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ISSUE BRIEF
28 November, 2023 |

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Frequently Asked Questions

  • What is carbon footprint?

    Carbon footprint represents the total amount of greenhouse gases (GHGs) in tonnes of CO2, both directly and indirectly emitted, to sustain an individual's lifestyle, organizational activities, product manufacturing, or events within a specified timeframe, typically a year.

  • What are consumption-based emissions? What is the difference between territorial and consumption-based emissions?

    Territorial emissions, also known as production-based emissions, refer to the emissions physically released within a specific geographic area, typically a country's borders. In contrast, consumption-based emissions account for the total emissions embedded in the consumption of goods and services, irrespective of where the production emissions occurred. The difference between territorial and consumption-based emissions lies in the scope of accounting for emissions. Consumption-based CO2 emissions allow us to factor in the carbon embedded in goods and services that are exported and imported for consumption and can be illustrative of lifestyle and consumption patterns.

  • What is the relationship between income inequality, GDP, and CO2 emissions?

    Rapid economic growth, as indicated by high GDP, leads to increased industrial activity and energy consumption. Given that most of our energy demands are met by fossils, high GDP typically leads to higher emissions. However, the nature of economic activities matters; a shift towards cleaner technologies and more sustainable resource use can decouple GDP growth from a substantial rise in emissions. The impact of income inequality on CO2 emissions is nuanced and contingent on specific country circumstances. The relationship is influenced by factors such as the level of economic growth, policies, and societal structures. Similarly, climate change induced by rising CO2 emissions, may disproportionately impact poorer segments, thereby intensifying existing disparities.

  • What is inequity in per capita emissions?

    Per capita emissions represent the amount of emissions generated on account of an individual's activities and consumption patterns. Inequity in per capita emissions refers to the uneven distribution of greenhouse gas emissions among individuals in different regions or countries. The variation in per capita emissions between countries stems from factors such as varying levels of industrialization, economic development, energy consumption patterns, and resource accessibility. Developed countries often experience higher per capita emissions due to industrial activities and higher standards of living, while developing nations may have lower per capita emissions.

  • What is the Common But Differentiated Responsibilities and Respective Capabilities (CBDR-RC) Principle?

    The Common But Differentiated Responsibilities and Respective Capabilities (CBDR-RC) principle, as articulated in Article 3 of the United Nations Framework Convention on Climate Change (UNFCCC), recognizes that countries have varying duties and capacities to address the impacts of climate change. This principle emphasizes on equity, recognizing that developed nations bear a greater responsibility and should take the leading role in the efforts to combat climate change. Additionally, the CBDR-RC principle underscores the importance of considering the specific needs and unique circumstances of developing countries, particularly those vulnerable to the adverse effects of climate change.

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Beyond Planting Trees: How India Can Enhance Biological Carbon Capture
Afforestation alone cannot push India to a net-zero future. We must explore emerging carbon sequestration methods.

22 November 2023

Afforestation is often thought of as the go-to method of carbon sequestration — the process of capturing and storing carbon dioxide (CO2). But to combat climate change and go net-zero on carbon emissions, India will need sequestration methods that go beyond just tree planting.

To illustrate, think of afforestation as the foundation of a sustainable future, much like the cornerstone of a sturdy building. However, just as a building requires more than a strong foundation to stand tall, India's carbon sequestration efforts need additional measures beyond afforestation to combat climate change and reach environmental targets effectively.

India aims to enhance its carbon sequestration efforts by increasing forest and tree cover to 33 per cent right from the time the National Forest Policy, 1988, was released and, under the Paris Agreement, pledged to create an additional carbon sink of 2.5 to 3 billion tonnes by 2030. India also pledged to restore its degraded forests to boost carbon sequestration by 2030 under the Bonn Challenge. It already promotes agroforestry methods like agro-silviculture and agro-silvopastoral systems for sustainable carbon capture.

While afforestation stands as a crucial pillar, it grapples with a few challenges. For instance, careful species selection of trees is crucial because wrong choices lead to poor growth and increase their susceptibility to pests. Maturity age is another factor, as trees take years to reach their carbon capture potential. Agricultural conflicts can also arise when afforestation competes with the land available for food production. Moreover, forest fires in recent years have also challenged successful afforestation efforts. Relying solely on this method, therefore, is not enough. India should explore emerging alternative carbon sequestration methods such as protecting grass and shrubland, promoting blue carbon, utilising algae-bacteria sequestration, and improving agricultural management.

The description of different biological carbon capture methods (Source: Authors’ illustrations and vectors are taken from https://www.flaticon.com/).

Blue carbon sinks, like mangroves, salt marshes, and seagrasses, are effective tools for climate change mitigation, sequestering 2.67 times more carbon than afforestation and over 10 times more than grasslands and agriculture. Besides, seaweeds (macroalgae) not only directly capture carbon from the atmosphere but can also serve as animal feed for livestock, potentially reducing methane emissions from their digestion and indirectly lowering greenhouse gas emissions.

India's mangrove forests covering 4,992 km2, which represents 66 per cent of the country's coastline, are also remarkable carbon sinks, currently storing 702.42 million tonnes of CO2e and having the potential to sequester 748.17 million tons of CO2e by 2030. Furthermore, climate-smart agricultural practices (such as conservation tillage, cover crops, and biochar applications) have proved to be effective strategies for increasing soil organic carbon sequestration and decreasing greenhouse gas emissions. While India took active steps to globally promote blue carbon sequestration through its G20 presidency by proposing initiatives such as creating a comprehensive international framework for blue carbon sequestration and establishing a Blue Carbon Research and Development Centre, it is crucial to acknowledge and address the inherent challenges to effectively implement these alternative carbon sequestration methods at a nationwide scale.

Here's how India can effectively amplify alternative carbon sequestration methods beyond afforestation.

Research funding, technology incubation, and public-private synergy: India should adopt a comprehensive policy approach that considers the well-being of local communities and recognises the social and economic value of these ecosystems, drawing inspiration from successful international initiatives such as Australia's mangrove conservation in the Great Barrier Reef and projects in Africa, such as Zimbabwe's conservation agriculture and Morocco's climate-smart agriculture initiatives. To diversify its carbon capture methods, India should allocate research funding beyond afforestation and focus on innovative technologies such as soil carbon enhancement, blue carbon, and algae-bacteria-related carbon sequestration. Establishing specialised technology centres and promoting public-private partnerships with incentives such as tax breaks and subsidies can attract private-sector investments.

Additionally, India needs to develop detailed technology roadmaps for various carbon capture methods and robust regulatory frameworks to facilitate the adoption of emerging technologies, ensuring they align with global sustainability goals and contribute significantly to environmental and economic well-being.

Long-term monitoring and evaluation: India needs to implement a robust monitoring and evaluation system to track the effectiveness and impact of different carbon capture technologies, regularly assess their contribution to carbon reduction goals and make necessary adjustments. A noteworthy example would be the monitoring and restoration of the mangroves of Sundarbans. The project was initially under the Afforestation, Reforestation, and Restoration (ARR) category, but after the recognition of the importance of the mangroves’ blue carbon sequestration capacity, the project was gradually converted into a successful community-managed voluntary monitoring system funded by the emission reduction credits issued by UNFCC).

Carbon markets and incentives: Establish a carbon market that incentivises local stakeholders to invest in carbon capture and storage methods. It must implement carbon pricing mechanisms that reward organisations for adopting and scaling innovative technologies. A notable example of this approach is the World Bank BioCarbon Fund (WBBCF), which purchased sequestered carbon at a rate of 4 USD per tonne of CO2e, where participating farmers received USD 3.29 per hectare per year, in addition to free training sessions and workshops.

Capacity building, workforce training, and international collaboration: In 2011, western Indian Ocean nations like Tanzania and Mauritius boosted seaweed production through capacity building, training, and international collaboration. This effort increased annual production from 11,000 to 15,088 tonnes by 2012. India should prioritise investing in training programmes for skilled carbon capture system experts, including farmers in advanced seaweed cultivation techniques. This not only enhances production and the local economy but also involves more farmers. Additionally, researching seaweed for livestock feed emission reduction is crucial. India has collaborated with Norway for ocean management, but further partnerships with international organisations and research institutes are vital for sharing carbon capture best practices.

While afforestation remains a cornerstone of carbon sequestration efforts, diversifying our approach is essential for addressing the multifaceted challenges posed by climate change. India's commitment to sustainability and innovation can drive the exploration and implementation of these diverse methods, ultimately leading to a more resilient and greener future.

Joy Rajbanshi is a Programme Associate at the Council on Energy, Environment and Water (CEEW). Send your comments to [email protected].

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CEEW wins 2023 CMCC Climate Change Communication Award "Rebecca Ballestra"

 

CEEW's Faces of Climate Resilience, a 16-part short documentary series in partnership with India Climate Collaborative, Edelgive Foundation and Drokpa Films, won the prestigious 2023 CMCC Climate Change Communication Award "Rebecca Ballestra" in Florence, Italy. The project stood out among 372 entries (and 25 finalists) from over 50 countries. The CMCC Foundation, established in 2005 with the support of the Italian Ministries of Education and Environment, sponsors the award.

The projects considered for the award were a mix of immersive experiences, art installations, audio-visual stories, information design projects, gamification and campaigns. The shortlisted projects included entries from international institutions, scholars and artists like the World Bank, EU Climate Action, Climate Central, architecture firm Stefano Boeri Architetti and artist Thijs Biersteker. A jury comprising American Book Award-winning Author and Founder of the Climate Narrative Project Jeff Biggers, water artist Giuseppe La Spada, Artist and Professor at UMass Amherst Carolina Aragón, Visual Anthropologist at the University of British Columbia Fiona McDonald and Head of the Communication and Media Office at CMCC Mauro Buonocore selected the winner.

Since its launch in August 2022, Faces of Climate Resilience has won awards at the Docs Without Border International Festival (USA) and the Aravali International Film Festival (India). It's also an official selection at Kalamata International Short Documentary Festival (Greece) 2023, Goethe-Institut's Science Film Festival (Bangladesh, India, Pakistan, Sri Lanka) 2023, Urban Climate Film Festival (India) 2023, MediaOne Academy Film Festival 2023 (India) and Ankur Film Festival (India) 2022.

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11 January, 2024 |

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ISSUE BRIEF
16 November, 2023 |

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Frequently Asked Questions

  • How does a community solar model work?

    The community solar model aggregates electricity demand and installs a larger solar PV system on community premises to meet this demand. These systems can be owned by the utility or the developer or the systems can be jointly owned by the community.

  • What is the difference between local solar and community solar?

    The main difference between local solar and community solar is the ownership of the solar PV system. Local solar is characterised by individual ownership whereas community solar involves multiple participants who own the system or subscribe to it.

  • What are some community solar energy initiatives in India?

    MNRE and the US Department of State signed a statement of intent (dated 15 November 2018) on the utility-led, community-based demand aggregation business model. As part of this work, Bihar and Meghalaya have been studied to estimate the feasibility of implementing utility-led community solar models. The community solar model has also been included in solar policies of states such as Jharkhand, Uttarakhand and Delhi (draft).

  • How can a community solar model be beneficial?

    The community solar model helps address challenges faced by discoms such as access to finance, lack of economic incentives, challenges in the tendering process and so on. It also addresses the barriers faced by consumers such as low levels of awareness, high upfront costs, lack of financing options, lack of adequate roof space, etc. In addition, the utility-led community solar model enables discoms to allocate cheap, fixed-price solar to highly subsidised customers and offers discoms greater operational control at the local level.

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Mapping India’s Residential Rooftop Solar Potential

A bottom-up assessment using primary data

Sachin Zachariah, Bhawna Tyagi and Neeraj Kuldeep
November 2023 |

Suggested citation: Zachariah, Sachin, Bhawna Tyagi, and Neeraj Kuldeep. 2023. Mapping India’s residential rooftop solar potential A bottom up assessment using primary data. New Delhi: Council on Energy, Environment and Water.

 

Overview

CEEW conducted a detailed assessment of the technical, economic, and market potential of deploying rooftop solar (RTS) in Indian households by adopting the bottom-up approach. i.e. starting at the household level. The study utilises the primary data collected in India Residential Energy Survey (IRES) of 14,850 households spanning across 21 states and 152 districts in 2020. The assessment further provides insights into the RTS potential of different states, the urban-rural split, and the potential for different system sizes.

Rooftop solar provides an opportunity for households to contribute significantly to the ongoing energy transition by substituting their electricity consumption with solar. The true economic and market potential can be captured only by considering households’ economic strength and energy footprint.

Key Highlights

National-level estimations:

  • Technical potential reduces to one-fifth when the system size is restricted to meet households’ electricity consumption due to lower electricity consumption per square feet (sq ft).
  • In total, 85 per cent of the technical potential is concentrated in RTS systems size between 0-3 kilo watt (kW) as electricity consumption across states in India is concentrated in the lower slabs.
  • In total, approximately 30 per cent of the technical potential lies in the 0-1 kW category. However, this category is not recognised in policy and subsidy schemes.
  • The decline in technical potential is higher in rural areas due to low electricity demand per sq ft (6.8 kWh per sq ft) compared to urban areas (7.7 kWh per sq ft).
  • The Ministry of New and Renewable Energy (MNRE) subsidy 1 is effective for an RTS system size of 1-3 kW, and can increase the economic potential by ~5 GW by making systems economically feasible for more consumers with no change in system sizes above 3 kW.

Source: Authors' analysis

State-level estimations:

  • More than 60 per cent of the technical potential is concentrated in seven states in India.
  • A significant decline in technical potential is witnessed in states such as Assam, Bihar, Odisha, Madhya Pradesh, Rajasthan, Jharkhand, and Uttarakhand due to the large share of households with low energy consumption per sq ft.
  • Net-metering regulations further reduce the economic potential from about 102 GW to about 81 GW due to minimum kW restriction limits for RTS in 15 states. For West Bengal, the potential reduces to zero due to a minimum limit of 5 kW.
  • Flat MNRE capital subsidies increase the economic potential in states by making systems economically viable.
  • Consumer awareness about solar is less than 60 per cent in most of the states. Awareness in urban areas is only 6 per cent higher than rural areas. Consumers in most states find RTS systems to be costly, making them averse to buying them.

Key Recommendations

  • Introduce targeted capital subsidies, particularly for RTS systems of size 0-3 kW to maximise economic potential and ensure the economic viability of different RTS system sizes.
  • Recognise RTS systems of <1 kW, both in policies and regulations, as significant potential lies in this category.
  • Roll out a national awareness campaign is crucial to generate a more significant demand for RTS.
  • Develop a one-stop platform for consumers at the state level to receive credible information about RTS. The intent is to provide consumers with easy access to basic, reliable, and compelling information.
  • Unlock untapped potential by moving beyond traditional models to overcoming constraints such as limited roof space, ownership of roofs, and capital constraints.
  • Introduce low-cost financing options with a fast approval process and a separate line of credit for residential consumers.

 

FAQs

  • What is the residential rooftop solar capacity in India?

    According to Bridge to India’s Solar Rooftop Map (June 2023), the residential rooftop solar installed capacity in India is 2.7 GW.

  • What is India’s rooftop solar target?

    India has set a target of 40 GW of rooftop solar by 2022, out of which ~11 GW has been achieved as of 31.10.2023.

  • What are the benefits of rooftop solar?

    Rooftop solar can help consumers save on their electricity bill with the use of available roof space. It also provides residential consumers access to reliable and clean electricity and an opportunity to contribute significantly to India’s energy transition. Rooftop solar also reduces T&D losses as the points of electricity generation and consumption are colocated.

  • How much does rooftop solar cost in India?

    What is the payback period for rooftop solar in India? The MNRE-notified benchmark cost of a rooftop solar system of size 1 - 2 kW is INR 43,140 per kW (excluding GST), applicable for general category states/ UTs. The payback period for rooftop solar in India will vary based on the system size, electricity generation and consumption, subsidy availed and so on. The study considers a payback period of less than 5 years to estimate the market potential.

  • Is there a rooftop solar scheme in India?

    MNRE has a grid-connected rooftop solar program. The program currently in its second phase which has been extended till 31.03.2026.

“Capitalising on the rooftop solar potential, particularly in the <1 kW category, requires changes in regulations, policies and supported by the roll out of innovative business models.”

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kWh from kW: Achieving Optimum Energy Generation from Rooftop Solar Systems

Insights from Field Visits in Delhi

Bhawna Tyagi, Sachin Zachariah, Neeraj Kuldeep, Deepak Singh Chouhan, Shailendra Singh Chouhan, Aayush Mahajan, and Atul Kumar Jain
November 2023 |

Suggested citation: Tyagi, Bhawna, Sachin Zachariah, Neeraj Kuldeep, Deepak Singh Chouhan, Shailendra Singh Chouhan, Aayush Mahajan, and Atul Kumar Jain. 2023. kWh from kW: Achieving Optimum Energy Generation from Rooftop Solar Systems -Insights from field visits in Delhi. New Delhi: Council on Energy, Environment and Water.

 

Overview

The study examines the performance of the installed grid-connected rooftop solar systems in the BSES Yamuna Private Limited service area. CEEW partnered with BSES Yamuna Private Limited (BYPL) and PV Diagnostics to evaluate the performance of rooftop solar systems. The assessment was carried out using desktop analysis based on generation data, complemented by site visits. The study aimed to evaluate system performance and identify the root causes of underperformance.

Solarising rooftops provides an opportunity to reduce dependence on conventional energy sources. However, poorly maintained solar systems lead to low energy output, increase in the payback period, make the system economically unviable, reduce lifespan, and increase safety concerns. Unsatisfying experience impacts consumer sentiments and can adversely affect the organic growth of the sector in the long run.

Key Highlights

  • Rooftop solar installations are concentrated in domestic and commercial areas in the Southeast, Northeast and Central parts of Delhi.
  • The study performed a desktop analysis of 681 systems with a total capacity of 27 MW. For the survey, 61 systems were studied with a capacity of 9 MW. Projects considered for field assessment in Delhi are net-metered and at least a year old.
  • The study finds that high soiling and shadow effects are the most recurring maintenance issues observed in rooftop solar systems.
  • Air pollution and water quality impacts the system performance in Delhi, necessitating proper maintenance for better performance of the RTS systems.
  • Low awareness of how to maintain the system and a lack of proper documentation and transfer of knowledge to consumers lead to maintenance issues. More than 70 per cent of residential consumers maintain the RTS system themselves whereas commercial and industrial (C&I) consumers prefer third-party annual maintenance contracts (AMCs).
  • System performance improves by over 10 per cent with onsite cleaning. The performance of the RTS system can be increased by 4-6 per cent with regular maintenance (considering all issues that can be resolved with proper O&M). This will lead to 35-60 per cent more energy production from the existing system. Approximately 10 million units of electricity are lost annually due to underperformance of the RTS systems.
  • Overall, ~INR 2 crore (USD 250,000) savings could be realised by consumers collectively just by cleaning RTS systems. The benefits will be higher if we include other maintenance issues such as shadow effect, cable damage, etc.
  • Discoms can save an additional ~INR 5 million and ~2300 tons of CO2 emissions from the existing RTS capacity with proper O&M schedules.

Key Recommendations

  • Create a standard operating procedure for consumers for the post-AMC period. This could be part of the post-installation documents. This will facilitate a smooth transition from the developer to the consumer and ensure the optimum performance of the solar photovoltaic (PV) system.
  • Increase the accountability of developers by a rating mechanism for vendors, which is published on the discom’s website. The rating should be based on feedback from verified consumers. This will be critical in identifying vendors receiving complaints and in encouraging them to improve their performance.
  • Convert MNRE’s detailed guidelines on the dos and don’ts for consumers to maintain their system post-installation into a simpler language. Explainer videos or infographics showing steps to maintain the system can also be created.
  • Improve system performance by offering the annual maintenance services to consumers in their license area. It helps discoms in generating additional revenue, improving the system performance and retaining consumer confidence in the technology.

FAQs

  • What is the subsidy on solar rooftops in Delhi?

    The central government subsidy for rooftop solar plant installed by a residential consumer in Delhi is INR 14,588 per kW for installations upto 3 kW.

  • How do you maintain a solar rooftop system?

    The maintenance of a solar rooftop system involves routine inspection and servicing and the periodical cleaning of modules. Maintenance also includes the real-time monitoring of equipment condition and plant operations. In addition, there are unscheduled maintenance requirements in the case of equipment failure.

  • Why is solar system maintenance important?

    The maintenance of rooftop solar systems is important to optimise the energy yield and maximise the system life. The lack of proper maintenance of solar systems leads to low energy output, increase in payback period, reduces the economic viability of the system, reduces its lifespan, and increases the safety concerns.

  • What is the maintenance cost of rooftop solar? Can maintenance allow for savings?

    The O&M costs are typically 1-2 per cent of the initial system cost annually. Yes, the study finds that ~INR 2 crore (USD 250,000) savings can be realised collectively by residential rooftop solar consumers just by cleaning their systems.

“Maximising the contribution of rooftop solar to overall clean energy mix necessitates proper maintenance of rooftop solar systems. There is a need to simplify the process for consumers by creating standard operating procedures and ensuring optimum solar PV system performance.”

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Solar Dryers to Silk Reeling – How To Take Clean Tech to Rural India
As India’s startup story soars, effective partnerships for clean tech will be critical to reaching rural masses.

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06 November 2023

How does a clean-tech startup that helps farmers dry tomatoes, mangoes and pineapples take that very technology to every corner of India? Raheja Solar, a clean-tech startup, has been enhancing farmers’ income through their solar dryers, which helps reduce post-harvest losses. However, expanding the startup’s reach to farmers pan-India, especially at the last mile, has been challenging. Limited human and capital resources create barriers for India’s emerging clean-tech startups and prevent them from leveraging a sizeable market at the grassroots. Not just Raheja Solar, startups with novel solutions, especially in the clean energy sector, find it difficult to scale up in rural geographies for similar reasons. This limits their on-ground deployments to hundreds at best.

While the reach has been limited, clean energy technologies for productive use can impact 37 million livelihoods in India and have a market worth ~USD 50 billion. As per an analysis by the Council on Energy, Environment and Water (CEEW), 71 per cent of users mentioned technologies such as solar micro pumps, solar-powered vertical fodder grow units, and solar silk reeling machines had increased their annual income by 35 per cent. These technologies also impact women positively by giving them local micro-entrepreneurship opportunities. For instance, 92 per cent of the women users believed that their business knowledge and skills have become more relevant after they began using the technologies.

To help the enterprises overcome the commercial valley of death and drive impact at scale, Powering Livelihoods (a CEEW-Villgro initiative) piloted a partnership model with rural distributors of clean tech. These distributors help enterprises reach prospective customers, create awareness and accelerate the deployment of technologies. Here are some key learnings on successfully unlocking these partnerships, which can be a useful reference for emerging startups and incubators, especially in India’s rural markets.

Solar silk spinning and reeling machines have a market of $25.9 million million in India, which can impact ~81,500 livelihoods

First, collaborate for efficiency. Effective collaboration happens by onboarding the right partner aligned with your vision and goal. Customer needs assessments and a collectively designed implementation plan help achieve goals in a coherent and planned manner, which leads to greater efficiency. For example, define the criteria to select your ground partners – geographical presence, prior experience in selling clean tech products, and their sales generation model. Rural startups should have a clear understanding of their target customers before strategy execution. Raheja Solar started by targeting individual farmers to sell solar dryers across India. However, closer interactions with the farmers showed that it would be more effective to approach farmer producers organisations (FPOs) instead for a commercially viable dried-products business. Now with ESSMART, a rural retailer, Raheja Solar is exploring opportunities to tie up with women’s self-help groups (SHGs) and FPOs.

Second, equip partners to enhance their effectiveness and build trust. Clean tech being a niche market requires building on-ground partners’ capacity around product specifications, economic potential and pricing. For example, enhancing their knowledge of the cost-effectiveness of solar-powered versus conventional technologies that run on grid power improves the sales pitch to rural customers. Another crucial aspect is having a well-structured Memorandum of Understanding (MoU) with a defined scope of work and roles and responsibilities for each partner.

Further, building customer awareness and understanding is also essential as these solutions are novel. Hyperlocal marketing events and product demonstrations help generate user awareness. The 25+ hyperlocal events conducted across India by Powering Livelihoods’ distributor partners generated awareness among 3,000+ rural participants with 500+ prospective leads. These were live demonstrations of technologies such as solar dryers, silk-reeling machines, hydroponic fodder-growing units, and micro food-processing units.

A hyperlocal event conducted in Udaipur, Rajasthan, generated awareness among rural women about the importance of solar refrigerators in dairy farming

Third, initiate cross-sectoral partnerships with national and local players for access and scale. The ground partners have the last-mile reach in rural India, but that alone is not enough. Partnerships with financiers, national and state government initiatives, skilling platforms, and market-linkage partners are crucial. These partnerships extend affordable financing for the end-users, unlock adoption support through government subsidies or interest subvention, enable training on product usage and business models, and help realise income from livelihood activities. Partnering with State Rural Livelihood Missions helped some of the startups reach 1,000+ women from SHG networks generating approximately 100+ leads in Bihar and Uttar Pradesh. Further, 10 FPOs in Maharashtra and Uttar Pradesh got better financing options for cold storage because of the convergence with financiers.

Samunnati Finance facilitated credit services to six women-based FPOs to purchase solar-powered drying units in Andhra Pradesh

The rural distributor partnership has generated 500+ sales of solar dryers for Raheja Solar, further expanding their business from Madhya Pradesh to six other Indian states. Not just Raheja, many more technologies have been deployed through these partnerships, indicating that a strong and robust network of local partners can help startups scale as well as achieve resource optimisation. As India’s startup story soars, effective partnerships will be a fundamental pillar to reaching rural masses as they leverage local expertise, resources and networks. Through effective collaboration, hand-holding support and cross-sectoral partnerships, we could scale the impact of cleantech and act as catalysts in India's path to self-reliant and sustainable green growth.

Divya Gaur is a Programme Associate and Mousumi Kabiraj is a Research Analyst at the Council on Energy, Environment and Water (CEEW), an independent, not-for-profit research organisation. Send your comments to [email protected].

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North Haryana Power Discom Cuts Losses by Half in 6 Yrs, Improves Billing Efficiency to Over 80%: CEEW Report

31 October 2023, New Delhi: The Uttar Haryana Bijli Vitran Nigam (UHBVN) is one of the few public power distribution companies (discoms) in India that has gone from high-loss making to financially healthy, according to an independent report released by the Council on Energy, Environment and Water (CEEW) today. The discom reduced its aggregate technical and commercial (AT&C) losses by half—from 34 per cent to 17 per cent—between FY 2015 and FY 2021. AT&C losses are a reflection of the financial health of power discoms. The report also found that in these six years, billing efficiency improved from ~69 per cent to ~83 per cent due to measures such as near-universal metering of consumer connections, efforts to create a unified billing database to ensure timely bill delivery, and special initiatives like Mhara Goan Jagmag Goan for high-loss rural areas.

Achieving India’s commitment of 50 per cent non-fossil fuel capacity by 2030 and a net-zero economy by 2070 requires a fiscally sound power distribution sector. But the majority of Indian discoms have been reeling under huge losses, with national AT&C losses at 22.3 per cent in FY 2021. The report uses UHBVN as a case study as it has cut losses at a significantly higher pace than all-India trends, ranked among the top 10 discoms since FY 2019, and is among the few public discoms in India with a revenue surplus. However, there are several gaps that need to be plugged.

Shalu Agrawal, Senior Programme Lead, CEEW, said, "The past decade witnessed India cross the significant milestone of universal household electrification. This decade will be about fixing the health of our power distribution companies and digitalising them so that they can ensure clean, reliable and affordable electricity. The financial turnaround of UHVBN is an inspiring success story of systemic and concerted efforts from discoms and regulators. The latest numbers from the Power Finance Corporation also point to the progress of UHBVN. For FY2022, UHVBN losses further dropped to 14 per cent, while all Indian AT&C losses reduced to 16.43 per cent.”

The CEEW report also found that despite tremendous progress, there are several areas where UHBVN could improve further. On the discom side, the report found delays in bill distribution, inequitable workload, and inadequate incentives for meter readers impeding progress, particularly in rural areas. There is also a prevalence of electricity theft, which has been a challenge to address. On the consumer side, the report, which surveyed ~1,600 consumers in four high-loss-making circles of UHBVN, found that ~70 per cent of consumers who had filed complaints the year before the survey had their complaints resolved. However, issues such as irregular payments and under-recovery of bills from financially capable consumers still persist.

Bharat Sharma, Programme Associate, CEEW, said, “The financial recovery of Indian state discoms hinges on improved operational efficiency and enhanced consumer trust and engagement. The Revamped Distribution Sector Scheme can address the former through smart meter installation and infrastructure upgrades. However, fostering consumer trust requires targeted actions, like the Mahra Gaon Jagmag Gaon initiative by UHBVN. MGJG reduced losses in rural areas and incentivised villages collectively by linking collection efficiency with supply hours. The UHBVN also institutionalised Bijli Panchayat platform for consumer engagement and awareness. These initiatives offer valuable insights for discoms seeking to build consumer trust and improve revenue recovery.”

A key factor that will underpin the success of India’s leap to a clean and just energy future is the financial health of power distribution companies. To cut their losses, the CEEW report recommends digitalising the power distribution network through smart meters as stipulated under the Revamped Distribution Sector Scheme (RDSS), undertaking a concerted drive to replace faulty meters on priority, improving consumer trust through proactive complaint redressal and introduction of door-to-door payment collection in rural areas combined with a GoDigital campaign.

For media queries contact: Tulshe Agnihotri – [email protected] | +91 9621119643 / +91 7905717812

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31 October, 2023 |

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Frequently Asked Questions

  • What is the total financial loss of state discoms in India?

    According to the recently released “Report on Performance of Power Utilities – 2021-22”, the total accumulated losses of the state discoms was INR 5,74,220 crore at the end of FY2022.

  • Which state discoms have the highest losses?

    As per the latest PFC report, losses of power utilities in Tamil Nadu, Uttar Pradesh, Rajasthan and Madhya Pradesh constitute around 61 per cent of the total accumulated losses of state discoms in FY2022.

  • Which discoms have significantly improved their financial health?

    Aggregate Technical and Commercial (AT&C) losses is a key metric to ascertain the financial health and performance of the discom. Since FY2016, AT&C losses of state discoms have reduced from 24.84 per cent to 16.51 per cent in FY2022. During this period, discoms in Haryana, Maharashtra, Assam, West Bengal, and Rajasthan have improved their financial performance and brought their AT&C losses well below 20 per cent.

  • Why do discoms continue to face financial stress?

    Discoms continue to face financial stress due to operational inefficiencies leading to low billing and collection efficiency. Billing efficiency is the proportion of energy that has been billed (both metered and unmetered sales) to consumers w.r.t. the energy supplied to an area. Collection efficiency is the proportion of the amount that has been collected from consumers w.r.t. amount billed. While discoms have been able to improve collection efficiency, billing efficiency remains a hard nut to crack. Low billing efficiency is an outcome of both technical and non-technical losses. The former results from gaps in the quality of power distribution infrastructure, whereas the latter is an outcome of improper energy accounting due to gaps in metering and billing.

  • How can Indian discoms' become financially healthy?

    In 2020, the Ministry of Power launched the Revamped Distribution Sector Scheme to support discoms in loss reduction through the upgradation of distribution infrastructure and replace 250 million conventional meters with smart prepaid meters across states by FY2025. Smart prepaid metering would be helpful in curbing inefficiencies in billing, ensuring timely revenue recovery and enhancing consumer control over their consumption. However, as the recent CEEW study on smart meters suggests, extensive consumer engagement, building capabilities for data analysis and state-specific regulations on smart prepaid meters would be essential for leveraging smart prepaid meters for the improved financial health of discoms and enhanced consumer experience.

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