Harnessing Solar energy, Options for India

model with a mandate on appropriate working capital loans could be effective for greater
distribution of lanterns.
Down payment requirements may continue to be a barrier despite capital subsidy. This
requirement could be removed for solar loans. A viable alternative could be the
government’s capital subsidy of 30% being considered as the down payment from the enduser,
with the bank giving a loan covering the remaining costs. Another implication of this is
more effective use of capital subsidy, given the concerns mentioned previously.
Furthermore, there could be longer loan terms for low-income households and/or further
reduced interest rates. This recommendation has been illustrated in Figure 11.
A generation-based tariff for solar microgrids above a set capacity (say, 10 kW p) should be
considered for implementation. This will ensure sustainable operation of the plant as
compared to the one-time capital subsidy currently proposed. In terms of the total subsidy
outlay, this will not be very different than the current capital subsidy.
Methods of monitoring applications and ensuring ongoing operations must be planned and
prioritised,
The mission targets 200 MW of installed solar PV capacity. Given the lack of electrification
and access to clean energy sources in villages, coupled with the precedence of solar off-grid
projects, the mission’s targets for off-grid systems could be more ambitious; off-grid targets
should receive more focus and the policy framework for this should have better clarity..
The Reserve Bank of India should prioritise lending to solar solutions in the case of lanterns
and home lighting systems; in the case of microgrids, hybrid solutions based on solar and
other renewable energy sources should be targeted for priority lending. Rural regional
banks should be extensively involved in channelling these loans.
1.4. Implementation Strategy: An Illustration
Priority I: Solar lanterns and SHLS should be given high priority to provide lighting to those
in un-electrified or electrified villages, or in urban areas. Soft loans and capital subsidies
should be provided to entrepreneurs, manufacturers and service providers. It has to be
noted that this is a stopgap measure till such time that the grid reaches these homes. Even
when the grid does reach, solar power can continue to abate pressure on the grid.
o Since the total investments are very modest at `1,600 per lantern and `45 billion for
28 million lamps, this issue should be prioritised.
o Apart from environmental benefits, health and social benefits are unquantifiable yet
significant.
Priority II: Priority should also be given to remote village electrification to the extent
possible, using solar energy for household and community needs. At a later stage the
microgrid can be upgraded by adding more solar modules to accommodate growth and to
serve commercial establishments and/or cottage industries.
Priority III: Another strategy could be to augment villages with scarce grid supply with solarbased
microgrids or SHLS.
1.4.1. Sample Implementation Plans for Priority I
To give a rough estimate of costs, the 28 million un-electrified households and another 650,000
households (say, fifty households in each of the 13,000 remote villages) totalling 2.87 million unelectrified
households are considered. Out of these, if 75% are assumed to be in high insolation
regions, the total is 21 million households. Furthermore, assume that 50% of these households (10.5
million) are BPL ones and are provided solar lanterns, and the rest of the 10.5 million households
are provided a small SHLS. If 40,243 villages and another 13,000 remote hamlets need
Solar Photovoltaic Applications CSTEP | Page 73