Energy Ensemble - November 2013

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If It\'s Green, It\'s Efficient Too!

These days, people often get to hear phrase like ‘energy poverty’. In India, ironically, more than 400 million people do not have access to electricity. The economic, environmental, and social costs of continued energy deprivation are too high. Therefore, with this new phrase comes a pertinent question like: is energy a luxury in a country like India?
Having said this and having raised this issue, one must also appreciate that today’s it’s not an over statement to bill India as one of the world’s fastest growing economies. As the Indian economy surges ahead, India is witnessing an unprecedented demand for energy and a growing deficit in power supply. Frequent energy cuts in many parts of the country and high diesel costs do not only jeopardize the productivity and competitiveness of businesses. They also put a high economic strain on households, which often resolve to harmful indoor fires and unsustainable wood harvesting.
At this outset, the Jawaharal Nehru National Solar Mission, launched in 2010, has rightly recognized access to clean, affordable and reliable energy as a fundamental driver of economic growth, environmental sustainability, and social development. In a country like India, just as plants and factories need energy to power their machines and service providers require light to power their operations, farmers need pumps to irrigate their fields.
The main objective with which the Jawaharal Nehru National Solar Mission was launched is to improve energy access in India’s hinterland, which is harshly affected by the adversities of energy poverty. And this can be done by improving energy efficiency.
The mission hopes to achieve 20 million square meters of installed solar water heaters and a power production of 2,000 MW through off-grid solar systems by 2022. To support the venture, the government introduced a capital cost subsidy of 30 percent and a five percent interest rate subsidy to financing respective loans. In early 2012, the interest rate was abolished and the capital cost subsidy raised to 40 per cent.
Unfortunately, however, there is a very low level of awareness of business opportunities for clean energy lending and lack of knowledge of energy technologies and also there is a high-risk perception concerning use and maintenance of the technology by borrowers. Local financial institutions are still skeptic to offer credit for clean energy products to rural customers who cannot afford upfront costs. The government interest rate subsidy on loans has not been able to reverse this tendency.
However, the potential of clean energy technology even in rural areas and suburban areas is enormous. For instance, solar home systems, can be easily installed on rooftops of rural homes and provide electricity for home lighting, TVs, and refrigerators. Solar water heaters, on the contrary, may provide access to hot water for sanitation and hygiene. The failure to attract finance for clean energy technologies is a major weakness of the National Solar Mission. If energy poverty is to be eradicated, this roadblock must go at any cost. Policy makers must realize that when it comes to energy, if it’s green, it’s efficient too.