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DULU SARNA, India—Sarita Asur, a subsistence farmer and young mother of three, lives in one of India’s most remote tribal areas—a place so isolated that it’s not just off the power grid, it’s also absent from most maps. She and her community, the Asur tribe, are based in the eastern state of Jharkhand.  Nearly half of the people in this isolated territory lack access to electricity—the highest percentage of any state in India.

So when Azure Power, a private solar provider and longstanding IFC client, won a contract to bring power to 320 households in 11 mud-brick villages scattered across the state, the first item of business was to locate these communities. Engineers spent a week driving and trekking through waterlogged jungle to identify the coordinates of each village—including Sarita Asur’s. Next, Azure Power arranged to transport the equipment (including 450-pound batteries) on the narrow, unpaved roads of one of India’s poorest regions.

"When we switched on the light for the first time, it was a very happy moment,” Sarita Asur says. “It changed my family’s life.” Her home is now outfitted with three LED bulbs that receive power from an eight-kilowatt grid.

Because the Asur community is small, the solar panels provide about 18 hours of clean energy every day—higher than the 12-hour average. Families in her village are saving an average of $3 to $4 per month by replacing kerosene with solar energy to meet most of their basic needs. Paying the nominal solar tariff of $0.42 per month is far cheaper than using fuel lamps—and it’s safer, too.

“I always feared the naked flame of the [kerosene] lamp at night,” says Sarita Asur. “I no longer have to worry about that.”

Sarita Asur now relies on LED bulbs to light her home—a cheaper and safer energy source than kerosene lamps.

Solar power has brought other benefits to the tribe, including keeping wildlife away. Some years back, an errant elephant charged the home of 70-year-old Jerome Asur, destroying two of its walls. “What could I do,” he shrugs, “it was much bigger than I am.” With the village now lit at night, animals keep a safe distance. “I never thought I’d see electricity in this village in my lifetime,” says Jerome Asur.

Meeting India’s Energy Needs

Nearly one-third of the 1 billion people around the world who lack access to electricity live in India. Like Sarita Asur and her neighbors, many of them populate remote areas that prevent them from receiving electricity through standard transmission lines. For this reason, both grid-tied and off-grid solutions are necessary for achieving universal access to energy.

India is already working to address the energy needs of a burgeoning population of 1.3 billion: the country leads the off-grid solar market, and sold more than 3 million systems in 2016 alone. But there’s much more work to be done: India aims to produce 40 percent of its electricity from renewable-energy sources by 2030, 175 gigawatts of which are slated to be developed by 2022. That’s almost what the world’s entire solar capacity was just four years ago.

Image: Small solar grids from Azure Power now provide electricity to households in Dulu Sarna Village.

To meet India’s ambitious targets, private companies, government officials, and multilateral development institutions like IFC are developing programs to increase solar capacity. These initiatives are varied in their scale and reach: investors are building freestanding micro-grids in the tiny villages of eastern Jharkhand, constructing enormous ground-mounted solar parks in the central state of Madhya Pradesh, and covering urban rooftops with solar panels in the western state of Gujarat.

Ground-Mounted Panels, Sky-High Potential

For India to achieve its ambitious targets, including cutting its emissions intensity by 35 percent by 2030, the government aims to produce more energy from solar power instead of coal. In April 2017, for instance, the government in the central state of Madhya Pradesh started building a 750-megawatt solar project, the Rewa Ultra Mega Solar Park. Once complete, this park will reduce greenhouse-gas emissions by 1 million tons every year and nearly double the state’s capacity to generate solar power.

Remote villages in India are often too far away from transmission lines. For these communities, off-grid systems are an alternative solution.

Rewa’s development has set several records in India. The initiative achieved the lowest tariff ever awarded for a country-wide solar project, bringing the cost of solar power on par with that of coal and thermal energy. “The biggest change that came with Rewa was that, without any subsidy from the government, solar power became cheaper than power from coal-based projects,” says Manu Shrivastava, director of a government agency that promotes renewable energy in Madhya Pradesh.

“When we switched on the light for the first time, it was a very happy moment.”

— Sarita Asur, farmer

Nearly one-third of the 1 billion people around the world who lack access to electricity live in India.

In another first, the Rewa park will transfer solar power between two Indian states. With help from the World Bank, which financed the construction of the project’s $30 million energy-transmission facilities, this solar park will supply Delhi’s Metro Rail Corporation with 80 percent of its daytime energy. The metro system, which is one of the busiest in the world, is not only reducing its dependence on coal—it also expects to save $168 million on its energy bill over the next 25 years.

IFC led Rewa’s negotiations and helped structure a transaction that attracted $575 million in private investment. It also introduced a payment guarantee, which significantly reduced financial risk, attracted international bidders, and helped achieve the record-low tariff price. The government of India is currently working to replicate Rewa’s bidding model in states across the country to continue to reduce the cost of solar.

Small solar grids installed by Azure Power in Dulu Sarna Village now light the homes of residents who used to rely on kerosene lamps.

Rooftop Rays

Massive projects like Rewa are well-suited for areas where land is plentiful and affordable. Yet India also needs to increase solar power in crowded, urban areas where space is limited. With more than 300 days of sunlight, but a dearth of space, the city of Gandhinagar, the capital of the western state of Gujarat, pioneered an innovative solution to its land constraints.

“The market for rooftop solar started here,” says Omkar Jani, a former solar scientist for the Gujarati government. Nearly a decade ago, he and IFC designed the means to get this 5-MW project off the ground: what technology to use, how to install the panels, and where the energy would go. The growth in India’s rooftop solar capacity, which today is 3.4 GWs, can be attributed to this first program conceived by IFC.

Solar panels installed on the rooftop of a government building in Gandhinagar contrast with a neighboring coal-fired power plant.

To start, IFC identified viable rooftops across the city and planned the transaction structure, which opened the government’s project to a competitive bidding process among private investors. To reduce the financial risk, IFC advised that 80 percent of the solar panels be installed on government-owned buildings, and worked out the social, legal, and commercial details of leasing residential and public rooftops. IFC also participated in discussions between the government and the private power-distribution company, Torrent Power Ltd. (TPL), to arrange for the purchase of the solar energy to be fed into the city’s main electrical grid operated by TPL.

Azure Power—the same company that electrified 11 villages in Jharkhand—started working on India’s first rooftop program with a $3 million loan IFC granted in 2013. The investment helped Azure install thousands of rooftop panels on private residences and public buildings across Gandhinagar at no cost to the roof owners. The terms of the deal were straightforward: in exchange for leasing their roofs, residents and rooftop owners receive a monthly payment based on how much energy their panels produce.

“The more solar power I generate, the less I have to pay for electricity, and the less I have to rely on coal,” says Aniruddhsinh Chanda, who leases his roof to Azure. The $19 that Chanda receives each month fully offsets his energy costs. “Before the solar panels, I used my rooftop maybe one or two times a year,” says Chanda. “Now, [the panels] use my roof 365 days a year.”

Monthly payments that Aniruddhsinh Chanda receives for leasing his rooftop for solar panels fully offsets his energy costs.

Azure’s panels today provide a clean and reliable source of electricity for 10,000 people in Gandhinagar, reducing the city’s annual emissions by 7,000 metric tons—the equivalent of not burning nearly 8 million pounds of coal. More broadly, Azure Power’s overall solar portfolio, of 1 GW, provides electricity to 1.3 million households across India. Its Gujarati program has been replicated across and beyond India. The Maldives, Sri Lanka, Bangladesh, and Thailand are all currently exploring ways to duplicate the rooftop solar model. The World Bank has supported the growth of this sector through a $625 million credit line to the State Bank of India exclusively for rooftop solar projects.

Numbers back up these diverse and wide-reaching efforts to bring solar power to the region. According to a new IFC report, South Asia’s climate-smart investment potential is estimated to reach $2.5 trillion by 2030.

Nimesh Prajapati, a senior engineer at Azure, backs up these efforts, too, because of the results he sees while inspecting rooftop panels across Gujarat. From the perch of a 10-story building on a recent inspection, he glanced toward a coal-fired power plant on the horizon. “This is what India was,” says Prajapati, pointing toward the plumes of steam rising from the coal stacks. “This is what we’re moving toward,” he says, looking down at the blue sea of panels around him, iridescent in the morning light.

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Published in January 2019