International Herald Tribune
Sept 2, 2010
BANGALORE, INDIA — As dusk falls, the sound of children singing fills the air at the SOS Tibetan Children’s Village in Bylakuppe, five hours’ drive from Bangalore in southern India. Night descends on the tidy, stone-paved school campus carved out of the lush jungle.
But darkness is dispelled when 20 solar-powered street lights on the campus begin to glow with a steady white light. Thirty dormitories set among groves of coconut palm trees are also equipped with solar lights — as is a nearby Buddhist monastery. They allow 1,000 children to study, eat and play during evening power cuts that frequently disrupt the refugee-village school’s electricity supply.
Selco, a solar energy company, installed the lights in 2003. Since its founding in 1995, Selco, based in Bangalore, India’s technology hub, has provided 100,000 homes with solar lighting systems, mostly in the surrounding state of Karnataka.
In the nearby village of Doddhosur, about 30 minutes’ drive from the Tibetan school, D.S. Shivanna, a farmer, has light bulbs in five rooms of his home that are powered by a rooftop solar panel set up by Selco last year.
Doddhosur, reached by a dirt road that runs between fields of tall corn, has electricity — but power failures are common here too.
“There was no current at night,” said Varshitha Shivanna, 15, who lives in the house with her grandparents. During evening power cuts, she used to rely on candles. But now, with solar light, “we can write till how much time we want. We are writing homeworks till 11.”
About 70 percent of Selco’s customers live in remote areas that, unlike Bylakuppe and Doddhosur, have no electricity at all. Without power, they depend on candles and kerosene lamps for lighting. About 400 million Indians lack reliable electricity, living in a world apart from the bright offices and air-conditioned shopping malls of India’s cities.
A two-light Selco home system typically costs 8,500 to 11,000 rupees, or $180 to $235 — no small sum when 60 percent of the company’s customers earn 3,500 to 4,000 rupees a month. But Selco works with a variety of local rural banks to help 85 percent of its customers get financing. The on-time repayment rate for its solar loans is 90 percent, said Harish Hande, its co-founder and managing director.
Selco’s efforts are one example of India’s broader push for solar energy. Alternative energy, like wind, biomass and solar, accounts for less than 8 percent of India’s power generation. Yet the need for more clean energy in India is urgent.
India imports more than 70 percent of its oil and natural gas and relies on coal for more than half of its electricity generation. With economic growth forecast to exceed 8 percent this year, India’s energy consumption is expected to double between 2005 and 2030. Such growth comes with a price. India was among the world’s largest producers of greenhouse gas emissions in 2007, according to an Indian government report this year.
As part of a climate change plan unveiled two years ago, the Indian government laid out an ambitious National Solar Mission this summer. The mission document called for India to increase solar energy capacity to 1,000 megawatts by 2013 and 20,000 megawatts by 2022.
Those are lofty aspirations, considering that India’s current grid-connected solar capacity is no more than 15 megawatts, according to Amit Kumar, director of renewable technologies at the Energy and Resources Institute, a private research organization in New Delhi.
“This is only the beginning of a long process,” Farooq Abdullah, India’s minister of new and renewable resources, said after the document’s publication. “The mission is an ambitious leap of faith at an unprecedented scale.”
Still, although the targets “look challenging,” Mr. Kumar said, “they are really very conservative. We can go beyond that.”
Mr. Hande of Selco, commenting on the government’s blueprint, said, “Sometimes it’s good to be ambitious.” But, he added, “the important question is how it can get away from being a Delhi-centric policy. It needs to get out of Delhi into the hands of people.”
With an average of 250 to 300 sunny days each year, according to the government, India seems well suited to solar power. Yet the sector has not taken off, for reasons that include its high cost compared with conventional energy. Coal-powered electricity costs 3.5 to 4 rupees per kilowatt-hour, compared with 17 rupees for power produced by photovoltaic cells.
Other hurdles include fragmented financing plans, a lack of strong government policies and incentives, uneven service after sales, and technical weaknesses in batteries and solar lamps for India’s rugged conditions.
For solar energy to develop on a significant scale, Mr. Kumar said, India would need to bring down costs by producing indigenous technologies, devote resources to research and development and create a dedicated body independent of the central government to act as an advocate for the sector.
Plans exist to develop more large solar farms to connect to the power grid. Still, given India’s diverse geography and income levels, solar farms are not the whole answer. Other options are also needed, including solar lanterns for individuals and rooftop solar panels like the ones at the Tibetan Children’s Village in Bylakuppe.
Mr. Kumar’s research institute brought new solar LED lanterns to market this summer, priced at 800 to 1,000 rupees, as part of its own solar initiative, which has reached 30,000 households since 2008.
Yet, despite the need and demand for solar energy, even well-established companies like Selco face their share of challenges.
Selco broke even in 2001, and profit reached 3.15 million rupees in 2005. But large German subsidies for solar installations caused a sharp spike in the price of panels from 2006 to 2008 as supply tightened. The surge in prices “almost killed us,” Mr. Hande said.
The company had a loss of 7.5 million rupees in 2008-9 but returned to profit in the 2009-10 financial year, earning 3.8 million rupees on revenue of 150 million rupees.
Selco now has 150 employees, and Mr. Hande acknowledged that finding skilled employees was the company’s biggest challenge and the main constraint on its growth.
India’s top graduates want lucrative, prestigious jobs in technology or business, not in villages, and midlevel managers at Selco could make five times as much elsewhere, he said. But “the higher you pay, the less they will go into rural areas. Our education system is not geared toward social consciousness.”
That seems not to apply to Mr. Hande himself, now 41. A graduate of the prestigious Indian Institute of Technology in Kharagpur with a degree in energy engineering and the holder of a doctorate from the University of Massachusetts, he began to conceive Selco while a graduate student after seeing people using solar lights in the Dominican Republic.
Although 5 percent of Selco’s business now comes from outside Karnataka, Mr. Hande is not seeking growth in a wider market.
Instead, he wants to focus on lower-income Indians, the urban poor and ways to use renewable energy to raise incomes. For example, could a motor running on alternative energy be developed to power a customer’s sewing machine or rice mill?
“Where else could we make a sustainable energy intervention?” Mr. Hande asked. “It could be in lighting or it could be in cooking. If a 1,000-rupee intervention for a cook stove would make a difference, we should do it. This will throw up surprises, as well as for the future of Selco itself.”
“We want to go deeper into the strata,” he added. “Geographical expansion is low-hanging fruit. Let someone else do it.”