Solar Rural Electrification

While grid-parity garners most of the attention, the breakthrough of residential solar and mini-grid systems in the developing world may prove a more transformative event for the future of solar PV. Solar manufacturers should be prepared for surges in stand-alone system demand, independent of existing grid-tied demand, as the push for clean electric power increases in the developing world.

Solar is proven to deliver consistent, cost-effective power to villagers and residents in developing markets, particularly in rural settings. There are success stories everywhere. For example, with just a 10% subsidy and the use of pre-existing microfinance institutions, families in Bangladesh can currently enjoy electric light and cell phone charging via off-grid, 50W solar PV and battery systems.

The current market segmentation between off-grid solar modules and grid-tied modules is divided by module wattage. The question becomes when and how will increased demand for power and electrical services boost demand for higher wattage panels in the developing world.

In solar rural electrification programs, 50-100W panels will continue to remain a viable market niche to power stand-alone, battery-module products like solar lanterns and cell-phone chargers. However, as solar module costs decrease, and families and businesses wish to use higher-powered devices, the need for higher wattage solar solutions is inevitable (see Figure).

A 300W or a 12,000W Society?

Back in 1998, the Swiss Federal Institute of Technology proposed that a comfortable but sustainable level of development is possible if the entire world could achieve an overall power consumption of the equivalent of 2,000W per person, inclusive of all services that a society produces and consumes. These forecasts fall short of current reality. In Western Europe, society now “runs at” approximately 6,000W/person with the U.S. and Canada at 12,000W/person. India is now, on average, at 1,000W/person with Bangladesh at 300W/person. These averages level inequalities between rich and poor, urban and rural, and industry, government, and home consumption.

At present, a successful program in Bangladesh offers a $360 USD micro-credit scheme (with a $40 USD subsidy) for families to purchase a 50W solar panel, a battery, three compact fluorescent light bulbs, plus a cell phone charge adapter. At current prices and for current needs in Bangladeshi villages, this supply of electricity is a great step forward, even though the per-capita energy use of these villagers is far less than is considered “normal” in countries that are members of the Organization for Economic Co-operation and Development (OECD). Every noticeable energy advance for local residents provokes interest and desire to enjoy at least some of the benefits of the wealthier world.

However, at some point, decisions must be made at an individual, local, national, and international level to advance to the next stage of electricity-enabled convenience. Are laptop computers with satellite Internet access a top priority? Or television? Refrigeration is a less glamorous, but highly useful electrical device. Air conditioning is likely not a top priority at subsistence level but residents of the urban periphery might very well favor room and house cooling. Saving scarce firewood by using electric cookers can be highly beneficial but requires a fairly high power output. Each technology requires an increment in wattage and battery storage capacity over the basic 50W system that enables small, low-wattage electronic devices.

The next increment in power demand for developing nations will have a profound impact on the convergence between off-grid and grid-tied solar markets. If, instead of 50W or lesser sized panels, 100, 150, or 200W panels become the norm in the developing world, more electrical services can be provided.

Home Electric Systems or Mini-grids

One of the primary questions impacting development of the solar rural electrification market is whether this market will grow primarily via: 1) the sale of family-sized, consumer-managed home systems (single modules with attached battery storage), or 2) 1MW to 5MW mini-grids with professional management of arrays and storage.

In the consumer electricity market in the developed world, a professionally-managed electricity system has been the norm. Even a simple home solar-plus-battery system requires maintenance and a bit of technical skill. While solar modules are usually reliable and long-lived, batteries degrade in capacity and require maintenance. Given current technology, batteries need to be swapped out periodically to continue to deliver adequate amounts of electricity. Furthermore, in tropical and sub-tropical climates, conditions are harsh for metallic and electrical devices, with often high humidity levels, monsoon rainfall, and abundant insect life.

By contrast, a utility-scale array with a multi-megawatt-hour battery bank would offer, in most cases, more reliable, consistent power for a number of reasons:

A mini-power-plant will require one or more full-time technicians whose job it is to ensure the smooth functioning of the mini-grid and reliable delivery of power.

Economies of scale will continue to enable substantial savings on a per-watt basis in capital costs, more than compensating for the increased maintenance budget required to pay professional staff.

Various large-scale energy storage technologies have advantages now and may in the future have additional advantages over household-size battery banks.

Current per capita energy consumption is among lowest in the world, but growth is expected to add 280 GW by 2022. Alternate energy sources are needed to meet the demand. Source: Key World Energy Statistics, 2009; IEA

Mini-grid development is still a fraction of the solar rural electrification market, confined mostly to demonstration projects. Industry representatives, government leaders, and development banks will have to make a concerted effort to add mini-grids to the already burgeoning small home-system market in order for the market to progress.

End-use Applications Will Change the Game

Another factor that may favor larger scale solar development is the use of solar electricity to build businesses and support community development. Some small businesses run by individuals or families will benefit from simply using single or multiple home systems to illuminate their work, charge their cell phones, or even power their laptop computers. However, other businesses will require powered machinery like refrigerators, electric sewing machines, electric drills and saws to grow beyond a bare subsistence level. Use of modern, highly-efficient electric tools in business on a daily basis, will quickly outstrip the power output of a 50-watt solar panel, requiring large-scale solar development.


Furthermore, on a community level, it may make sense to pool certain resources, even though this has not been the norm in the developed world. For instance, an underground, large refrigeration unit shared by the community may make more sense than a less efficient home refrigeration unit. Such community resources would require a larger power array than typical home systems.

Both business and community-scale power use will depend on the development of reliable metering or other fair means of enabling payment for electrical services or the services enabled by electricity.

Converging Trajectories: Energy Storage and PV Supply

While current battery technologies are adequate for lower power systems, advancements in the cost and manufacturing efficiency of batteries will be required for a full-scale explosion in the rural electrification market. Currently, lower technology lead-acid batteries can be built in many countries of the world. For the time being, such battery systems will have to suffice. In the future, more capacious and longer-lasting battery and energy storage systems will need to be developed to handle larger scale systems.

Alternatively, for certain commercial uses, direct use of solar electricity by businesses during daytime hours may reduce the demand for battery capacity, decoupling battery demand from demand for solar modules. In these cases, batteries can be used as energy buffers and power conditioners rather than as a full-scale storage system.

Aligning Solar Electrification Stakeholders

Most of the world has a stake in helping the developing world transition out of poverty and conditions of distorted economic development and environmental destruction via the use of clean power. Electric power is also one of the measures of, and tools for, achieving greater prosperity in all parts of the world. Few should have objections to using solar solutions to replace fossil fuels, as well as to power new enterprises in the developing world. Furthermore, the developed world has an interest in reducing present and future carbon emissions.

As it currently stands, the home solar electrification market, aided by microfinance institutions as well as the development of small, affordable solar appliances, will continue without substantial increases in international support. As Rafael Wiese, a leading solar electrification consultant with PSE AG, counsels, the current market division between off-grid systems and larger, on-grid systems will remain for the next two to three years. Wiese sees the off-grid market remaining, in terms of worldwide solar capacity, at the level of 1-2% in the near term.

Given these factors, the status quo in terms of power demand is not likely to hold. People, in general, want to use electrical power to make their lives better and just a bit easier. Luckily, there exist substantial opportunities to “leapfrog” the development path of the developed countries via the use of high-efficiency end-use devices like LED lights, ever more efficient laptop computers, and cell phones; without a doubt people in developing countries will enjoy more services per electric watt than their forerunners in the developed world.

With so many diverse stakeholders who can benefit from more rapid implementation of solar rural electrification, it would make sense for the solar industry, the electrical storage industry, governments, the World Bank and other development banks, and non-profit development agencies to create more larger scale demonstration projects that will create more tangible models of how solar rural electrification can happen. A Solar Rural Electrification interest group or coalition could help locate areas where, on a technical and business level, solar energy solutions can make the most sense.

Solar rural electrification also offers a partial solution to one of the most troubling demographic trends in the world throughout the last hundred years: the depopulation of rural areas and migration to megacities and their peripheries that do not have the social and physical infrastructure to serve these new residents. With more opportunity to enjoy conveniences and to start small businesses in rural areas with electric service, solar rural electrification can help slow this trend.

Srinivasamohan (Mohan) Narayanan received a diploma in industrial management from the Indian Institute of Science, a BE in metallurgical engineering from the U. of Madras, an MS in material science from Case Western Reserve U., and a PhD in electrical engineering and computer science from the U. of New South Wales. He is VP of Technology at Hanwha SolarOne, 1199 Minsheng Road, Bldg., 1, Room 1801, Shanghai, China 200135; ph.: +86 213 852 1666; email

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