From rooftop units to desert electricity plants, India is harnessing solar power to reduce emissions and fight poverty.
Jerri-Lynn Scofield | September/October 2012 Issue
As I stepped off the train in Ahmedabad, the financial capital of the Indian state of Gujarat, the temperature topped 100 degrees Fahrenheit. It wasn’t yet 10 a.m. The river Sabarmati would dwindle and often die away as it passed through the city this time of year. Public gardens were empty; it was too hot to sit outdoors, let alone stroll about. Construction workers, cycle rickshaw wallahs and other outdoor workers coiled water-soaked cloths around their heads while boys stripped and dove into any source of open water, no matter how green-glazed or rubbish-choked. The rest of us swathed ourselves in whisper-weight clothing and did our best to stay out of the midday sun. Temperatures like these make you yearn for the cooling rains of the monsoon season. In the preceding weeks, I’d welcomed the monsoon to Mumbai, and then Delhi, but here there was still only shimmering heat haze.
I struggled to keep up with the porter, who was hefting my bags past hundreds of passengers sitting, squatting and sprawling on the open platform, waiting for their trains. Perspiration basted my face and dripped slowly along my spine, soaking my loose cotton clothes. The intense heat may make for uncomfortable traveling, but the same sun that roasted me that day is also beginning to meet India’s insatiable demand for power—without increasing the country’s carbon emissions. The country’s national solar policy promises to develop new export markets for manufacturers and services, and some predict it will create a million new jobs over the next decade. Just as importantly, other initiatives are bringing solar power to India’s poor, helping them transform their communities, businesses and lives.
India is already one of the top five global greenhouse gas emitters, and its vast need for power is growing. “If India supplies its energy needs with conventional power generation, the resulting pollution will poison big stretches of the country,” says Gilbert Cohen, president and CEO of Eliasol Energy, an engineering and consulting firm specializing in renewable energy. “Solar is a solution for a global problem. India can be a world leader, as it has the technical and industrial resources to attack the challenge.”
The Indian government seems to agree and is developing an innovative solar policy that could help the country meet domestic power needs and also make lower-cost solar power more widely available abroad. In 2008, Prime Minister Manmohan Singh committed India to meeting 10 percent of its national energy needs through renewables by 2020. A year later, the Jawaharlal Nehru National Solar Mission (JNNSM) was launched to increase domestic solar power and to enhance the competitiveness of Indian companies in the world market. “Indian companies have the potential to become game-changers in terms of cost reduction in cutting-edge solar technology,” says Martin Schlecht, managing director at Suntrace, a German company that helps developers site and configure solar projects worldwide. “India has a huge domestic market but also the potential to market these technologies and know-how internationally.”
Cost is still an issue since conventional power is, at present, cheaper than renewables. But these calculations do not take into account the hidden costs of burning fossil fuels, both in terms of resource extraction and carbon emissions. Once these so-called “externalities” are factored in, renewables look a lot more cost-effective. Solar costs are dropping rapidly and, for India, “grid parity”—the point at which the costs of generating solar energy match those of conventional power generation—should arrive by 2017, according to Santosh Kamath, executive director of advisory services, KPMG Advisory Services Private Limited.
Once grid parity is achieved, the demand for solar power is expected to rocket. Many states are not waiting for this milestone to commission solar projects independently of the JNNSM. Gujarat, for example, is due to come on stream by the end of 2013 with 966 MW of capacity (enough to power the peak electricity needs of a city of 6 million people during the hours the plant operates). Maharashtra has contracted the construction of a 125 MW solar facility (enough to power 200,000 households), which will help supply some of Mumbai’s power needs. And Lakshadweep, an archipelago of coral islands that forms the northernmost part of the Maldives chain, has stepped up its reliance on solar power. Both the national and Indian state governments are scaling up their renewables targets. “As coal prices increase and solar plant prices go down, in the long term it’s better to have a solar project than a thermal project,” says Ketan Shukla, secretary of the Gujarat Electricity Regulatory Commission.
The ruins of the gray granite ramparts of Golconda Fort—financed over centuries by extracting legendary diamonds such as the Koh-i-Noor, the Hope and the Wittelsbach, from what were then the world’s only mines—still loom above the southern Indian city of Hyderabad. Today, technology rather than gemstones fuels its economy. The city has already become a hub for solar technologies. Companies like Photon Energy Systems, Solar Semiconductor, Titan Energy Systems and Andromeda Solar manufacture solar modules and cells used in photovoltaic (PV) solar production. The JNNSM imposes a 30% domestic content requirement, so most of these components are destined for domestic use. As a result, Indian production won’t have much of an impact on worldwide PV costs, as production closely follows prices for raw material inputs.
It’s in the area of concentrating solar power (CSP) technology that India offers the greatest potential for both supplying domestic power needs and bringing down worldwide solar power costs. India’s role in the IT sector offers a potential parallel. Few foresaw the transformation that occurred when Indian companies first got involved in IT. “Then ‘outsourcing’ became a fashionable word worldwide,” says Venkittu Sundaram, managing director of Sun Protecs, a renewable energy consultancy. India has a similar potential in CSP manufacture, which relies on proprietary technology owned by European, Israeli and U.S. companies. If Indian firms can make products of the same or better quality at a cheaper price, cash-strapped European governments like Germany and Spain, with proven commitments to solar energy but an aversion to high costs, might reaffirm their commitment to solar projects.
Outsourcing the manufacture of solar technology has already triggered some backlash, so far mainly directed at Chinese solar panel producers. Cost considerations will likely trump such concerns. “Worldwide, electricity regulators seek cost reduction. Their first priority is looking out for their customers,” says Eliasol Energy’s Cohen. “They’re going to be open to low-cost solutions, whatever their source.”
The huge deserts of Rajasthan and Gujarat are prime sites for large-scale CSP projects, which require high levels of direct solar radiation. These states are already gearing up their own solar projects, both to meet state needs and to sell excess power to other Indian states. At the moment, only small PV facilities are up and running. But Asia’s largest solar farm, a thin film PV plant of 30 MW capacity (enough to power 50,000 homes), was inaugurated last October in the Banaskantha district of Gujarat, and by March 2012, the state will have installed almost 300 MW in solar capacity (enough to power 500,000 households). Facilities have sprouted in Andhra Pradesh, Haryana, Karnataka, Punjab, Rajasthan, Tamil Nadu and West Bengal. These small plants feed into the national electricity grid, where they supply a tiny proportion of India’s current power demand.
There remains a vast gulf between discussions of megawatt solar power plants and the needs of India’s 500 million rural poor, many of whom still lack access to reliable electricity supplies. Per capita income for the poorest Indians—largely concentrated in eight states—is less than U.S. 50 cents per day. While the percentage of India’s population living below the poverty line has more than halved since the early 1970s, the absolute number remains unacceptably high. “The paradox is that India is an over and underdeveloped country at the same time,” says Harish Hande, managing director and co-founder of Solar Electric Light Company (SELCO). “Poor people need reliable energy sources to survive.”
So far, large-scale power projects have had no measurable impact on poverty alleviation, according to Hande, who co-founded SELCO in 1995 to address exactly this problem. So he set out to prove that access to solar energy could do just that. But first, he realized, the poor had to have access to financing in order to buy solar systems. SELCO worked with banks in the state of Karnataka to develop funding models.
While the poor largely lack assets, they do have regular, albeit minuscule, cash flows. Pushcart vendors, for example, who sell goods on city streets, receive money daily. Garment workers and women who work at home—making incense or hand-rolled cigarettes—have weekly cash flows. And paddy farmers operate on an annual cycle. “The key is to match the actual cash flow to the payment,” says Prasanta Biswal, senior manager at SELCO. The company’s funding models have allowed 125,000 households in Karnataka and Gujarat to purchase their own solar systems. SELCO has also installed solar systems in 5,000 institutions in the same two states.
An hour’s drive from the cacophony of Ahmedabad brought me to the tidy farming village of Hirapur. The stillness of the afternoon was broken only by the occasional whoop from one the black-faced Hanuman’s langurs or the intermittent scream of a peacock. Although the heat was less intense outside the city, the villagers too—like everyone else in Gujarat—were eager for the monsoon to arrive. Two SELCO employees—Gopal Kumar Singh, assistant manager of energy services, and Naresh Bhai Paramar, a technician who installs and maintains solar systems—acted as my guides and translators.
Like many Indian stories, this one begins with a wedding. About five years ago, just before the marriage of their elder daughter, Chandiji Paramar and his wife Champa Ben decided to install a SELCO solar system. Hindu marriages must take place at night, and Chandiji and Champa wanted bright lights, not dim kerosene lanterns, to shine on the celebrations. I visited four households, clustered within walking distance of each other, that had similar systems. Weddings triggered three of these installations. “Our families thought, if there was light, it would be good for the festivities,” says Sita Ben, another system owner. “Marriage is an auspicious event to have a new thing in the home.”
SELCO installs the 12-watt systems and provides maintenance services. Villagers finance the systems via loans administered by SEWA Bank, the financing arm of the Self Employed Women’s Association (SEWA), a large Gujarati worker’s cooperative. The loan term varies from 15 to 18 months; the interest rate is 10 percent; and the most basic system costs about $6 per month, according to Singh. Most of these simple systems power a single portable light, but they may also be used to operate a radio.
Villagers in the region typically earn income by raising water buffaloes for milk and growing fruits, vegetables and grains. They still perform much work by hand. Some younger men work outside the village in low-skill jobs. Solar power facilitates village work. Because the solar lights are so portable, “I can use the light in my field and work late at night,” says 55-year-old Bamaji Paramar while smoking a cigarette, his steel gray hair and handlebar mustache setting off a face lined by a lifetime of farm labor in full sun. He also no longer needs to buy 10 liters of kerosene per month to fuel lanterns, and he, or a family member, is spared spending a full day each month shuttling to and fro on local transportation to fetch that fuel.
Pardi Ben also sees a financial upside to solar. “With solar lighting,” she says, “we can separate good vegetables from bad at night, for sale in the morning. The work day gets lengthened by two or three hours.” Her family also makes handmade mattresses and can now work into the evenings.
Others have invested in solar so their children can study at night. All Indian children, at least in theory, can attend school through the equivalent of 10th grade. During that year, students must pass exams to be allowed to continue their schooling. Completing additional schooling, passing more exams and further higher education is the surest route to getting a good, nonfarming job. Pardi’s son, Gautam Paramar, failed his exams in part, he believes, because he couldn’t see properly enough to study at night. Prospects for the younger members of his family are now better. “My younger brother can study at night without hurting his eyes,” Gautam says. Champa Ben, too, believes the lights make it easier for children to get better results at school.
Since the first SELCO system was installed in 2007, grid power has come to Hirapur. But villagers haven’t abandoned solar. In fact, others have taken out SEWA loans to finance new systems. After the loans are paid off, the marginal cost to use solar systems is zero. So villagers use solar lights before turning on grid-powered lights. A fully charged light may be used for up to five hours. In Gujarat’s sunny climate, it’s possible to charge lights fully for more than 300 days per year and partially for about 35 days more. The basic solar systems SELCO installs in Hirapur are too small to run TVs, fridges and satellite dishes, so those villagers who can afford such appliances must rely on the grid.
“When we set up SELCO,” Hande says, “we wanted to destroy three myths: that the poor cannot afford technology, that the poor cannot maintain technology and that you cannot cater to social needs via a for-profit venture.” So far, he’s doing pretty well on all three counts. SELCO’s experience has shown that technology can be made affordable for the poor, the technology can be properly maintained, and viable, profitable ways can be found to meet social needs. Hande believes this model can be deployed outside India, in Africa and Latin America, for example.
On the overcast morning of my last day in Ahmedabad, I sat inside the control room of the state’s 1 megawatt solar demonstration plant. Despite the cloud cover, the plant was converting solar energy into power and feeding it into Gujarat’s electricity grid. Sagarkumar Agravat, a scientist with the Gujarat Energy Research and Management Institute (GERMI), explained the state’s ambitious plans to construct a rooftop solar capacity of 5 megawatt, enough to power a small urban neighborhood. Under the scheme, homeowners will lease their rooftops to developers who will install solar panels to generate electricity for the state’s grid.
Gujarat’s plan is only one of many schemes for ramping up rooftop solar, with installations also expected to accelerate once grid parity is achieved. KPMG predicts that, by 2022, India’s residential rooftops will generate nearly as much solar power as the country’s large-scale grid-connected solar power plants. “Rooftop solar can potentially transform the energy landscape,” says Anand Jain, associate director of energy and natural resources, KPMG Advisory Services Private. “Ultimately, the hope is that people will have microsolar plants on their roofs, which will be a significant step toward a more sustainable way of living.”
If India can successfully scale up its solar ambitions, the country could prove that solar power offers a superior alternative to fossil fuels to meet some energy needs. This green energy source could be available at lower cost as well as without the harmful environmental consequences.
On my last evening in Gujarat, as I rushed to catch my train, the weatherman predicted the refreshing monsoon was finally on its way. I welcomed the news, as most locals probably did, knowing that the arrival of the annual heavy rains won’t dampen India’s solar promise.
From rooftop units to desert electricity plants, India is harnessing solar power to reduce emissions and fight poverty.