In our 28th May blog we highlighted that like Japan in the 1970s, India too is poised to pivot away from fossil fuel based power generation. Already 14% of India’s power generation is from solar. This FT story about how Tata Power is investing in microgrids as a precursor we believe of how India will tap into solar power more aggressively over the coming decade: “The microgrids are installations of nearly 100 solar panels arrayed in a field next to the village they supply, with a diesel generator cell and a hut containing storage batteries and automated remote monitoring and control systems. These smart monitors manage the supply flowing from the panels, batteries and generator, to households and businesses.
Customers can pay bills through an app, and Tata has local employees to take care of the equipment and make sales. Gupta and his team installed CCTV to make the microgrids more theft-proof, and if more customers want to sign up, TPMG can add panels to boost supply.”
For Tata Power this is a commercial for-profit initiative and the company believes that the power they are selling is cost-efficient. However, most people in rural India are used to free electricity from the grid (it is a different matter that for much of the day that “free” grid power is not available): “Although microgrids are typically used in philanthropic projects, as chief executive of the newly created Tata Power Microgrid (TPMG) subsidiary, Gupta’s mandate is to create a commercial enterprise….
Tata Power also has industrial-scale solar projects, but its bet on microgrids sets it apart from rivals. It plans to scale up from 200 to 10,000 microgrids. Gupta said the two microgrids seen by the FT cost Rs5mn ($65,000) to build…
While most of India’s villages are connected to the electricity grid, not all receive consistent power — a study by CEEW found that rural households received 19.9 hours per day on average, but this varied widely between states. Uttar Pradesh and Bihar, where TPMG have built microgrids so far, are among the worst…
Thanks to the batteries and diesel generator, which Gupta wants to replace with a biomass alternative, Tata’s microgrids can supply up to 24/7 electricity. The challenge is convincing locals to spend Rs100-750 (£1-£7.50) a month on it.
In Uttar Pradesh, many potential customers said they were happy to stick with the erratic state-supplied power because it is a fraction of Tata’s price. Prabhunath Gupta, 22, described the government supplied 10-12 hours of power as “very good”.
“It’s a mindset which has to be changed,” Gupta said.”

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