Perspectives on Scaling Up Mini Grids Investments

Ashis Kumar Sahu

SELCO Solar Light Pvt. Ltd

Sharing Business Models and Scaling up Mini Grids in Asia and the Pacific Workshop 6th February 2013

SELCO – A Brief

• Solar Home Lighting Solutions since 1995

• Key Differentiations – Need Based Customised Solutions => not Products

– Marketed as an utility investment

– System Integrator

– Installation and Servicing at Doorstep

– Financing Facilitation on local financial Infrastructure

– Company – Investors all Not for Profit Foundations

– Expansion through Incubation

SELCO in Microgrid

• Integrated Energy Centre Concept

• Centralised Solar Charging Stations – Battery distribution – various sizes/ prices to meet needs

– Mobile Charging in Centre

– Other Services • Treated Portable Water

• Cooling – Refrigeration

• Cookstoves

• Urban Slums and Concentrated tourism/ religious areas

• Evolution from full subsidy to capex subsidy to no subsidy – User Management not so successful

– Company Management also very expensive

– Entrepreneur Key to Success

Perspectives on Mini Grids • Users View

– Dummy for the larger conventional Grid • Utility not Income Generation – just a source of power so need to have

multiple uses

– Generated/ Managed by Government • Implications

• Service Provider – Asset Ownership => Operations/ Maintenance

• Users/ Company/ Government/ Entrepreneur

– Technology vs. Financial/ Collection Risk – Dependence on Grant – Government/ Donors => Long term

View – Policy

• Subsidy • Pricing • What happens in case of Grid connectivity – can they sell => Live grids

Perspectives on Mini Grids

• Investors – Mostly Dependent on Capital Subsidy

• Investment on Operations/ Maintenance System

• Pricing Changes significantly in case of no capex subsidy =>

– Challenges in Linking Production/ Enterprises to Minigrids

– Policy • Still evolving – capital subsidy vs. GBI

• Grid Availability

– Returns on Utility Investment • Very Patient Capital