Deployment of Decentralized Renewable Energy Solutions: An Ecosystem Approach

More than 80 million households across India have little or no access to grid-based electricity and rely on kerosene as their primary source for lighting (IFC, 2015). Several social enterprises focus their efforts on last mile delivery of energy solutions, providing an opportunity for this under-served population to leapfrog the grid and adopt reliable, decentralized and clean energy solutions.

To deliver these solutions , like all organizations, these social enterprises operate within an environment that enables and/or constrains their work and their ability to deliver goods and services.  This environment has structures, policies, systems and institutions that create an holistic ecosystem and enable successful implementation. This ecosystem approach looks beyond the technology paradigm to incorporate other factors combining customized technology with affordable financing, structured learning paradigms, a sustainable dissemination and maintenance mechanism and a conducive policy framework, etc.

Ecosystem Framework for Energy Access:

The ecosystem framework consists of five key factors, viz., Finance, Capacity Building, Infrastructure, Technology, and Policy and Regulation. The energy access ecosystem detailed below in figure 1 , caters to the needs of under-served communities that are typically the economically weaker sections of rural, tribal and urban populace.  Figure 1 contains an info-graphic of the ecosystem framework that presents the factors alongside the various institutions.

Ecosystem Approach

Below is the broad overview of each of the factors and their importance.

Finance

This factor broadly covers access to end user and enterprise financing in the form of affordable debt, grants or equity. The institutions range from banks, to non-banking financial institutions, informal money lending/saving structures to venture capital etc. While analyzing the development of the financial factor there is an attempt to gauge the presence and maturity level of financial structures to provide credit to end users and the suppliers of these energy services. The presence of entities such as self help groups (SHGs) and cooperative societies reflect the ability of the population to borrow at a micro level and in turn explore accessible channels for end user financing or collection mechanisms.

In the case of banks and micro credit agencies, their physical presence in the region, current portfolio and capacity to disburse funds are important indicators of whether lending for energy access would be undertaken. However, in the case of bilateral agencies, investors and government sources of funding, physical presence in the same region as the energy solution provider is not a precursor for funding. Here, it may simply be the willingness of enterprise financing agencies to invest for a longer term, conducive for development with context to a particular region and take on the financial risk involved.

Capacity Building : This factor includes awareness, technical training, financier capacity building as well as operational support essential for organizations to disseminate information about energy solutions. Critical factors include government and private vocational or self employment training institutions, Post-training support centres, such as incubation centres working in the area, as well as NGOs involved in generating awareness about the need and usage of renewable energy across household, livelihood and community levels.

Infrastructure  : This broadly refers to all forms of social and physical infrastructure and includes entities such as road structures, availability of utilities such as water, transportation etc and business associations, civil society organisations (CSOs) etc. While energy itself is essential for the improvement of schools, hospitals and similar infrastructure, the deployment of clean energy solutions can also be aided by the existence of communication networks, roads and other entities.

Technology  : Technology is viewed independent of other forms of infrastructure in an attempt to bring more focus on specific challenges that can directly affect energy solution dissemination. The presence of reliable local suppliers or the existence of a strong supply network with quality products – RE technologies and spare parts as well as appliances and loads that run off RE – are needed. These, with strong technical skills, can ensure operations and functioning of the products themselves. Given that the sector is in its nascent stages, standards for product performance provide confidence to end users and financiers, while also setting benchmarks for the quality of solutions being provided.

Policy and Regulation : This brings together current regulations that support deployment of RE in the region and also explores convergence between various developmental agencies of the government. It includes apex and decision making bodies across finance, capacity building, infrastructure and technology, in addition to those working solely on regulations. It attempts to capture any current or potential projects, guidelines, schemes etc., that aid the uptake of RE to address energy access.

To better understand the ecosystem approach please refer to the publication bought out by WWF-India and SELCO Foundation have partnered to develop an approach for analyzing the energy access ecosystem to consequently plan interventions that bridge energy access gaps and promote large-scale replication of renewable energy solutions.

This study was undertaken in collaboration with WWF. View the entire report here