DRE Finds A Footing In India, Powered By Solar

Laxmi Bhuyan is a 58-year-old woman from the Sindiba village in the Gajapati district of Odisha. This tribal village, with swatches of fertile land around the village periphery, bolstered the local farmers to grow different fruits and vegetables around the year. However, the raw fruits often yielded low prices for the producers. On the other hand, erratic electricity supply made storing it in any electrical appliances tough. Many in the village didn’t find agriculture a viable livelihood.

However, in 2021, solar dryers made their entry into the village and changed their fates soon. These were fuelled by decentralized off-grid solar panels. Farmers like Bhuyan and others started using this technological intervention to increase their incomes. Bhuyan said that drying these farm produce with solar dryers helped them fetch better prices. Moreover, when the solar company also took care of the assured offtake of the dried produce from the farmers of Sindhiba, the cumbersome task of regularly taking the farm produce to the market to sell also became redundant.

“There are several benefits with the solar dryer. First, drying our products with this is faster than conventional open-field drying. Second, it helps us to get rid of the headache of insect and worm attacks. Although these dryers use power, we don’t depend on the erratic grid electricity, thanks to solar panels. Solar energy helped us to ensure continued operations of the dryers,” Bhuyan told Saur Energy.

Like Bhuyan, several others are reaping the benefits of the DRE (distributed renewable energy)  technology. She also said that while a kg of fresh banana can fetch anywhere between Rs 20 in the market, income from dried banana parts can give her around 10-15 times the price. It also helps them sell crushed or ruptured fruits like mangoes at a better price, often treated as waste in the market.

Like Bhuyan from Odisha, there are myriad examples of success stories from across India on how the DRE solutions, primarily fuelled by solar energy, are changing the lives of several rural farmers, entrepreneurs, rural industries, and others.

Several energy companies and philanthropic organizations like Selco Foundation, Shell Foundation, Villgro, Hero Energies, and others are often seen multiplying the scale and varieties of these technologies.

Many startups and cleantech companies are also trying to tap the market. Several of these DRE solutions, like solar dryers, solar-based milk chillers, blowers, poultry machines, cold storage, vertical fodder gardens, refrigerators, deep freezers and others, have entered India’s hinterlands and made tangible changes.

Perhaps, the most notable has been Tata Power’s collaboration with the Rockefeller Foundation, Tata Power Renewable Microgrids (TPRMG).

A wholly-owned subsidiary of Tata Power, TPRMG was launched in October 2019, for setting up Renewable Microgrids to supply clean, affordable, reliable and quality power supply to rural India. So far, around 200 Microgrids have been  commissioned in the states of Uttar Pradesh and Bihar. A pilot Microgrid programme was also underway in Odisha when we last checked. The firm has a goal to roll out 10,000 Microgrids.

These Microgrids , set up initially to take care of basic needs such as lighting loads (bulbs, LEDs), cooling loads (Fans) and Appliance loads (TV, Fridge, Mixers, Mobile chargers, etc.) are pushing hard to evolve as user needs change. Hence the focus on powering Motive Loads ranging from 3 HP to 10 HP (Telecom Towers, Flour Mills, Rice Hullers, Oil Expellers, Masala Pulverisers, Bulk Milk Chillers, RO Plant, Irrigation Pumps, etc.). The company is also targeting to run captive loads in the range of 15 HP to 22 HP (Timber cutting machines, Sugarcane crushing machines, etc. and Rural MSME Industrial units (Ice Cream Factory, Bakery Factory, Printing Press, Utensil Manufacturing Plant, etc.).

TPRMG also has the benefit of tie-ups or collaborations with  financial institutions such as the one with SIDBI (Small Industries Development Bank of India) to launch 1,000 green energy enterprises across the country to promote sustainable entrepreneurship models and empower rural entrepreneurs in the country.

A notable success story that TPRMG has shared is its Chhattisgarh experience. Here, it worked with the Chhattisgarh Renewable Energy Development Agency (CREDA), to set up more than 100 mini-grids to provide energy access to several tribal and remote villages where grid infrastructure was almost redundant. The company claims that it helped to take up solar power to over 400 villages. The mission is said to have impacted the lives of around 10,000 people, improving their small business, school education and other energy-dependent works.

The industry perspective

Maharashtra-based Atul Chimle is the partner of Coolcrop Technologies Pvt. Ltd and founder of Ecopath Renewables Pvt. Ltd. CoolCrop primarily promotes cold storage for main farmers through Farmers Producer Organisation (FPO). It creates customized solar cold storage solutions for rural areas to aid farmers in reducing their transportation costs and maximizing their incomes.

Chimle admits that off-grid solar is often around 30 percent costlier than grid power due to the involvement of panels and battery backups. Still, many pockets of India require such off-grid solutions. “In many rural areas, electricity is scarce. Many farmers growing vegetables often find it tough to use grid electricity to store their products in their areas. Most of the cold storages are located in cities and take produce only in bulk quantity, thus leaving aside many small and marginal farmers. We are trying to bridge the gap. We provide cold solar storages in the village so that they can keep the produce in their local areas, reducing transportation costs and ensuring consistent power to store these,” Chimle told Saur Energy.

He said Coolcrop’s work has helped many farmers to store their perishable vegetables and fruits and sell them at the right time to maximize their outcomes. However, he admitted that in most of these cases, Corporate Social Responsibility (CSR) funds come as a rescue to fund such projects, which is often a hurdle for this segment of farmers.

“These FPOs representing several farmers often pay around 30 percent of the funds for such solar cold storages whereas 70 percent of the funding comes from such grants like CSR funds. The higher upfront cost is still an issue. Moreover, off-grid-solar cold storage still does not get government subsidies. These government grants are often confined to cold solar storages above 5 MT of capacity,” Chimle said. He, however, claimed that with the optimal utilization of the DRE solution, the end users can get the Return on Investment (ROI) within 3-4 years.

Ashutosh Verma, Founder of Exalta, claimed that the Return on Investment (ROI) period for off-grid appliances is often faster if the end users imbibe the practice of energy efficiency in their projects. Exalta offers several off-grid solutions like solar refrigeration, solar air conditioners, and advanced batteries for such systems. Verma told Saur Energy when they sell its off-grid solutions, they also try to bundle it with energy-efficient appliances of the end users, like promoting BLDC fans, energy-efficient solar ACs and others.

“Generally, the ROI in conventional cases could be around three years but with energy efficient measures; this could be reduced to 18 months. We often try to persuade the end users to amend their appliance management ways and ensure maximum use of energy-efficient devices so that the solar energy could be used at the optimal level,” he said.

Like Chimle, Verma also lamented that there had been a dearth of subsidy support for off-grid solutions besides the burden of higher upfront costs. However, Verma claims that the off-grid market is thriving, especially in Tier I and Tier II cities and rural areas of India, due to poor quality of electricity or lack of electricity supply.

“There are positive signals of its growth. Now people from diverse backgrounds, like hotel management professionals, battery makers and others, are entering this sector. It is promising and expanding. For example, the latest case where UP announced cheaper power during the daytime and expensive power at night. It will cause more AC users to worry about their power bills. Moves like this could promote off-grid solar and solar AC and other solutions,” he said.

The rental methods

Most of the developers claimed that higher upfront costs often played a deterrent in its growth and mass adoption. So different off-grid developers have different modes of operations to make their projects and businesses viable. There are several cases of decentralized solar mini-grids running into losses due to higher costs, maintenance and other obligations.

Husk Power Systems is an international community-based solar mini-grid developer and energy service provider, operating more than 150 minigrids in the Indian states of Bihar, Uttar Pradesh, among others. According to Husk Power, their company is one of the few (if not the only) mini-grid players in the world which is profitable, with a high retention of its clients of more than 90 percent.

Rizul Choudhury, head of marketing in India for Husk Power, said that the company works primarily with Micro, Small and Medium Enterprises (MSME) in these states, providing solar energy to customers from its decentralized solar grids. The company uses its own digital platform comprised of artificial intelligence (AI), IoT and smart meters to achieve automated management.

“We provide customers with pre-paid meters which they can recharge and use based on their monthly power requirement. We have various price packages ranging from 50W to more than 5 kW. The users also have the liberty to do a top-up recharge if they want more power,” he said.

When asked how the company makes its systems economically viable, Choudhury said it requires extensive market research, power analysis, and low operational and capital costs. He pointed out that most businesses in weak grid areas operate on diesel generation, which is around 40 percent more expensive than Husk’s solar power. Husk is filling the gap for these consumers, who depend on diesel generators because of an unstable grid.

“There are different ways to make decentralized renewable energy (DRE) mini-grids viable. At Husk, we work to reduce our transmission losses and use AI and IoT based devices to reduce dependency on the human workforce for monitoring and managing our solar assets. It helps us to reduce our cost of energy and increase the the use of our power generation assets,” he said.

He said that, secondly, Husk also works intensely towards customer satisfaction. “We have given our customers a mobile app to check their real-time usage patterns and decide their consumption accordingly. This helps in bringing transparency. In many cases, fluctuating power from the grid leads to loss of raw materials during MSME production processes. We are giving our customers consistently stable voltage, to ensure seamless business operations. Many customers have now shunned diesel, a decision not taken just by keeping in mind the environment but in terms of lesser power cost they are paying now,” Choudhury said.

Tying up with rural communities

Indore-based Raheja Solar Food Processing Pvt. Ltd. is primarily extending its DRE-based solar dryers across India. Started in 2018, Raheja Solar works in a different model where they help the rural entrepreneurs and Farmer Producers Organisation (FPO) to setup solar dryers, use the same to produce dry farm produce like mangoes, bananas, pineapples, and others, and help the farmers add value  than the raw produce. A critical component of their functioning is that they tie up with their end users to ensure a buyback guarantee where they also provide uptake of their produce from the farmers and market it well.

“We provide the market linkage directly to the farmers, so they don’t need to bother with this. There are good profit margins in the dried items, which these solar dryers facilitate. So farmers have authority to sell in the local market when they get good prices, otherwise they dry these items with solar dryer to get the maximum benefit. They are used in pickles, tea, and other packaged food processing industries,’ Varun Raheja, Founder of Raheja Solar told Saur Energy. He also said that the ROI for solar dryers is shorter, in the 12-14 months range. Solar dryers use a fan run by solar panels, while thermal energy is used to dry the farm produce.

When asked about the funding of such units in rural areas and affordability issues, he said that it is often the FPOs, representing around 1000 farmers, who buy these units to increase farmers’ incomes, or in some cases, these are also funded by CSR funds.

How DRE Can Make A Difference

According to a recent report by the Council on Energy, Environment and Water (CEEW), merely 12 mature DRE livelihood technologies collectively can impact 37 million livelihoods, translating to revenue opportunities worth USD 48 billion for enterprises deploying and commercializing such technologies.

It includes DRE interventions like solar-based dryers, cold storage, silk reeling machine, high-capacity pump, micro pump, bulk milk chillers, refrigerators, looms, etc. The report said these 12 DRE livelihood technologies had impacted more than 5,66,000 livelihoods across India. The report noted that in terms of cost economics, solar-powered dryers and looms are highly attractive economically even in areas with a reliable grid supply in comparison to other DRE technologies like solar refrigerators or solar-powered horticulture professors, cold storage, and others, which cost only marginally over ten years as compared to the grid alternative.

The Ministry of New and Renewable Energy (MNRE) meanwhile, last year also came up with a slew of guidelines to ensure mass adoption of DRE solutions by asking different departments to coordinate the growth of DRE for a livelihood by bringing DRE as a key element in state livelihood missions. Minister for New and Renewable Energy RK Singh, in a press conference last week, said that the government had been mulling a special scheme for DRE too.

Lanvin Concessao, Senior Program Associate at WRI-India, an energy think tank said that standards and benchmarks are also needed to increase better financing of DRE solutions from financial institutions.

“One of the most successful products in DRE in India is the solar irrigation systems. Due to its dedicated scheme, it flourished across India and saw wider adoption. Solar pumps are one of the few DRE interventions which have seen design quality standards, benchmarks for costs and performance testing, which many of the other DRE solutions lack. If more uniformity in standardization is present across other DRE-powered productive use applications, this could also lead to better financing of these solutions in rural areas, as financing had been an issue for the DRE sector in rural areas,” Lanvin told Saur Energy. That also explains how even Tata Power has focused much more on these, having billed a cumulative 97,000 solar pumps by Q4, FY 2023.

He also opined that these DRE projects are often tried as pilot projects in many rural areas, often funded by grants, NGO, and CSR funds. He, however, said that the successful running of such projects in rural areas also bolsters other community members’ confidence to try and deploy clean energy solutions for their livelihood options.

World perspective

At the global level, several renewable and sustainable companies are investing in DRE solutions to eradicate energy poverty and aid in the upliftment of living standards, education, access to basis necessities. For example United Kingdom (UK)-based Boxx, works in African countries to give DRE solutions that  provide power to rural households, provide clean cooking fuel and also speed up deployment of solar energy in the country with more innovative solutions. It claimed that 11 out of 17 Sustainable Development Goals (SDGs) could be achieved with the access of electricity. Another leading off-grid solar energy company Sun King, based in the United States (US) which started in 2009 provides solar-powered small lamps and has expanded its network in 65 countries. It helps in design, distribution and financing of solar energy solutions for people who find it tough to access affordable grid connections. It has solar DRE solutions for home systems and solar inverters too. Close to home, Solshare is a well known Bangladesh-based firm that has enabled peer to peer sharing of power from Solar Home Systems. Bodies like GOGLA (Global Off Grid Lighting Association) have focused on specific challenges like providing solar lighting to make an impact, claiming to sell over 9 million solar energy kits worldwide in 2022.