Energy Access Business Models

Debajit Palit
Associate Director, TERI

Energy for All Investor Forum

February 8, Kathmandu

Potential vis--vis Achievement in India Off-grid lighting

90,000,000 80,000,000 70,000,000

No of HHs

60,000,000
50,000,000 40,000,000 30,000,000

20,000,000
10,000,000 0 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14

Kerosene
Market Potential

Total
Market Achievement

Overcoming challenges

What does TERI do?

Funding agency Funds TERI Technology supplier Products Local Financial institution Small Loans

VGF

Capacity building

Energy Enterprise

SCS/SMGs

Setting up & Responsive after sales service, replication to cover more areas Provision of lighting through lanterns/fixed lights

Households

Solar DC micro grid

DC distribution lines (voltage varies depending on distance) run along rooftops from the battery bank to households over a short distance to power lights, mobiles etc.

Source: TERI , 2012

Operation
No of connections per SMG: 10, 20, 40, 80, 100

Running time : 5-6 hours; 2 LEDs and Mobile charging

Installation Cost: Rs 3200 3800 per HH Tariff: Rs 150 (~ 3 $) per month, charged by the operators

Costs and Revenue

System capacity (Wp) 150 300 400 600 800 1000 Average System cost (USD) 1142 2297 2669 4250 5724 6659 3328 Cost (USD) per Energy Providers Yearly revenue watt peak Share (45%)(USD) (USD) 8 8 7 7 7 7 7 514 1034 1201 1912 2576 2996 1497 663 1298 1326 2652 3260 3315 1365

Local banks (Aryabrat Grameen Bank, Kashi Gomti Samyukt Bank, etc.) financed ~ 70% of the energy providers share at the commercial rate and tenure of 2-3 yrs. 15 energy providers availed the loan from the bank and rest invested their own savings

Institutional Framework

Rural Energy Enterprises

Is in the process of incubating/facilitating~200 REEs over 2 years period Start up inventory support and Incentives to the REE based on their performance and quarterly achievements

Dibyajyoti Energy Enterprise, Assam

Start up capital Rs 50,000 (TERI provided repayable inventory support ) Technical training Provided by TERI FI linkages - NABARD (in process) USP Community linkages and trust

Girijana Sanghata Energy Enterprise, AP

Start up capital Rs 50,000 (TERI

provided repayable inventory support)

Technical training Provided by TERI FI linkage Mutually Aided Cooperative Society (MACS MFI) USP Community linkages and trust

Finance
End Users Technology Knowledge Platform

Bankable projects to prove the viability of solar technology

Finance

Extension of viability gap funding to off-grid solar/ Risk guarantee fund

Mix of Grant: Debt: Equity

Leveraging
Institutions/ delivery After sales Supply chain

Institutions/delivery
End Users Technology

Knowledge Platform Finance

Reducing costsNew operating models

Leveraging Institutions/ delivery After sales Supply chain

Adopting standard process and metrics for scaling up

Build scale/bundling to cut costs & ensure bankability

Creating an eco-system for solar electrification

Supply chain
End Users Technology Knowledge Platform Finance

Feedback for appropriate technology development and customization (Strict) adherence to QAQC Making Quality the key vehicle Last mile access for products and (spares) missing link

Leveraging Institutions/ delivery After sales

Supply chain

After sales
End Users Technology

Knowledge Platform Finance

Leveraging

Ensuring smoother after-sales and maintenance

Creation of local level enterprises that act as hub for sale and servicing of clean energy products

Institutions/d elivery

After Sales

Supply chain

Thank You
debajitp@teri.res.in