![]() ![]() To reduce theft, the workarounds that businesses adopt are often incredibly inefficient. Large-scale utilities are plagued by theft and a lax payment mechanism and these problems transfer to solar micro-grid providers. Creating a micro-grid requires building a micro distribution network with wires and metres. So, this policy essentially subsidises a dirty fuel burned in a high-pollution small generator, while simultaneously making it very hard for solar micro-grids to compete. The kerosene is used to power the plants, and in return the households receive cheaper electricity. But not satisfied with the inferior lamps, households are trading in their kerosene to the operators of small generator plants. The government provides an allotment of highly-subsidised kerosene to households meant for lamps. In India, a specific problem occurred because of a government subsidy programme. This source of electricity can be more flexible than solar, doesn’t require storage, and is often cheaper. In our study, solar micro-grids faced competition from generators burning a mix of diesel and kerosene. As with any other product, getting people to pay requires giving them what they want – even if this means serving fewer people with the same number of solar panels.Įven where micro-grids have takers, solar is not the only game in town. 2016) found a similar phenomenon in Kenya and Tanzania. If they couldn’t get that, they were willing to do without. Households wanted enough electricity to power a fan or even a television. While we might think households would (and should) be willing to pay for small amounts of electricity to be able to switch on a light at night, this was not the case. One reason involved the low-power nature of the micro-grid. There are various reasons this may have happened. Only 20% of potential micro-grid customers signed up, even with existing capital subsidies augmented with subsidies that cut monthly usage fees in half. Our study was conducted as a randomised control trial with households in 33 villages offered solar micro-grid connections at a subsidised price, 33 others offered these connections at the full price, and 34 not offered connections at all (control group). A mix of inefficient policy, conflicting incentives and unreliable operations can ultimately lead to a product that consumers do not want. So are solar micro-grids a sustainable solution to lighting up the developing and emerging world? Unfortunately, ongoing work being conducted with my colleagues in the state of Bihar, one of the poorest regions in India, suggests they may have a tough time. Often fully or partially funded by non-profits and social venture capital, solar micro-grids are popping up in villages from Africa to Bangladesh, where households are able to flick on a switch for light for the first time. Micro-grids - where a handful of homes are centrally wired to a field of solar panels - are becoming especially popular because, unlike rooftop solar, the high upfront installation costs can be spread throughout a village, making them cheaper. ![]() Rooftop solar and solar micro-grids seem appealing as a clean solution to a crippling energy access problem that condemns these countries to low growth. Millions of people in developing and emerging economies live without electricity, either because the grid has not reached them or because they remain too poor to pay. But grid-scale PV1 can only serve households actually connected to the grid. Most analysis conducted to date suggests that among various competing solar technologies the economics are best for utility-scale photovoltaic (PV) projects. In fact, with solar prices worldwide plummeting, many countries are placing bets on solar. Much of India’s strategy to reduce fossil fuels relies on a transition to renewable energy, namely solar. Last month, India helped the world get one step closer to an international climate pact when it ratified the Paris Climate Accord. Based on a survey of potential solar micro-grid customers in Bihar, this column highlights the challenges associated with solar electricity becoming a sustainable and scalable solution, and the need for a new approach. Much of India’s strategy to reduce the use of fossil fuels relies on a transition to solar energy.
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