Disappointment spread across Tarun Singh’s face when he saw that parts of his solar power microgrid in eastern India’s Bihar state had been stolen.
Batteries meant to store energy stood disconnected from solar panels and drained of essential acid at the site in Kayam village. Singh, chief executive of Veddis Solars Pvt., said he hadn’t been paid the rent due on the small plant since February.
“I’m on the verge of saying goodbye to the state,” he said in an interview at Kayam, surrounded by cobwebs and grime in a control room that’s supposed to be kept clean. Singh, who’d flown from his southern Indian base in Hyderabad to inspect the grids, said he’d consider relocating the equipment.
The episode sheds light on some of the challenges facing Prime Minister Narendra Modi’s push for a $94 billion expansion of solar power. While Modi’s ambition has led billionaires such as Foxconn Technology Group’s Terry Gou to pledge investment, the question remains whether the 750 million Indians living on less than $2 per day can afford or will embrace green energy.
Many prefer India’s heavily subsidized conventional power, and local politicians courting votes can undercut solar projects by adding cheaper mains electricity without much warning.
Bihar’s Dharnai village is an example: some residents protested that solar electricity was “fake” power after a microgrid had been set up there. The government utility eventually brought in cheap, conventional supplies.
Utility-scale plants, rooftop panels and microgrids are the key elements of Modi’s goal of 100 gigawatts of solar power by 2022, from 4 gigawatts currently. He’s seeking to curb reliance on polluting coal and light up every home in a nation where about 280 million people are without electricity.
SoftBank Group Corp., SunEdison Inc., Reliance Power Ltd. and Adani Enterprises Ltd. are among those planning investment.
Winning trust and educating rural residents is key for success, according to Vineet Mittal, managing director at green power specialist Welspun Energy Ltd. The company tries to help with everything from children’s health care to drinking water supplies to win confidence, he said.
He recounted an incident in Madhya Pradesh state where the belief spread that radiation from solar panels would leave villagers’ bulls impotent. Rumormongers can try to obstruct construction and blackmail developers, according to Mittal.
“Does the public trust you or not?” he said. “You’ll face this at every site.”
Among microgrids, Mera Gao Power sees a scalable business in remote hamlets rather than villages lying closer to the main electricity grid, according to co-founder Nikhil Jaisinghani.
Singh of Veddis Solars said in the interview at Kayam last month that he can see lots of ways to deploy his technology profitably despite the setbacks in Bihar.
Conventional power supply is also erratic in India, signaling a role for renewables to help fill the gap.
Modi’s government is striving to overcome challenges. Initiatives include dollar-linked energy contracts to cut costs and woo investment into solar plants. State-run Indian Railways plans to generate 1 gigawatt of solar energy and 200 megawatts of wind power in five years, Power Minister Piyush Goyal said on Wednesday.
But the basic challenge remains how India, the third-biggest polluter, will afford its clean-energy targets and ensure pledges turn into reality.
The nation remains reliant on coal, which fires about 60 percent of its power generation capacity. Electricity distributors have racked up more than 2.5 trillion rupees ($39 billion) of losses partly because they’re forced to sell below cost to keep tariffs affordable.
“A business model can exist only when one can sell power,” said Praveen Bhasin, business unit head at solar microgrid provider Minda NexGenTech Ltd. “In the last five years, I’ve understood that someone who is OK with candles and is struggling for food doesn’t see power as a priority.”
©2015 Bloomberg News
Lead image: Bomb. Credit: Shutterstock.