At the same time, many rural households are connected to privately owned diesel generators, biomass gassifiers and solar PV micro-grids, especially in Bihar and UP. They pay a relatively high price for these power sources, but consider them to be reliable. The World Resources Institute estimates that off-grid distributed energy services in India is a $2-billion-a-year untapped market. A World Bank study shares that the distributed generation and supply model can go a long way in meeting the untapped demand of electricity and address the issue of electricity access. While the Electricity Act 2003 does permit such off-grid models to operate without a distribution licence, the segment is hobbled by non-uniform technical approaches, undeveloped non-technical processes and fund shortages. Subsidised kerosene is another hurdle. The segment can scale up only when services can be offered at or below the cost of kerosene to households. One way to aid the operators is to leverage the National Clean Energy Fund for renewable energy-based distributed generation grids. The distributed generation with local mini-grid-which works off-the-grid but has the compatibility to connect with the macro gridcan also be attempted. As the grid supply situation improves along with demand, these operators can become distribution franchisees of state utilities and continue to serve the areas, partly with the local generation and partly from grid supply.
Again, there is a third set of access gap consumers who use kerosene lamps or potable lighting solutions such as LED lamps. Teri's Lighting a Billion Lives (LaBL) initiative is attempting to provide clean lighting solutions to such communities. The LaBL provides them LED lanterns that can be recharged from solar charging stations. The initiative has showed how solar LED lanterns could impact communities.
While there is no single solution for all rural communities, a right suite of technologies and delivery models with innovative financial support mechanisms may allow distributed energy models to complement the centralised grid expansion approach. This will support the government goal of Power for All by 2012.
The author is a fellow at Teri