Smart Power India’s Demand Generation Manual for Solar Mini Grids

Reliability is key to productive use of electricity and economic development of rural communities

Smart Power India (SPI) today released the findings of its ‘Demand Generation Manual for Solar Mini-grid.’ The objective of this manual is to suggest ways to generate demand for solar mini-grids and increase the electricity consumption among underserved rural communities for better social and economic development.  The mini-grid sector has played a critical role in providing access to reliable electricity in rural  in India. Reliability of electricity not only enhances the lighting and productive uses but only spurs micro-enterprise activities in the villages. The energy service companies (ESCOs) running mini-grids need to focus on meeting rural India’s existing power demand along with building additional demand for power by supporting the development of local micro-enterprises to ensure financial viability and economic growth.    

Speaking about the launch, Jaideep Mukherji, CEO, Smart Power India said, “India has made phenomenal strides in achieving universal electrification. It is indeed a welcome development that due to the government’s persistent efforts, all villages in India have been electrified and today, almost 100% households have received electricity connections. Now that the government has achieved this commendable feat, it is time to shift attention to the next electrification challenge of providing reliable electricity supply not just for lighting purposes but also for productive use.”  

Despite significant strides in the universal village and household electrification, electricity consumption has not seen much improvement. The gap is majorly a result of mismatches between characteristics of demand and supply. Mini-grids have been greatly successful in bridging this gap in rural areas with reliable electricity supply. A rural mini-grid distribution network extends 1-2 km from the plant, providing electricity to 100-140 households, 50-60 shops, and a mix of productive users. Demand Generation Manual for Mini Solar Grid aims to address the relevance  of electricity for productive use by creating adequate demand among customers.

Key demand generation strategies:

Demand generation strategy is a means to create awareness among potential customers about the mini-grids and to help Energy Service Companies (ESCOS) generate revenue to sustain their operations. This then leads to a triple-win: a win for the households, a win for the rural micro-enterprise and a win for mini-grid operators.

a)     Creating awareness among potential users: Communication plays a dominant role in shaping demand, addressing barriers, communicating benefits, and acquiring consumers – for mini-grids. In recent years effective communication has evolved from sporadic awareness-raising information, education, and communication (IEC) activities to strategic, evidence-based behaviour change communication (BCC) strategies. The change has come about with the realization that as socio-cultural and gender norms influence individual behaviour, the need to mobilize communities in support of recommended behaviours is imperative. For mini-grid projects, the ESCOs need to design a communication strategy that targets individuals, households, and the community separately so that behaviour changes can be stimulated.

b)     Target underserved but high demand regions/ communities: Targeting a high demand area is critical for generating adequate demand. A robust site selection framework should be able to estimate the potential demand of the village as well as provide inputs to the demand generation strategy. The critical factor for the success of any solar mini-grid is its reliability in meeting consumer demand cost-effectively. At the core of the framework is the generation of electricity demand to ensure that the mini-grid is sustainable, scalable, and attractive for an ESCO.

c)     Demand generation for existing loads: Existing energy users meet their needs from sources like kerosene, solar home systems, diesel generator sets, and government grid. The electric appliances used by existing energy users are defined as existing loads. Most of the households, shops, commercial establishments, and institutions can be classified as an existing load. A significant consumption is for lighting, fans, and mobile charging. Well-to-do households and bigger shops may use other electric appliances like television, computers, refrigerator, mixer grinders, and geysers. Meeting energy needs of existing loads are for two customer segments: (a) households and (b) shops. The types of loads are typically lighting, fans, TV, and mobile charging. Targeting the existing load is an entry point activity for the ESCO and can be done quickly. Tapping these loads is essential for demand degeneration.

d)     Demand enhancement through energy efficient appliances: Meeting the needs of energy-efficient appliances contributes up to 40 to 45% of the total demand for electricity of the mini-grid. The introduction of energy-efficient appliances (EEAs) creates numerous additional benefits for both the consumers as well the ESCOs.

“The Demand Generation Manual outlines  the importance of electricity for productive use by creating adequate demand among customers. An increase in demand for electricity not only improves the quality of life but also helps in enhancing the incomes.” added Mr Mukherji.  Mini-grid have the potential to be a significant driver of rural development, unlocking latent economic potential and livelihoods, while simultaneously enabling aspirations for improved quality of life.

Link to the full report: Demand Generation Handbook

About Smart Power India (SPI)

SPI, a subsidiary of the Rockefeller Foundation was established in 2015 to develop and scale sustainable models to accelerate electricity access and spur economic development amongst the rural underserved communities. It is committed to create knowledge and accountability in the public domain through robust evidence-based research and provide field and analytical support the Government, private sector, implementers and other donors in their pursuits for rural electricity access.  SPI develops and disseminates relevant knowledge in rural electricity access and services space with an aim to promote research and innovation and partners with policymakers, practitioners and academic institutions to come up with actionable insights and innovative strategies. While SPI’s work covers the spectrum of supply and demand-side issues of rural electricity, its focus is the last-mile customer. SPI exchanges knowledge by promoting and facilitating platforms for networking, knowledge sharing and collaborative research, networking, knowledge sharing and collaborative research.