India's energy woes: distributed solar energy generation is the solution

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In 2013, India produced 1102.9 TeraWattHours of electricity. In fact, India is the 3rd largest electricity producer in the world after China and US. Sounds like a lot, but as anyone who has experienced that Indian summer ritual of a 'power cut' will tell you, it is just not enough. India has an annual energy shortfall of about 7%. This is despite the fact that per capita consumption of electricity in India is way too low, even when compared with countries in similar stages of economic development. To put that in perspective, very simplistically:

Average per person electricity usage in Brazil is 3 times and in China it is 4 times, the per person usage in India.

We will not even go into comparisons with more developed countries. However, it is very clear, had it not been for scarcity of electricity the energy deficit would be much higher. And as India moves further along the development curve the per capita consumption is only going to rise. It is not as if India has not worked on increasing electricity production. In 2013, electricity generation capacity increased by 2%. But as the deficit and per capita consumption numbers show, the capacity addition has just not kept up with increase in demand.

If we continue relying on conventional sources of energy such as coal, oil, hydro and nuclear, there is no way the gap between demand and supply can be closed. After all, not many rivers are left to dam without displacing entire populations, coal is limited in supplies and too inefficient, oil is worth its weight in blood and nuclear is too dangerous. Thankfully, the same summers which bring us 'power cuts' also remind us unequivocally that we have not yet tapped an enormous energy resource - the Sun. And solar energy has rightly been promoted as the solution to India's energy woes. As claimed in an often quoted statistic from a leading consultancy firm:

A square piece of land in the Rajasthan desert with each side of 55 km can be tapped to generate enough solar power to equal the existing power generation quantum in India.

The Rising Sun, KPMG, May-2011

Although, we do not completely agree with this estimate - but that is a topic for another post, by and large they make the right point that solar energy is the solution to India's energy problems. However, even if by some magic we were able to put up such 'super power plants', our antiquated grid is just not capable of getting that electricity to the people. Another statistic:

In India, average grid transmission & distribution losses are more than 33%.The world average is less than 10%.

So, even if we were able to produce sufficient energy, we will further need trillions of rupees to upgrade the grid to transmit and distribute it. According to some estimates, India needs 200-400 Billion $ to upgrade its electricity grid. Thus, a practical near future solution must not be too dependent on the grid and that is why, distributed solar generation is the only realistic solution. Lately, Indian authorities seem to have come to the same conclusion and incentives for distributed solar are starting to catch up to those available for large scale installations. A lot more still needs to be done.

However, more than just government support there are other barriers to mainstream adoption of distributed solar that need to be addressed:

  • Providing tools for accurately predicting financial returns for small scale projects, as available to large scale solar installers.
  • Easy access to initial capital needed for installation.
  • Ongoing monitoring and maintenance to ensure the installed projects produce expected returns.

In our next posts we will lay out how the EnerMark business model addresses all of the above. In the meantime, please do let us know your questions/comments.




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