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Reaching Solar to a Mongolian Herdsman

By Bhavani Prakash

When Malavika Jain Bambawale opened her presentation with a picture of a Mongolian herdsman next to a solar panel, it was heartening to see how even the remotest corners of the world could now get the benefits of state-of-the-art technology.

Bambawale, a research fellow at the Lew Kuan Yew School of Public Policy spoke at the Institute of South East Asian Studies (ISEAS) in Singapore recently. She and her team members have been evaluating different ways through which solar technology has reached the poor and the poorly accessed in several Asian countries, in particular Laos, Mongolia, China, Thailand and Papua New Guinea.

Energy poverty is a stark reality for more than 22% of the world’s population. It is estimated that 1.6 to 2 billion people live without access to electricity.

Why is this so? In many parts of the world the grid is simply not practical due to a number of barriers. Remoteness coupled with poor infrastructure, decades of underinvestment, lack of public funds, misdirected subsidies and poor return on investment are all dissuading factors for the spread of the grid electricity.

Zahnd and Kimber [1], in their study of the remote and impoverished Himalayan villages of upper Humla in north-west Nepal, found that there are people who “still depend on the use of traditional biomass for their daily energy services such as cooking, heating and light. These activities on open fireplaces have a direct chronic impact on the health and extremely low life expectancy of the women and children along with devastating deforestation.”   Other sources of energy are whatever is locally available including candles, car batteries, kerosene, firewood and animal waste.

The consequences of these make-shift sources translate into respiratory problems especially for women and children who are exposed to smoke. Their productivity and level of education are lowered due to reduced lighting hours.

Many kinds of off-grid technologies can enable such poor households get some basic conveniences that most of us take for granted, such as a light bulb, a television or a refrigerator. It is only to be expected that there is a strong relationship between economic prosperity and access to electricity.Having more light, heat or cooling can make a significant difference in a low-income household. It may allow for example, a basket weaver to work into the night increasing output, or a fisherwoman to store her catch and reduce spoilage.

E.F. Schumacher’s words of “Small is beautiful” has particular relevance where the grid fails to reach. Make power locally available to individuals through modern sustainable technologies. These could be Solar Home Systems (SHS), Rooftop Wind Turbines, Pico Hydro, Solar cookers, Biomass cookstoves and Biogas Digestors which also confer environmental benefits by reducing pressure on local deforestation and carbon emissions.

According to the ASTAE, the Asia Sustainable and Alternative Energy Program, “Solar energy has probably one of the highest theoretical potential of all renewables. The total annual radiation received on the land surface of the earth is about 3000 times the current world energy use. However, the important figure for any area is the ‘solar ratio’, which is equivalent to the solar input divided by the local energy use. This ratio varies from less than 100 in some energy-intensive countries to over 10,000 in some countries. Given the inefficiency of energy-conversion processes, the potential for solar to meet the basic energy needs of developing countries in Asia is large.”

How do we make the access of reliable home solar systems, by no means an easy task, to a Mongolian herdsman , or a villager in rural Asia or Africa?  The various projects of rural electrification through solar show different success factors, and that we can’t have a one size fits all approach. Access to solar faces many barriers, such as market distortions, lack of capital and training, inadequate market size and consumer credit, but many of these are slowly being overcome.

Some of the examples and videos below indicate that there are many ways to deliver solar home systems (SHS), with different combinations of funding through subsidies or microcredits, delivery of equipment through dealerships, different pricing mechanisms through fixing of end user price or market driven pricing, and consumer credit options providing long term loans through dealers, microfinance organisations or local loan institutions.

Government help

In China, about 300-400,000 SHS units were targeted in 6 provinces in North West China with a population of 1.2 million remote villages. It was funded by GEF (Global Environment Facility under UNEP) and World Bank . The Chinese government through the Renewable Energy Development Program (REDP) programme took ownership of the program, as well as invested in technical improvement to increase the quality of the panels and reduce costs of solar home systems.

Credit was seen as a western concept as most consumers preferred to save and pay cash in full. Private distributors were given 50% funding after careful selection with proven sales. This was a good example of state and private sector participation which was critical in achieving success, and distribution was 450,000 units- in excess of targets.

This video summarises the China REDP program:

A similar model also operated in Outer Mongolia near Ulan Bator, through an International Development Agency(IDA) and GEF project to reach solar panels to 50,000 herders. This was another example of public-private partnership, with a central agency aggregating parts from China, establishing strong regulatory and technical standards, providing marketing support and 50% subsidy to dealers.

In Laos, private dealers got subsidies from the IDA but instead of outright sales, they leased the equipment to households. However in the process they did crowd out other private players who were not being subsidised.

How do the economics work for solar? The solar panels cost about  US $100 for 10MW, $195 for 20MW and $450 for 50MW in Laos at 2009 prices, which are rapidly coming down. This compares favourably to the other sources of fuel such as kerosene, and makes it attractive for the poor.  International agencies had started out distributing 100MW panels,  but as Bambawale observed during her field trips,  it is the 20MW and 10MW panels that are in greater demand.

Social Enterprises step in

There are other distribution models which have been successful in other countries. Grameen Sakhti, a non-profit organisation founded by Mohammed Yunus, Nobel Peace Prize winner in 2006, operates on a dealer credit model where the institution itself provides the solar panels and offers the full range of services – marketing, sales, service, credit provision, collections, guarantees, Set up 65,000 home systems in rural Bangladesh as shown in the video below:

Micro-finance institutions can help

Yet another model is where dealers tie up with microfinance institutions to provide consumer credit which is a far more accepted norm in a country like India. Take the case study of SELCO in Karnataka, India as showcased here.

Conclusion:

Photo: REEIN

Asia’s population is rapidly growing, and the conventional pollution causing and carbon emitting centralised grids based on coal, petroleum and natural gas are not the ideal solutions for the poor.

It is important for governments to build capacity in various ways to support the spread of off-grid technologies: Investment in technology and in technical standards, providing of the right policy framework for financing and credit institutions as well as regulatory bodies,  market development through after-sales service and warranties, and in spreading awareness about the technology and its use.

Such support could prove critical to this industry which might otherwise not be able to take off on its own. In due course and in the long term, market forces may be able to sustain the momentum.

Many examples show what work and what don’t. The lessons need to be learnt and applied quickly, so that the power of the sun can reach millions whose quality of lives and incomes sadly lag way behind the rest of society.

Many thanks to Malvika Jain Bambawale for sharing her research at the Lee Kuan Yew Institute of Policy Studies during her talk at the Centre on Asia and Globalisation in Institute of South East Asean Studies (ISEAS), Singapore.  Our gratitude to Anthony Louis D’Agostino for the photograph of the Mongolian herdsman.

References and links:

[1] Alex Zahnd and Haddix Macay Kimber: Benefits from renewable energy village electrification system

[2] World Bank : Rural Electrification and Poverty Reduction. An Impact Evaluation

[3]The World Bank has studied 12 of its projects and documented lessons learnt from the rural electrification process between 1993 and 2000.

[4] Clean Technica: Green Jobs for Millions? India to launch several technical training courses for Renewable Energy

Other videos you may be interested in:

1. YouTube: Barefoot College

2. YouTube: TERI – Lighting a Billion Live According to this article :

The new-generation solar lanterns, to be manufactured by Sujana Energy and other Teri partners, will have features including bright white light emitting diode (LED) light, low-power consumption, and up to 7 hours of run time of up to 50,000 hours of LED life.

According to Teri, each solar lantern saves 40-60 litres of kerosene per year that translates to Rs10,000 crore spent annually on kerosene and wick lamps. A sum of Rs 2,34,000 crore would be required to provide solar lanterns to 65 million rural households that are not connected to the grid, forcing them to use kerosene lamps in India, the organisation claims.

3. YouTube: NEST solar lanterns named Aishwarya are also an encouraging story.

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Posted by on Oct 2 2010. Filed under Energy/Renewables. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry

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