In an earlier post, I did something no sane academic would every do: predict the future. One of my speculative claims was the following:
“While Modi may not invest in off-grid electricity generation for remote rural communities, his supporters probably want to see more large-scale solar power.”
This guess was based on the simple observation that BJP’s traditional support base, both in Gujarat and elsewhere, has not comprised destitute and remote communities suffering from high levels of energy poverty. While BJP did win elections by a landslide, it will have to compete in the next election as the incumbent and deal with accusations of incompetence, poor economic performance, and shattered dreams.
Only two days after my prediction, Bloomberg reported that a BJP official, Narendra Taneja, had said that solar power can revolutionize electricity access in India:
“We look upon solar as having the potential to completely transform the way we look at the energy space.”
The idea is that solar home systems or community microgrids could dramatically expand electricity access even if there is no electricity grid or the existing grid fails to provide a reliable source of power.
I certainly hope Modi will prove me wrong. Bangladesh — a country poorer than India — has used solar home systems to provide electricity to millions of households with World Bank assistance. If India can create a policy framework that makes it easy for households or microgrid enterpreneurs, such as Mera Gao Power, to finance solar equipment, India’s solar market could grow very fast. In the 2011 census, less than 1% of households used solar power as their primary source of lighting, but this could change fast.
Why am I cautious, then? India’s solar policies have so far been a mixed bag. I have done a lot of work with different solar companies in India, and they face high regulatory and political barriers. Finance is difficult to receive, as rural banks operate slowly and hesitate to give out loans to households. Come election time, politicians force solar entrepreneurs to stop collecting payments and force banks to cancel loans. The regulatory framework requires extensive paperwork and entrepreneurs may have to wait years for their subsidy. I sincerely hope that Modi’s government will be able to address these problems, but it’s important to remain realistic about the scale of the challenge.