Tackling Energy Poverty in Rural India

Recognizing the economic, social and ecological threat posed by fossil fuel dependence, the Indian government has developed a wide swath of policies to increase the country’s renewable energy generation.

Among these, the Jawaharal Nehru National Solar Mission, launched in 2010, intends to improve energy access in India’s hinterland, which is harshly affected by the adversities of energy poverty.

It 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 percent.

Energy Poverty: An Issue of Vital Importance

The National Solar Mission rightly recognizes access to clean, affordable and reliable energy as a fundamental driver of economic growth, environmental sustainability, and social development. Just as workshops need energy to power their machines and service providers require light to power their operations, farmers need pumps to irrigate their fields.

In India, however, more than 400 million people do not have access to electricity. Energy is a luxury. The economic, environmental, and social costs of continued energy deprivation are too high. Something must be done.

Frequent energy cuts 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.

The ambition of the National Solar Mission to promote rural electrification does indeed tackle an important problem. But does it follow the right path?

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