Solar Home Systems - India

Goals

Analyze the market for off-grid solar home systems in rural India.

Early Findings

Market Growth

  • The Global Off-Grid Lighting Association (GOGLA) projects that the solar home systems market in India could grow to $327 million by 2023. "Most of the futures sales are estimated to come from lanterns with additional services (e.g. mobile phone charging or radio) and larger solar home systems with a capacity of 100 Watt peak or higher."
  • GOGLA also reports that, in the second half of 2018, 1.18 million units of off-grid solar products were sold in India, making it the largest cash market in the world for these products.
  • In March 2018, the government of India announced a scheme to install 1.75 million off-grid solar pumps by 2022. This would increase the number of solar pumps in the country tenfold.
  • "The growth will come mainly in the states of Jammu and Kashmir, Chhattisgarh, Jharkhand, Arunachal Pradesh, Uttar Pradesh, Bihar and Mizoram where there is increased electrification but outages are likely to remain for the next few years."

Demand Drivers

  • One driver of demand for off-grid solar home products is the unreliability of electricity in India. While almost all homes in the country are now electrified, power remains unreliable. Some research has even found that "only 11% of rural areas across 66 locations in 23 states receive five hours of evening supply from 5 pm to 11 pm." This creates an opportunity for solar to fill the gap.
  • Further, increased electrification may actually increase demand. "As rural consumers get introduced to some of the benefits of electricity, they are willing to invest in alternative appliances that function when there are power outages."
  • Another driver of the market are customers in remote and unelectrified areas. Through the Indian government's electrification program, it has identified more than 2,500 villages that are remote and will need off-grid power supply, such as solar.
  • In terms of willingness to pay, GOGLA reports: "A recent survey from CEEW across six states of Uttar Pradesh, Bihar, Jharkhand, Odisha, Madhya Pradesh and West Bengal revealed that unelectrified households have a willingness to pay INR 100 (USD 1.5) per month for electrification." Further, this willingness to pay may only increase as incomes rise across India, including in rural areas.

Proposed next steps:

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