Lack of funding slows India's off-grid renewable sector

Financial hurdles are stalling the progress of India's off-grid renewable power.

India's Planning commission has iterated that policy interventions are required to incentivize creation of financeable business models such as rice husk gasifiers based electricity generation.

Alongside this, the issue of the unwillingness of public sector banks to fund small scale off grid renewable based models needs to be addressed.

The Planning Commission is mulling the introduction of a cluster based approach to promote the development of off-grid power in the country.

Under this approach, tariff based bidding mechanism for such clusters inviting participation from business models would bring down the tariff by a significant amount.

According to the Planning Commission, "the difference that the consumers in the clusters are willing to pay and tariff discovered through the bidding mechanism can be financed through annual viability gap funding. The choice of technology can be left to the entrepreneurs, which would encourage them to constantly innovative their products and services to bring down the cost of producing electricity."

Such projects would also be encouraged in the areas with grid availability but with lack of reliable supply so that power can be fed into the grid when the grid is energized and can be supplied to households when the grid is down.