Opportunities and Challenges for Solar Minigrid Development in Rural India

The goal of this report is to inform investors about the potential of solar minigrid technologies to serve India's rural market. Under the US-India Energy Dialogue, the US Department of Energy's (DOE) National Renewable Energy Laboratory (NREL) is supporting the Indian Ministry of New and Renewable Energy (MNRE)'s Jawaharlal Nehru National Solar Mission (JNNSM) in performing a business-case andpolicy-oriented analysis on the deployment of solar minigrids in India. The JNNSM scheme targets the development of 2GW of off-grid solar power by 2022 and provides large subsidies to meet this target. NREL worked with electricity capacity and demand data supplied by the Ladakh Renewable Energy Development Agency (LREDA) from Leh District, to develop a technical approach for solar minigriddevelopment. Based on the NREL-developed, simulated solar insolation data for the city of Leh, a 250-kW solar photovoltaic (PV) system can produce 427,737 kWh over a 12-month period. The business case analysis, based on several different scenarios and JNNSM incentives shows the cost of power ranges from Rs. 6.3/kWh (US$0.126) to Rs. 9/kWh (US$0.18). At these rates, solar power is a cheaperalternative to diesel. An assessment of the macro-environment elements--including political, economic, environmental, social, and technological--was also performed to identify factors that may impact India?s energy development initiatives.