Solar Powering Rural Development: Empire of the Sun

Two decades ago, the International Energy Agency (IEA) projected that by 2020, the world would have installed a grand total of 18 gigawatts of photovoltaic solar capacity. In 2007 alone, about 18 gigawatts (GW) of solar capacity was installed. The USA installed 19.2 gigawatts (GW) of solar PV capacity in 2020 to reach 97.7 GW of total installed capacity, enough to power 17.7 million American homes. India added 3.2 GW or 3,239 MW of solar capacity in 2020 which brings the country’s total solar installed capacity to 39 GW compared to China’s installed capacity of 252GW. India ranks third, (China at second and the US on top) in ‘Renewable Energy Country Attractiveness Index’ by Ernst & Young, with 38% of the country’s installed electricity generation capacity coming from renewable sources.

The Renewable Energy Association defines “Renewable energy technologies are energy-providing technologies that utilise energy services in ways that do not deplete the Earth’s natural resources and are as environmentally benign as possible. These sources are sustainable in that they can be managed to ensure they can be used indefinitely without degrading the environment”.

These technologies favour power system decentralisation and locally applicable solutions more or less independent of the national network, thus enhancing the flexibility of the system and the economic power supply to small isolated settlements. Several research showcase that renewable energy technologies, energy conservation, cogeneration and district heating, energy storage technologies, alternative energy dimensions for transport, energy source switching from fossil fuels to environmentally benign energy forms, coal cleaning technologies, optimum monitoring and evaluation of energy indicators, policy integration, recycling, process change and sectoral shifts, acceleration of forestation, carbon or fuel taxes, materials substitution, promoting public transport are broadly the solutions for the environmental challenges that developing nations are threatened at large.

From a small base in the 1970s, the ‘new’ renewables i.e., biomass, geothermal, PV, small-scale hydro, solar thermal electric and wind, have grown proportionally more rapidly than any other electricity supply technology. In 2015, The International Energy Agency (IEA) had projected that, without policy initiatives, fossil fuels will account for more than 90 of total primary energy demand in 2020. And it turned out to be 84%. Major international studies indicate significant growth potential for renewables, particularly in scenarios where environmental constraints are imposed, for example on CO2 emissions. Projections show that by 2050, all countries could substantially increase the proportion of renewable energy in their total energy use.

The International Renewable Energy Agency (IRENA) suggests that renewables can make up 60% or more of many countries’ total final energy consumption (TFEC). While China could increase the share of renewable energy in its energy use from 7% in 2015 to 67% in 2050, the European Union (EU) could grow from about 17% to over 70%. India and the United States could see shares increase to two-thirds or more. Having a dedicated renewable energy ministry such as the Ministry of New and Renewable Energy (MNRE) in India has helped on this score as much as the proactive role played by private renewables enterprises.

Renewable Combustibles and the BRICS

India, Brazil, and China have the highest levels of use of renewable combustibles – higher than the developed countries, while Russia has the lowest level. India has the highest level of use of combustible renewables and waste in total energy, despite experiencing a major decrease in these levels over time. In the 1990s, around 40% of total energy use in India was renewable combustible; in the 2000s the ratio decreased to 30%. This high share seems due to India’s reliance on non-commercial energy sources in rural areas, including wood, crop residues and animal waste, whereas the decrease in the use of renewable combustibles would seem attributable to the replacement of traditional sources by more efficient commercial energy sources.

Similarly, in the 1990s, 30% and 20% of the energy used in Brazil and China, respectively, was renewable combustible; in the 2000s it was about 25% in Brazil and 13% in China. One could argue that the decrease in the use of renewable combustibles in India, China and Brazil may indicate that economic development initially leads to reduced use of traditional renewables and increased use of fossil fuels, rather than an increase in the use of modern renewables. In Russia and South Africa, on the other hand, the levels of renewable combustibles in total energy consumption were stable and significantly lower during the same period, by about 1% and 10%, respectively.

Solar Energy Technologies and Solar Entrepreneurship

Bangladesh’s experience with solar RETs and dissemination of the same to poor rural households and building entrepreneurs has been highly successful, making it the first ‘solar nation’ in the world. Penetration of RETs in the form of Solar Home Systems (SHS) in rural households and the use of the technology for creating micro-enterprises has been widely cited as a successful case of solar RE contributing to communities and wider society. Households who received the SHS used the technology to start micro-enterprises from home by making and selling different home-made handicraft goods e.g., jute and silk products. In many communities, these micro-enterprises also hired other people from the local community.

The myth that solar energy was not affordable has been broken, over one million SHS have been installed in Bangladesh, benefitting over 6 million rural people. This has encouraged local entrepreneurship, especially women-led start-ups that counts for 36% of the same, rural women are assembling solar accessories in village-based technology centres, solar engineers are increasingly employed in designing SHS, working in battery factories, and other accessory related businesses. Apart from the above initiatives, Grameen Shakti and Bright Green Energy Foundation in Bangladesh have been exceptionally successful in reaching out to the poor and building local level women entrepreneurs over time.

The case of Bangladesh is similar to SELCO’s initiatives in India. Solar Energy Lighting Company (SELCO) India Pvt limited, based in Karnataka, Bangalore – identified that mobilisation of finance, the realisation of niche markets for RETs and strengthening relevant institutions to introduce solar RETs in rural areas are possible avenues to empower women, the disadvantaged, create jobs and facilitate rural development. The multiple stakeholder engagement and institutional arrangements that SELCO has got at various levels boost the credibility and sustainability of the model. SELCO works with NGOs, local financial institutions, education institutions and social enterprises. These institutions can be seen as both direct and indirect stakeholders of the company – interacting, acting and reacting on a daily ongoing basis in order to ensure the continued operations and offering services to rural entrepreneurs and clients. Based on individual household energy needs, SELCO provides customised solar energy technologies such as solar home lighting systems, solar lanterns and lamps amongst other types.

In India, the importance of women (i.e., the primary users of household energy for cooking and heating) in the context of energy has been widely recognised by successful organisations and networks like SEWA (Self Employed Women’s Association), TIDE (Technology Informatics Design Endeavour), AIWC (All India Women’s Association), and also SELCO. The larger goal has been to involve more women and transform them into energy entrepreneurs.

Income-generating Energy-based Enterprises

The Gramin Bank offers small credit to women entrepreneurs in rural Bangladesh; these women are already marketing PV systems and operate cell phones through solar energy.  Similarly, the All India Women’s Conference (AIWC) in India started providing rural women with solar lanterns and charging stations. Women charge their lanterns during the daytime and then in the evening they rent the solar lanterns to street vendors and to those houses that do not have electricity or face long hours of power cuts. AIWC has also initiatives on solar-powered water purifiers (women sell purified potable water to the locality at nominal rates). Two other household-level income-generating activities started by women by solar RETs are barefoot engineers from TILLONIA Women’s group not only install, maintain and repair but also manufacture parabolic solar cookers with confidence. Also, at BAHAI’s women’s group from Madhya Pradesh women are manufacturing, selling and also marketing solar cookers.

An Innovative credit system, appropriate product design, grassroots-based effective and efficient after-sales service plus other consumer-friendly options play a big role in the above-mentioned cases. One of the main factors behind the Bangladesh success story is that it empowers rural communities to own and use solar RETs and eventually become partners to bring and expand solar RETs in their communities. These organisations, besides providing the necessary technologies, also offer credit and market opportunities to their target users and clients.

Another endeavour made by AIWC and CRT (Centre for Rural Technologies) in Nepal where the solar RETs provided to women comes in the form of solar air-dryers which involves zero energy cost while processing fruits and condiments in a clean and hygienic environment. Also, Nepal Government’s MHP (Micro-hydropower) scheme has emerged as one of the promising decentralised renewable technology and proved to be one of the most successful models among several other RETs in Nepal. Both the government and private sectors cooperate and partner in the promotion of the MHP sector. In addition, the Agriculture Development Bank of Nepal (ADB/N) plays an intermediary role between government and private entrepreneurs for providing financial help (loan) in installing MHP plants in Nepal. This has spurred local entrepreneurs and solar RET based initiatives and have boosted local opportunities, it is apparent that having access to a reliable and affordable supply of electricity, rural households can create jobs at the community level, which ultimately accelerates rural economic development.

Rural eco-entrepreneurship development (REED) program for employment generation in environmental services, another initiative that promoted those enterprises with a focus on renewable energy (RE) and to assist and facilitate setting up of environment service enterprises that provide services to people in renewable energy and bio-waste processing and helping them in running sustainably. REED programme focused on facilitating rural youth, women, SHGs and micro-enterprises to set up new ventures in the fields of waste-to-fertilizer projects, renewable energy and maintenance and equipment supply enterprises. The ‘packaging’ of a rural energy-based programme is particularly important, from the above examples a combination of various components such as capacity building, technology transfer, training, financing, costing could be learned.

Improving the uptake of renewable energy technologies in developing countries have been generally catalysed by certain policy measures and market incentives, but also equally and importantly by entrepreneurship and energy-based local enterprises. In particular, entrepreneurship has been touted as an important solution where fossil energy utilities remain an inherent, embedded feature of the institutional status quo. The risk-taking, innovative, and institution-changing features of entrepreneurial endeavour are key ingredients that can break the dominant grasp of incumbent fossil energies thereby facilitating the spread of renewable energy technologies.

Dr. Boidurjo Rick Mukhopadhyay, international award-winning Development and Management Economist and Prof Dr. Bibhas K Mukhopadhyay, author and Professor of Management and Economics