“All I maintain is that on this earth there are pestilences and there are victims, and it’s up to us, so far as possible, not to join forces with the pestilences.”
―Albert Camus, The Plague

Sometimes I’m reminded just how luxurious our First World problems can be: I can’t find the cell-phone charger and my iPhone battery is drained; the power went out and now the Internet is down; and yes, I burned the rice again because I walked away from my clean-burning gas stove.

While these issues may feel important to us in economically developed nations, according to the International Energy Agency, over 1.3 billion people have no access to electricity and 2.7 billion people subsist without clean cooking facilities.  Clearly, the lack of universal electrification is a dire social problem with widespread economic consequences, and unfortunately, given anemic levels of investment and foreign aid, this gap is not going to close anytime soon.  In the meantime, nearly 2 million people a year will die prematurely, because without connections to the power grid, they must cook their food and heat their homes with wood, animal dung, crop waste, coal, or other fuels that produce high levels of indoor pollutants.

Let’s put those 2 million yearly deaths into perspective: Tuberculosis kills about 1.7 million people each year, 1.6 million perish from pneumococcal diseases, 780,000  a year succumb to malaria, and in 2010, 1.8 million people died from AIDS.  The lack of household energy, which forces these forgotten millions to rely on open fires and leaky stoves, is a major risk factor for pneumonia, chronic obstructive pulmonary disease, and lung cancer, largely among women and children.  According to the World Health Organization, progress in providing access to clean-burning cooking fuels has been “negligible.”

Recently, the UN Secretary General, Ban Ki-moon, formulated an initiative to make sustainable energy available for all by 2030.  The plan to achieve this includes doubling the rate of improvement in energy efficiency and doubling the share of renewable energy in the global energy mix.  All the right words seem to be conveyed:

Sustainable energy—energy that is accessible, cleaner and more efficient—powers opportunity.  It grows economies.  It lights up homes, schools and hospitals.  It empowers women and local communities.  And it paves a path out of poverty to greater prosperity for all.

Even with an action plan, ongoing committee meetings, and collaborative thinking about how to get the right stakeholders to the table, the concept of “sustainable energy leading to greater prosperity for all,” does not come close to framing the issue properly, in a manner that leads to immediate action that will change the lives of energy-impoverished people. The fundamental issue of electrification and clean household energy is not about empowerment, it is about survival.

Energy poverty needs to be viewed as a global health crisis, and treated in exactly the same way that other consolidated initiatives have worked to stop the spread of deadly disease.  Rapid deployment of technologies, such as natural gas-fired generation and off-grid renewable resource projects that support new power sources, delivery, and clean in-home cooking and heating solutions are the vaccine to the threats created by limited access to energy that impact human health, education, and economic opportunities in stricken countries.  Politicians, bureaucrats, and special interest groups that cause fragmentation and confusion need to compromise quickly by realizing that they are impeding serious efforts to fight this plague by holding their interests over the heads of people who can’t even turn on a light.

Images courtesy of D.light and Mera Gao Power.

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1). Solar-power microgrid service in rural villages: Startup Mera Gao Power wants to have a total of 70 villages electrified with its solar panels, cell phone charging service, and distribution lines by the end of 2012. Co-founders Jaisinghani and Brian Shaad have been working on these projects for about two years, and their business innovation was to sell the solar power as a service. One microgrid system that can electrify about 50 households costs $1,200 and includes two solar panels, two batteries and four distribution lines. The villages agree to have the system installed and then households in the villages pay about 25 rupees per week for the service (the cost of kerosene for lanterns can be around 30 rupees per week). The system starts to pay for itself after a certain period of time.

2). One of India’s first megawatt-scale rooftop solar projects: Azure Power, a startup run by entrepreneur Inderpreet Wadhwa, is developing a project that puts solar panels on dozens of rooftops and shares revenues from power sales with the building owners. Five-year-old Azure is venture capital backed and engineers, builds and operates its own power projects and sells the electricity to utilities. Most of the at least 56 MW worth of solar projects that Azure has built are ground-mounted projects, but more recently Azure won this deal to build part of a huge rooftop system in the Gujarat state government. Azure plans to install solar panels on over 60 rooftops and complete the project by March 2013.

3). 600 MW of solar in Gujarat: The Indian state of Gujarat in April threw a big party to celebrate the commissioning of 600 MW of solar energy projects over a year. Much of that occurred (214 MW) from a solar park in the Patan district. But over 50 companies have built solar power projects in Gujarat, including SunEdison, Tata Power, Lanco Solar, Moser Baer, Adani Enterprises and GMR Gujarat Solar Power.

4). The aspirational country goal: The National Solar Mission in January 2010 set a goal of installing 20 GW of grid-connected solar and 2 GW of off-grid solar by 2022 — that’s 3 percent of the country’s power using solar by 2022. This has led to auctions won by developers at rock bottom prices (almost too low to get them done profitably). Individual states also have their own solar plans.

5). SunEdison experimenting with rural projects, too: While project developer SunEdison has brought 45 MW of solar projects in Gujarat online, it is also looking at how it can make solar panel projects work in rural villages. Its project will focus on building a business model for designing, installing and managing solar systems for 29 villages in India’s Guna District. The 29 projects will be funded through a combo of government grants and private funds from other investors and corporations.

6). Selling solar like cell phone service: Startup Simpa Networks has developed a home solar panel product for off-grid customers controlled by a mobile, pay-as-you-go system. Customers pay for only the electricity produced by the solar panel at their home, in addition to a small upfront payment for the system. The basic solar system is 25 watts to 50 watts, which can power a couple of CFL lights, a mobile phone charger and maybe a fan or a TV cable box.

7). Solar teaming up with water use: One of SunEdison’s solar projects is a 1 MW installation over nearly half a mile of the Narmada Canal in the state of Gujarat. It will produce electricity and conserve land and water. Other companies are looking to sell solar-powered projects to the agricultural and water industries. Claro Energy is looking to sell solar-powered irrigation pumps to Indian farmers.

8). Solar lanterns: Startup d.light recently celebrated its fifth anniversary and the company has reached the goal of 7 million people using its solar-powered products (see photo) in 40 countries. The company says sales growth between May 2011 and 2012 was 400 percent and d.light focuses on India and countries in Africa. The company is backed by Indian VC firm Nexus Venture Partners, Indian conglomerate the Mahindra Group, venture firm DFJ, and others.

9). Giant solar thermal projects: Areva Solar is building a 250 MW solar thermal project in the northwestern part of India (in the state of Rajasthan) that will use mirrors to concentrate sunshine onto water filled tubes to produce steam — steam that will drive a turbine and make electricity. The project is supposed to be half way done by spring 2013.

10). Solar for cooking, heating, making stuff: A company called Flareum sells solar concentrating systems that can be used for cooking, and for producing steam and heat for industrial applications. Siemens is using some of the solar systems at factories in Bangalore.

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Power grid Old Delhi

The worst blackout in a decade hit Northern India on Monday forcing 370 million people to go without power, and disabling crucial infrastructure like the train system. The reality is that the country’s growing desire for power — to support its booming economy — is outpacing the country’s ability to build and manage more power.

While this is a huge problem for the country, it’s a massive opportunity for next-generation energy technologies like clean power, and the smart grid. Unlike in the U.S., where clean power and smart grid technologies are often times replacing current infrastructure, in India many times they are the first build-out of energy infrastructure.

Power grid Old Delhi

I, and others, have said this before. At an industry event last year, investor Ira Ehrenpreis (who backed such investments like Tesla) said it’s the worst time to be in greentech in the U.S. and the best time to be in greentech in many countries outside the U.S.

When I traveled to India last December, rolling blackouts were common place even in the major metropolitan cities like Delhi and Mumbai. And beyond the grid, there’s distributed power opportunities, too. Many villages are looking at ways to add distributed solar power and microgrids through groups like Simpa Networks, and Mera Gao Power.

The rapidly growing Indian middle class will soon want to consume similar amounts of power to the U.S. and Europe, and that will require this massive power infrastructure buildout. The country has plans to add 100 GW of power generation over the next five years, and that will be made up by mostly coal and clean power.

But India’s domestic coal industry is a mess. The New York Times described it as having “clumsy policies,” “poor management,” “environmental concerns,” and “retail electricity prices that are lower than the cost of producing power.” Eighty percent of domestic coal production is managed by the government-controlled Coal India.

That’s why solar and wind power could thrive in India. India is expected to install 3 GW of solar by 2016, compared with the 54 MW of solar installed in 2010.

Next-gen energy startups and companies — if India isn’t on your radar, it should be.

For more on my writing about India and energy check out:

• Lessons learned from an entrepreneur electrifying India
• How a startup is cracking the Indian solar market
• A startups plan to sell solar like cell phones
• Why solar will thrive in India: coal is a mess

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This week SunEdison, part of Missouri-based MEMC Electronic Materials, announced a project to bring solar systems to rural Indian villages called “Eradication of Darkness.” The project will focus on building a business model for designing, installing and managing solar projects for 29 villages in India’s Guna District. The 29 projects will be funded through a combo of government grants and private funds from other investors and corporations, says SunEdison.

SunEdison already completed the first test installation for this initiative — a 14-kilowatt solar panel project in Meerwada, India that is generating electricity for 400 villagers. SunEdison says it worked with the village closely on issues like safety, education, and use, and previously the villagers only used kerosene for lighting.

SunEdison is just starting to experiment with how it can make a profitable business off of electrifying rural India. Other startups have already spent years on this issue. The co-founder of two-year-old startup Mera Gao Power told me recently that Mera Gao Power is about a month away from generating enough revenues from their solar-power microgrid service in villages in rural India to cover all of their company’s costs. It took them about two years to work through the market kinks, like how to price and market the service to villages.

I am really eager to see profitable business models built off of providing clean power to off-grid communities in rural areas. Beyond the business benefits for the companies, these villagers can raise their standard of living by having more reliable and more low cost electricity at night (kerosene is a dirty and expensive power source), and they can also use solar to charge their cell phones at their own convenience.

Building solar microgrids for villagers also seems like the right approach, as Mera Gao Power discovered. The one-off solar lanterns haven’t been able to penetrate these markets all that well because the lanterns are still too expensive for an upfront payment. But by electrifying the whole village, a company like SunEdison or Mera Gao Power can sell the solar system as a service, deferring the cost of the system over years. Mera Gao Power sells solar electricity with LEDs and a cell phone charger for 25 rupees per week. That’s less than villagers are commonly paying for kerosene and cell phone charging.

Outside of rural solar projects, SunEdison, has already brought online 45 MW of solar projects in Gujarat, including a 25 MW solar plant in the solar park in Patan.

Image courtesy of SunEdison.

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The 11-person company has been rocking it lately, and is finally on track with a product that their customers want, enough experience in the marketplace to make the business work, and a recent $300,000 grant from USAID that is helping the team expand. By the end of 2012, Mera Gao Power wants to have electrified 70 villages with its solar panels, cell phone charging service, and distribution lines and potentially raise another round of funding from an impact investor to scale the business even more.

But things weren’t always so sunny for the scrappy U.S.-born co-founders — Jaisinghani and Brian Shaad — who met in Nigeria and originally were interested in finding a way for Nigerian villagers to use the natural gas that is unearthed in oil recovery but is usually burned off and wasted. Instead the two went off to India, with little experience with solar technology, but with the idea that an electrification product needs to be sold as a service that is paid off over time, instead of sold via a high upfront fee that requires a microloan.

Know your customer

When the two began to design the solar microgrid product in 2010, they were planning on having it just offer lighting. But Jaisinghani says after they installed it in one village they quickly learned that lighting wasn’t enough: “We couldn’t stop people from charging their phones on the systems,” says Jaisinghani. Cell phone charging was clearly a necessity.

The entrepreneurs then wondered if they could set up solar-powered cell phone charging stations in the villages to address the cell phone power need. But Jaisinghani says they discovered that people really wanted the convenience of charging the phone in their own homes. “It’s the same with us in our own houses; they just want it to be easy and to work,” says Jaisinghani.

The entrepreneurs modified the product to include phone charging and lighting, but stopped at adding on enough power to be able to run a TV or fan (more panels and batteries add more cost to the system). Eventually they realized that 7 hours of power, and 25 rupees per week was the optimal set up for both the customer and the business.

One microgrid system that can electrify about 50 households costs $1,200 and includes two solar panels, two batteries and four distribution lines. Each house that signs up for the service and pays the subscription and a small connection fee, gets two LEDs and access to the system. Jaisinghani says that there’s no problem with demand once the system is installed and that at least a quarter of the villagers commonly sign up for the service before its even connected.

Mera Gao Power’s potential customers are commonly paying 30 rupees a week for kerosene and cell phone charging. So the 25 rupees per week price point is not only lower, it’s also combined with the convenience of home charging and not having to trek to the market to buy kerosene, as well as enabling customer to avoid some of the nasty side effects of kerosene use (air pollution in homes and it can be unsafe).

The field as the lab

It took Jaisinghani and Shaad awhile to figure out the perfect price point. In one of the first villages they made the mistake of starting out the service by negotiating the power ceiling and price with the villagers. Later on that put them in a vulnerable position when the villagers came back and wanted more power for less money. The ended up removing that system.

In another of the early villages the group worked with a local villager who acted as the collection agent of the weekly-fees. However that proved to be a tricky situation, because if a household didn’t pay the fee they had to be disconnected from the service. The villager-turned collection agent wasn’t too keen on disconnecting his own neighbors, and also had a penchant for tweaking the system to offer 24-hour power, which killed the batteries. “I don’t think we realized how little knew about the market. We were naive,” says Jaisinghani.

Jaisinghani also learned that non-governmental agencies don’t exactly make good startup partners. “NGOs have their place in this spectrum but they’re not well suited to be partners in this enterprise. They don’t have enough control over their field level staff,” says Jaisinghani.

After all of these trials and tribulations the co-founders, which were funding the company our of their own pockets, at one point last year were going to closing up shop. “We’d run out of money and we were going to fold,” says Jaisinghani. Then the USAID grant came in and offered a lifeline.

Getting it right

Today Mera Gao Power has electrified 13 villages and Jaisinghani says the villagers are happy with the service and the company is meeting its growth and revenue targets. For the rest of the year the team will focus on managing sustainable growth and doubling the amount of villages it electrifies by five.

Down the road the company plans to close more funding, and eventually maybe even bring in a more experienced CEO, says Jaisinghani. If a new CEO comes in, Jaisinghani says he and Shaad could spend their time working on ways to economically enable the microgrid product to add TV and fan-power.

And for next year? The co-founders will finally start getting paid.

Images courtesy of Anna da Costa.

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