Making Money, and Changing Lives, by Lighting Rural India

Mon Mar 28, 2011 1:51am EDT

I recently returned from India, where hundreds of millions of people -- 45 percent of the rural population -- live in villages with no electricity. Many of them are poor and live with the stubborn problems of illiteracy, malnutrition and hardship that no aid program has been able to fix. Now, however, some development experts and entrepreneurs are beginning to consider these people "energy-poor," and a world of difference resides in the distinction.

That's because solutions to being energy-poor are popping up all over the place. Solar lanterns are becoming available for the equivalent of U.S. $10 as prices for solar materials continues to drop, and better cookstoves are available that make more heat with less fuel. Biogas digesters are starting to provide electricity to whole villages. The thinking is that if the rural poor get more power -- literally, in the form of renewable heat and light -- their other problems might begin to take care of themselves.

Of course, it's not as simple as giving a rice farmer a solar lantern. Here's a look at the potential solutions and problems.

In the West and in other developed parts of the world, renewable-energy technologies like solar panels and wind turbines serve a different role than a place like rural India. They are "green" technologies that will one day supplant the polluting energy-producing technologies we already have, like coal, oil, and nuclear power (Japan's tsunami and the oil spill in the Gulf have cautioned us against relying too heavily on these). But our baseline supply of power is abundant. We've got the electricity we need to light classrooms, keep streets safe and heat our homes.

But for the four billion people in Africa, Asia and Latin America who have little or no access to electricity, the prospect of locally sourced, renewable power is quite literally a game-changer. They're no longer living in the dark. A solar-powered LED bulb provides enough light for the kids to study at night or for the parents to do important chores. A stove that uses less fuel could save a mother a few hours every day scavenging for firewood. And then there's the health benefits. It's estimated [pdf] that the emissions from kerosene lanterns and poorly-designed stoves contribute to half a million deaths in India each year, and cause four to six percent of all disease-related deaths in the country.

In the South Indian city of Chennai, I met with Santosh Singh, who is uniquely equipped to understand what is occurring in the field of rural energy. Singh is director of the rural markets section of the Institute for Financial Management and Research, one of India's largest independent research agencies. He spent 240 days recently touring rural areas throughout the country, and has studied 45 companies that are making a business of delivering energy products to the rural poor in India. Much of my data here comes from his recent publication.

Dozens of companies are hoping to grab a slice of what Singh estimates to be a U.S. $2.1 billion market for clean energy products and services in rural India. Each sector is experiencing steady growth. Some, like Husk Power Systems or Desi Power, are creating biogas digesters that run on rice husks and can provide limited electricity to an entire village. Others, like d.light and Thrive Energy are selling solar lanterns, while still others like First Energy work on better cookstoves and fuel.

Still, the obstacles to the adoption of these new technologies are huge. Farmers in the hinterlands of India express the same doubts about solar lanterns and clean-burning stoves that homeowners in the West have about solar panels on the roof. Will the investment really pay for itself, and in how soon? Will it work as long as the seller says it will? If it fails, how do I get it repaired?

Also, the dirty power systems in rural India have an entrenched history of government support. Just as the U.S. government endeavors to keep the lights on by subsidizing coal, oil and gas, India's government does the same for its farmers with kerosene. A villager can get a month's supply of kerosene for the equivalent of $2 a month and use it to make several homemade lanterns that, (while flammable, polluting and producing feeble light) are sure cheap. In many areas, a family can gather the its fuel -- wood or cow dung -- for free.

In this context, you can understand how hard it would be to sell a cow herder on a solar lantern that costs the equivalent of $10 to $26. It also doesn't help that nonprofit organizations sometimes distribute solar lanterns for free, which puts those who are selling them in an awkward position.

Imagine the difficulty, also, of selling an unfamiliar technology to a population that is illiterate and can't read the instructions. Singh told me that solar panels have gotten a bad reputation in some areas because a user complains to his neighbors that a solar panel doesn't work, when in fact it's been installed upside down. Other people get a little too DIY with their solar devices.

Singh found many cases where people used the battery of a solar lantern to charge other devices like cellphones. Others tried to accelerate the solar charging by wiring the lantern to a motorcycle. Both practices mess with the battery and quickly make the solar lantern into a chunk of fried electronics.

Despite these challenges, demand is emerging for small-scale, rural clean energy. As prices drop, and government incentives change, and more businesspeople take on a steep and risky learning curve, a market of four billion customers is waiting for them.

Photos by d.light/flickr/Creative Commons

David Ferris is managing editor of the Matter Network.

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