Harnessing Solar energy, Options for India

Table 11: Models of Dissemination
Description Example Remarks
Franchisee
approach
Franchisees are
selected based on a
competitive
bidding or
tendering process
and given the
responsibility of
providing services
to designated
regions
Argentina,
Senegal, Bolivia,
Philippines
Competitive; open
markets can create
pressure in
reducing costs;
could target remote
regions where
market models
may fail
Leasing/microrental
approach
Fee-for-service
model with service
provider installing
equipment, but
retaining
ownership while
assuming operation
and maintenance
(O&M) risks in
return of monthly
rental
Soluz in Honduras
and Nicargua
pioneered the
concept for rural
areas; also
implemented in
Laos and African
countries like
Zambia
Logistically
difficult for service
providers to collect
rent; working
capital and risk
management are
issues for service
provider
Dealer/credit line
approach
Service providers
sell equipment to
users in an open
market mode; may
assist in financing
through banks and
micro-finance
institutes (MFI)
Sri Lanka; India,
companies like
SELCO
Down payment
requirements and
interest rates are
barriers for endusers;
maintenance
infrastructure is
critical
Other than pricing, the major barriers for PV dissemination in rural areas have been availability of
local credit, lack of awareness of end-users, limited outlets of procurement, unavailability of
different models catering to the specific needs of consumers, absence of trained manpower for
maintenance, and lack of support to entrepreneurs. 21 The major barriers faced by end-users have
been down payment requirements and the higher interest rates that small rural banks or
cooperatives charge.
However, as suggested in Figure 8, the capital subsidy of 30% can be given to the lending institution
as down payment towards the solar loan, and the rest of the capital can be given as a loan to the enduser.
A payment schedule that is convenient to the end-user and acceptable to the bank should be
worked out. As an alternative for households that cannot access loans due to lack of
creditworthiness, a micro-rental scheme can be looked into. It is estimated that if loans similar to
that currently envisaged are provided to the service provider for managing the working capital, this
model can be viable and could make the dissemination more inclusive.
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