India has become a hot bed of solar activity, thanks to the country’s booming economy, the problems with the domestic coal industry, and the country’s strong solar incentives. And while many of the solar projects are being connected to the grid to generate power for cities, some companies are looking to build businesses off of solar for off-grid rural India — including solar developer SunEdison.
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.