1. Off-grid PV – Policy and Regulatory enablers
September 3-5, 2012, Bangalore India

2. About RESolve
• Advisory firm with strong capabilities in Strategic, Regulatory , Commercial and
Technical aspects of renewable energy projects
• Founded by professionals from India and Germany with strong global exposure
• Specific focus on Solar PV and Wind in India
• Offerings in
– Advisory on Concept-to-Commissioning of PV projects
– Policy and Regulatory advice
Off-grid PV 2

3. Overview
1. Introduction
2. Policy and regulatory environment
3. Challenges
4. Possible enablers
Off-grid PV 3

4. Why Off-grid?
• About 30% of India’s population(400 million) do not have access to electricity.
• Over 90% of this population live in villages.
Already electrified villages
163,641
De-Electrified villages
356,393 Un-Electrified villages
90,684
27,878 Un-Qualified villages (very less
or no population)
• Electricity transmission losses >30% (one of the highest in the world)
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5. Type of off-grid customers
.
PV as an alternative to Rural Urban
Kerosene Lanterns, Home lighting, Home Lighting
cooking
Diesel Diesel water pumps Diesel generators
Free/Subsidized Water pumps
power
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6. Overview
1. Introduction
2. Policy and regulatory environment
3. Challenges
4. Possible enablers
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7. JNNSM Goals and Policy support
• Off-grid PV systems target – 2 GW by 2022
• Solar lighting – 20 Million households by 2022
• Policy support
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8. Regulatory support : Off-grid RECs
• Two models likely
1. Regular model - Power producer sells RECS at the exchange in addition to selling power at
mutually agreed price
2. Franchisee model - Power producer to
i. become a franchisee of a Discom
ii. supply to the rural consumer as per the state electricity regulatory commission
determined rates
iii. The Discom pays the franchisee for the power generation and fulfills its RPO.
But, what about metering? More clarity needed..
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9. Overview
1. Introduction
2. Policy and regulatory environment
3. Challenges
4. Possible enablers
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10. Challenges – Big systems(>10 kW)
1. Technical 2. Financing 3. Others
• Service centers and • High initial cost • Subsidy disbursal
technical assistance for timescale
the installed products • Financing
• Installation issues like
structures
• Lack of local workforce
for assistance
• Operation and
maintenance cost
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11. Challenges – Small systems(<10 kW)
1. Technical 2. Financing 3. Institutional
• System specifications • Capital subsidies • In some cases, banks
– Customization difficult like NABARD add
– Reduces choice and one more level of
innovation possibilities • Margin requirements
bureaucracy
– Energy on loans
• Synergies across
• Benchmark cost ministries
– Framed for AC systems
– Not suited for DC
systems
• Servicing and
maintenance cost
The ideas are elaborated by SELCO in the document The National Solar Mission – A practitioner’s Perspective
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12. Overview
1. Introduction
2. Policy and regulatory environment
3. Challenges
4. Possible enablers
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13. Enablers– Big systems(>10 kW)
1. Technical 2. Financing 3. Others
• National level • Encourage retail • Reduce subsidy
Certification similar to financing for off-grid disbursal timescale
PV Installer systems by banks
Certification by North
American Board of
Certified Energy
Practitioners(NABCEP)
• Standardizing off-grid
systems to reduce
engineering cost
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14. Enablers – Small systems(<10 kW)
1. Technical 2. Financing 3. Institutional
• Avoid specifying • Decentralized • Elimination of tiered
components so as to procedures and localized subsidy disbursement
facilitate customized financing to provide ease procedures
solutions of access to capital • MNRE acts as single
window for subsidy
• Benchmark costs to • Reduction in margin disbursement
be avoided (or) requirement on any loan
• All subsidy claims by
• Benchmark costs to taken for off-grid regional bank branches
include cost of off- applications to be processed by
grid solar and • Eliminate complications MNRE
maintenance costs of loan procurement by • Transferring subsidy
diverting ALL subsidies disbursement duties to
towards soft loans NABARD at a later
instead of capital stage
subsidies
The ideas are elaborated by SELCO in the document The National Solar Mission – A practitioner’s Perspective
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15. Support for Innovative business models
Pay-as-you-go -Example :Simpa Networks
• Metered solar energy system
• Installed in rural homes
Model
• Purchased for a small upfront cost
• Like ESCO model – recharged by SMS by local agent
• If meter runs out, it switches off and comes back once the user recharges the system
• After 3-5 years, once enough recharges are done the system gets unlocked and the user gets free
access to electricity.
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16. PV Vouchers instead of Kerosene through
Aadhar(UID)
- Government
Part of
Kerosene
Subsidy
Off-grid
MNRE Fund
Channel
PDS
Partners
Recharge
Code
End User (Rural Solar
Customers) Code Meter
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17. The biggest enabler – removal of subsidies!!
Kerosene LPG
PDS kerosene price - Rs.14.83/Litre
LPG Domestic cylinder - Rs.399/Cylinder
Government Subsidy : Rs.0.82/Litre Government Subsidy : Rs.22.58/Cylinder
OMC under recovery : Rs. 32.70/Litre OMC under recovery : Rs. 346.79/Cylinder
(Price in Delhi Effective Sept 1, 2012) (Price in Delhi Effective Sept 1, 2012)
OMC Under-recovery
OMC Under-recovery
2010-11 : Rs. 21,772 Crores
2010-11 : Rs. 19,484 Crores 2011-12 : Rs. 29,997 Crores
2011-12 : Rs. 27, 352 Crores
Diesel Free/subsidized power
OMC Under-recovery Examples
2010-11 : Rs. 34,706 Crores • Tamil Nadu(for farmers)
– Rs. 1950 crore (2012-13)
2011-12 : Rs. 81,192 Crores
– 25.5% total power solar in TN goes to agriculture
• Andhra Pradesh
– Rs. 4200 Crores(2011-12)
– Rs. 5530 Crores(2012-13)
Total Under-recovery on fossil fuels ~ Rs. 138,500 Crores(2011-12) – Equivalent to 13.8
GWp of solar Projects(@ Rs. 10 Crore/MWp) – Wishful thinking?
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18. Thank you
Madhavan Nampoothiri
Founder and Director
madhavan@re-solve.in