications in dryers, mills, looms, street lights, lamps, power packs, etc.)
  • Wind: 50-300kW small wind systems provide energy for village electrification and can be used in a hybrid mode with solar
  • Micro-hydro: a large number of perennial streams with adequate discharges, especially in the Himalayan regions, can be used to generate power
  • Biomass: solid biomass (e.g. trees), biogas (e.g. cattle waste), and liquid biofuel (e.g. plants and sugarcane) can be used to generate power
  • Microgrids: a 50kW off-grid system can power basic lighting, phone charging, and TV for 500 households; mini grids can range from 10kW to 50MW 

 

Decentralized renewable energy (DRE) sources like rooftop solar panels, micro-grids, rechargeable batteries, and biomass gasification have shown promise in bringing energy to rural areas. Solar photovoltaic technology has already replaced more than half of diesel-run systems in rural India. Consequently, DRE technologies have enabled a 35% increase in users’ median annual incomes (growth from USD $957 to $1,316), increasing their ability to invest in their children’s education and healthcare. Those that were not earning an income before were able to start earning USD $439 annual from the DRE-livelihood solution.

 

There is a huge opportunity for the private sector to offer DRE services in the untapped parts of rural India and create employment opportunities. Players including energy companies and philanthropic organizations like Selco Foundation, Shell Foundation, Villgro, Hero Energies, and the Rockefeller Foundation are helping scale DRE technologies. Tata Power’s joint venture with the Rockefeller Foundation, Tata Power Renewable Microgrids (TPRMG), aims to set up 10,000 mini-grids in India in the next decade.

Key challenges DRE adoption and scaling faces can be categorized as technical, regulatory/political, and economic.

 

Technical challenges

Intermittency is a continual problem that plagues decentralized and centralized renewable energy alike. Renewable energy has variability with peaks and valleys depending on time of day and weather, and thus planning of usage and balancing of the grid for supply, storage, and backup are critical. In other countries, Transmission System Operators (TSOs) have adopted creative approaches to solving this challenge: 

  • In Chile, the Transmission Expansion Plan proposed expanding its transmission capabilities with two 500 MVA storage as transmission assets (i.e. battery-based energy storage assets)
  • In Germany, new lines are being built to bring “green power” generated up north to load centers in the south, while also adding 450 MW of redundant storage assets located strategically in the grid (AKA “Grid-Boosters”). In the event of a transmission line failure, the batteries will react within milliseconds to keep the power system stable
  • In India, a $1.6B transmission line buildout will link 20 GW of renewable energy generated in seven different states with the national grid. As India scales up its renewable capacity, transmission issues come into greater focus. Many of the highest value solar and wind opportunities are located in the Southern Region, and the Northern Region is best situated for generating hydroelectric power.

 

However, demand doesn’t necessarily match supply, either regionally or nationally. In the Northern Region, demand mostly peaks in the early evening hours, while demand in the Southern Region is relatively stable throughout the day. Climatic differences across regions also create seasonal demand differences that can’t always be met by regional supply. The Interregional Transmission Capacity network plan below illustrates the complexity of inter-state transmission systems.

 

 

The Indian government addressed these issues by connecting all operating regions into a single synchronous National Grid in 2013, allowing for better movement of power from region to region. 

 

But with renewable power plants often located deep in remote parts of different regions, transmission issues arise. The alternative to connecting to the centralized grid is to implement smart, decentralized electricity networks. The Indian government-sponsored Revamped Distribution Sector Scheme foresees investments of $40 billion to improve the quality, reliability and affordability of power supply to consumers through a financially sustainable and operationally efficient distribution sector. These smart grids represent a technological paradigm shift in how electricity is managed and consumed. Components of a smart grid include:

  • Data-oriented devices which create visibility on the state of the network (IoT-enabled sensors, edge computing, predictive algorithms)
  • Digital grid management operating system software
  • Individual and larger-scale battery networks to store energy and combat intermittency
  • Expanding renewable energy will also require incremental land. McKinsey estimates 10 million hectares will be required by 2070 in an accelerated climate change mitigation scenario. Maximizing barren land use leveraging innovative land optimization techniques may be one method of tackling this challenge.

 

Regulatory/policy challenges

In the recent decade of initiatives to onshore manufacturing in India (e.g. 2014 Make in India initiative), hikes in goods and service taxes (GST) and import duty on solar components have increased the costs of projects. This has not only been controversial within India but also to suppliers around the world. For example, a US Trade Representative filed a complaint at the World Trade Organization challenging India's domestic content requirements, citing discrimination against US exports and insisting that such restrictions are prohibited by WTO. 

 

Tax and subsidy regimes for renewable energy are also petering off. One recent joint study by the Council on Energy Environment and Water (CEEW) and the International Institute of Sustainable Development (IISD) notes that since 2017 the subsidy for the renewable energy sector has dipped by 59%. This CEEW study also emphasizes that major support for clean energy projects in India have primarily been through non-banking financing companies (NBFCs) and select private banks, whereas investments of public sector lenders have been geared towards fossil-fuel-based energy projects.

 

“More subsidy support will be needed to scale up solar manufacturing, green hydrogen, and promising decentralized renewable energy technologies. To manage the intermittency of the sector and the grid integration aspect, the supporting ecosystem including storage and transmission would also need government support and additional investment,” said Prateek Aggarwal, program associate at CEEW and a co-author of the study.

 

He said the sector would need more investments from different financial institutions, as the situation demands large-scale mobilization of capital through debt instruments. In terms of volumes, CEEW’s study estimated that $200 billion would be needed to set up the generation capacity alone whereas the combined current exposure of banks and the NBFCs to the entire Indian power sector stands at around $160 billion.

 

One mitigant for this issue could be more financial regulations from India’s central bank, the Reserve Bank of India (RBI), to require more “green” reporting of annual loan disbursements for India’s public sector banks (PSBs). This should have the effect of creating more accountability to boost renewable energy financing.

 

Another issue is that state governments have frequently tried to renegotiate or cancel Power Purchase Agreements (PPAs) with developers to achieve a lower price per unit of electricity as solar tariffs decline. This destabilizes and hurts profitability of the solar projects, which has the potential to dissuade investors and endanger foreign investment. More often than not, such decisions have political overtones and usually, the government in power tries to nullify PPAs signed by the previous regime, usually citing corruption. The Punjab legislature passed the Punjab Renewable Energy Security Reform, Termination, and Redetermination Power Tariff Bill of 2021, and Andhra Pradesh has been busy reopening PPAs since 2019. Gujarat, Rajasthan, Karnataka and Uttar Pradesh have also all tried to renegotiate or cancel PPAs in the past. This is further complicated by the fact that tariff determination is under the domain of the electricity commissions and not state governments. With the passing of several electricity reform laws, the government has ceded its right to have a say in tariff determination.

 

Additionally, the state electricity distribution companies (DISCOMs) are hostile towards rooftop solar projects as they foresee a loss in revenue, an increase in costs, and the longer-term threat of disintermediation. DISCOMs, the regulatory commissions, and the state governments are often perceived as acting as a single team, joining forces against developers to thwart contracts.

A lack of clarity on grid extension plans and interactivity has led to concerns about the long-term viability of the DRE business model. Unclear policies on net metering (using the electric grid to "store" excess energy produced by solar panel systems to offset electricity costs during net consumption periods) also pose a challenge.

 

However, the government support for DRE has not been all lackluster. In addition to electrification initiatives highlighted earlier, the government has created programs that target and promote off-grid decentralized solar PV applications, especially in areas where grid power is unavailable or unreliable. For example, in 2010 the National Solar Mission (one of eight core “national missions” in the 2008 National Action Plan on Climate Change) set a target of installing 2,000 MW equivalent of solar off-grid systems by 2022. 

 

See below for the Shakti Foundation’s summary of various policies implemented by central and state governments to catalyze growth of DRE-based energy access.

 

 

Economic challenges

Scaling DRE is hindered by high costs. For example, off-grid solar is 30% costlier than grid power due to the involvement of panels and battery backups. As of 2021 only 5% of installed capacity of renewable energy (RE) is DRE, and the situation worsened after COVID-19 as global markets for DRE products like pump sets, solar lanterns, and micro-grids took a hit. 

 

In addition, affordability for end-users remains a challenge. The average Indian farmer lives on an annual income of USD ~$1,500, and DRE technologies can cost between USD $200 to $30,000. The CEEW study cited earlier indicated a potential increase in median income of USD $341 per year. Taken together, these statistics highlight that DRE technology payback periods can be quite long if not deployed towards appropriate use cases, though this does not accurately reflect the benefit to wellbeing that DRE creates in underserved areas.

 

These issues together have created a significant obstacle in the perception of DRE-based livelihood solutions as capital-intensive. This, coupled with the gap in awareness owing to a need for more evidence on the impact on diverse stakeholders, makes enabling evidence-backed financial support for enterprises and end-users essential for large-scale deployment. This can be addressed by investing in collecting evidence from interventions from implementing organizations on efficacy of DRE projects.

Even with the significant obstacles to scaling DRE-based solutions, there have been many cases that have proven successful models of uses. These examples are the reason for increased adoption, especially in homes, businesses, and industries throughout India. From innovations in solar and biomass powered mini-grids to small scale wind turbines and energy storage, DRE has been expanding access to energy specifically in rural and remote areas. 

 

In this next section we run through some case studies and lessons learned.

 

Case studies from Companies Involved in DRE in India

 

Case 1: SELCO + Solar DRE

 

SELCO (“Solar Electric Light Company”), based in Bangalore, was founded in 1995 by Dr. Harish Hande and Neville Williams as a private for-profit social enterprise. SELCO initially aimed to sell and service photovoltaic (PV) systems in Dr. Hande’s home state of Karnataka, with a mission of providing sustainable energy services to low-income households and businesses. More recently, SELCO expanded services to include the supply and distribution of sustainable energy through solar lighting, solar thermal water heaters, solar inverter systems, and special projects, enabling the underserved sector to receive sustainable energy at affordable costs.

 

SELCO has gained recognition in customizing solar electric components for the unique requirements of low-income urban and rural communities through conducting needs assessments for various segments, like street vendors, midwives, and farmers. SELCO also built relationships with Indian banks and microfinance organizations to promote solar power's effectiveness. These partnerships led to financial instruments, enabling entrepreneurs and families to cover the capital costs of solar equipment installation.

 

Financially, SELCO has performed well, showing annual growth of 20% over the past 8 years with modest profits. They currently have 552 employees, 67 energy centers, and have installed over 450,000 solar solutions for low-income households in Karnataka, Kerala, Maharashtra, Bihar, Tamil Nadu, and Andhra Pradesh. Today, SELCO is an umbrella of organizations addressing different gaps in the energy access ecosystem: Selco India (core), Selco Foundation (innovation research lab), Selco’s Incubation Program, and Selco Energy Access Fund.

 

SELCO focuses on expanding energy access in low-income populations of India using solar. Although SELCO’s mission doesn’t directly focus on the energy transition from carbon-intensive energy sources to renewable energy, SELCO’s solutions and impact are aligned with the broader trend of transitioning the energy grid to a more sustainable one. Accordingly, SELCO doesn’t have a specific sustainability strategy or measurable goal of carbon abatement, but their impact can be interpreted as ‘leapfrogging’ a segment of India’s population’s energy usage directly to renewables, while catalyzing progress related to health, education, financial inclusion, and overall improvement in quality of life.

 

Lessons: SELCO has placed a rigorous focus on providing a quality product fit to the customer needs at an affordable price. Specifically, SELCO’s strength lies in its innovative approach to overcoming financial barriers in bringing capital intensive projects to low-income communities in India. Recognizing the diverse income patterns of its customers, SELCO spent considerable effort persuading banks to design repayment schedules aligned with their customer’s financial realities. This included low upfront investment, cheaper cost of capital, flexible pay back schedules and access/ease to financing that was managed by SELCO rather than the customer who may be uneducated on this topic. This was crucial because many low-income customers did not have access to financing and had irregular cash flows such as paddy farmers who pay annually based on their crop cycles. Beyond just working with the banks, SELCO collaborated with third-party guarantors and NGOs like the Small Scale Sustainable Infrastructure Development Fund or GEAPP to lower the interest rates on capital or offer down payment assistance. SELCO's approach exemplifies the importance of tailored financial packages and collaborative efforts in advancing sustainable energy access for marginalized communities.

 

Case 2: GEAPP + Funding DRE

 

The Global Energy Alliance for People and Planet (GEAPP) is a collaborative effort focused on increasing access to renewable energy in emerging economies through complementary sources of capital, delivery capacity, deep expertise, and global reach. With a recognition that clean energy is a fundamental driver of development, GEAPP seeks to address energy poverty, impacting 3.6 billion people globally. It operates through a spirit of radical collaboration, bringing together philanthropic organizations like the IKEA Foundation, The Rockefeller Foundation, and the Bezos Earth Fund, alongside governments, development partners, and the private sector.

 

GEAPP's geographical reach spans Africa, Asia, Latin America, and the Caribbean with specific priority in DRC, Ethiopia, India, Indonesia, Nigeria, South Africa, and Vietnam because of the scale of potential impact and existing government commitments to clean energy. The core of their work revolves around three catalytic themes:
 

Distributed Renewable Energy (DRE): Promoting the cost-effective use of DRE, especially through microgrids, to improve energy access, particularly in rural and urban areas with the goal of reducing 4 Gigatons of future carbon equivalent emissions.

Green Grids: Collaborating with national utilities and the private sector to bolster renewable energy integration into grids and phase out fossil fuel infrastructure with the goal of providing 1 billion with clean energy access.

 

Green Economy: Demonstrating that green industries can drive economic growth, create jobs, and encourage productive use of electricity through partnerships with governments and Alliance partners with a goal of 150 million new jobs and sustainable livelihoods.


GEAPP is dedicated to a rigorous Monitoring, Evaluation & Learning (MEL) approach to assess and deliver outcomes related to carbon reduction, energy access, and job creation. Additionally, their advocacy efforts are supported by the Global Leadership Council (GLC), composed of global leaders and thought leaders working to advance just energy transitions and combat climate change. The GLC seeks solutions including cost reduction of clean energy technologies, locally owned Just Energy Transition Partnerships (JET-Ps), and carbon credits for coal decommissioning, all aimed at ensuring an inclusive and sustainable renewable energy future.

 

Lessons: GEAPP has been successful in increasing access to renewable energy through focusing on the importance of collaboration, strategic geographic emphasis, and a diverse set of methods to execute. GEAPP's model of collaboration involves bringing together diverse stakeholders, such as philanthropic organizations, governments, development partners, and the private sector, recognizing the need for complementary sources of capital, delivery capacity, and expertise. Strategic geographic emphasis in countries like DRC, Ethiopia, India, Indonesia, Nigeria, South Africa, and Vietnam demonstrates an understanding of potential impact and alignment with existing government commitments to clean energy. Finally, GEAPP uses various creative methods to execute their mission such as guaranteeing DRE loans for low-income customers or providing funding through energy transition innovation challenges such as ENTICE. These various methods of financial support advance their mission of increasing access to DRE through a systems approach focusing on a wide range of customers.  

 

Case 3: Tata Power Renewables + Solar Microgrids 

 

Tata Power is a for-profit organization and subsidiary of Tata Group that has a strong portfolio of 3,136 MW solar generation capacity. Beyond its large scale renewable projects, Tata holds a variety of decentralized projects including Solar Rooftop, Solar Microgrid, Solar Pump, and Solar Module & Cell.

 

Diving deeper into specifically Tata Renewable Microgrid, it is operated by TP Renewable Microgrid Limited (TPRMG), a wholly owned subsidiary of Tata Power, and is a leading solar microgrid company in India, planning to deploy 10,000 microgrids in the near future. With 161 microgrids installed within a year, particularly in Uttar Pradesh and Bihar, and a pilot program in 10-15 villages in Odisha, TPRMG offers a cost-effective solution with power costing around one-fifth of diesel. Beyond households, their customers include shops, medical clinics, electric mobility providers, telecom towers, teaching centers, and roadside eateries. The microgrid model utilizes innovative technologies such as the Optimised Cost of Electrification Model (OCEM) to ensure optimal solutions based on factors like sunlight, grid reach, demand, and fuel costs. Overcoming challenges such as prohibitive battery technologies, the microgrid model has evolved through public-private partnerships and technological innovations, holding the potential to change the rural electrification landscape in India and beyond.

 

Lessons: Tata Renewable Microgrid’s success is rooted in focusing on a cost-effective model that offers power at a cheaper price than the current customers option of diesel. In addition, Tata further addresses the financial barriers by obtaining public-private partnership to lower the cost. 

 

Case 4: Husk Power Systems + Biomass-based Micro-grids: 

 

Husk Power Systems specializes in providing decentralized power solutions to rural communities in India and Africa, utilizing biomass-based mini-grids. Their innovative approach converts agricultural waste, such as rice husks, into electricity, addressing both energy access challenges and agricultural waste management. In addition they use a “pay-as-you-go” service, facilitated by mobile-enabled smart metering, providing reliable and low cost AC power to households and small businesses. They have have expanded into selling solar home systems and highly efficient appliances like TV, ceiling fans, refrigerators and freezers etc that are grid-compatible.Their commitment to community empowerment is evident through extensive training programs and initiatives, including the conversion of waste into products like incense sticks, providing flexible employment to local women.

 

Lessons: Husk Power Systems' success is rooted in its locally adapted, sustainable energy model that leverages readily available resources. By combining the use of biomass with a community-centric approach, they address the specific needs of rural areas, ensuring reliability and affordability in energy access while contributing to environmental sustainability. In addition, their innovative 'pay-as-you-go' energy service, facilitated by mobile-enabled smart metering, offers flexibility, grid compatibility, and rapid, cost-effective deployment, empowering customers to use various appliances. Husk also has been successful through their focus on providing comprehensive biomass, mechanical and solar training to over 100 technicians and electricians each quarter, alongside regular electrical safety courses for customers. This has helped with advertising and education of the population. 

 

 

Case 5: WindStream Technologies + Small-scale Wind Turbines: 

 

WindStream Technologies focuses on small-scale wind turbines which combine solar and wind technologies for decentralized energy generation. Their products are designed for diverse environments, contributing to the generation of clean energy in various geographic locations. The company has 528+ installations in 35+ countries with 2,890+ MW hours. They have innovated a variety of different products based on their wind turbines including a variety of different sized solar and wind products, a floating wind turbine, a wind turbine on a boat and an EV charging wind turbine. WindStream's diverse product range, global partnerships, and commitment to technological innovation position it for sustained growth in the renewable energy sector.

 

Lessons: WindStream's success lies in its commitment to innovation, offering hybrid solutions that harness both solar and wind power for a variety of use-cases (boats, floating, trailers, refrigerators, etc.) This versatility makes their products suitable for a range of energy needs and geographic conditions.

 

Case 6: GravityLight + Gravity Based Lights 

 

While not a traditional company, GravityLight is a project that focuses on providing decentralized and sustainable lighting solutions. It uses the force of gravity to generate power, offering an alternative to traditional lighting sources in off-grid and rural areas without the need for batteries. The company, established in 2009, originally was a Therefore design consultancy partnership with SolarAid. A successful crowdfunding campaign raised nearly $400,000, enabling the distribution of products in 26 countries and user feedback led them to the  creation of an enhanced version, GL02 responding to user preferences for brighter and longer-lasting light.

 

Lessons: GravityLight stands out for its simplicity and affordability, offering an off-grid lighting solution that requires minimal resources. By eliminating the need for batteries or external power, GravityLight has successfully provided a low-cost lighting solution suitable for communities with limited resources, contributing to its widespread adoption in areas facing energy poverty. In addition, GravityLight has excelled in responding to customer feedback to continually adapt to provide exactly what customers need.

 

Case 7: Sistema.bio + Biogas DRE 

 

Sistema.bio is a company dedicated to providing sustainable and renewable energy solutions through the development and implementation of biodigester technology. They focus on converting organic waste, such as agricultural and animal residues, into biogas and biofertilizer. The biodigester systems enable farmers and rural communities to manage organic waste in an environmentally friendly manner while simultaneously generating clean energy in the form of biogas. This biogas can be utilized for cooking, heating, and lighting, providing an eco-friendly alternative to traditional energy sources in rural areas. Additionally, Sistema.bio promotes sustainable agriculture by using the biofertilizer produced to enhance soil fertility and improve crop yields. The company aims to offer affordable and scalable solutions to address energy and agricultural challenges in diverse regions and has achieved 75k+ digesters installed, 715k+ tons of Co2e mitigated, 31M+ m^3 of waste treated and 450k+ people using clean energy from Sistema.bio’s product.

 

Lessons: Sistema.bio's success is rooted in its holistic approach, integrating waste management and renewable energy solutions. By collaborating with NGOs to provide financial assistance, they ensure their biogas solutions are accessible to economically disadvantaged communities. This commitment to a comprehensive, community-centered model has contributed to their success in promoting sustainable energy solutions.

 

Overview of Best Practices

 

From many of the cases, there tends to be three major takeaways that have made a variety of these companies successful with growing adoption of DRE. First, many of the customers that DRE will be most attractive to will not have grid access due to being rural and more than likely these customers are lower income without access or education for financing large upfront investments. This is why it is imperative to pair the product with a financing instrument that provides options for financing or lowers the cost of the product with flexible pay-as-you-go structures. Second, the successful companies focused on providing a quality product that is hyper-focused on customer needs and nothing more. They take customer feedback seriously and adapt the product to fit the specific need of a customer segment. Most of these customers do not have extra money to pay for features they do not need. Third, many DRE companies that found success leveraged partnerships with the government, banks, or NGOs (The Energy and Resources Institute (TERI), Practical Action, WISE (Women in Sustainability and Energy, Greenpeace India, etc.) This is critical to get additional assistance from other organizations to either spread risk to other parties beyond the company and customer or obtain cheap financing. DRE does not just create impact through the clean energy transition, but many of these products provide energy to rural and low-income people who would not have access to energy in the first place.

 

Conclusion

 

Decentralized renewable energy has its challenges with economic, technical, and regulation, but if companies leverage the right financing tactics, partnerships, and customer-product fit, DRE adoption can grow. DRE will provide a great opportunity to not only increase the reach of renewable energy to low-income and rural populations but also increase the pace of adoption throughout India and developing worlds alike.

 

Disclaimer

 

This is the work of Rohan Mehta, co-founder of GrowthSeed, and two classmates at Harvard Business School Dusty Stahl and Kazumi Kanagawa. None of the information represents novel primary research, rather it is an interpretation of existing research collected from the internet.

 

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