The report estimates the market size of the SHS space in India to reach US$200-250 million by 2018, and for the market size of the DRE space in India to reach US$150 million by 2018. The two types of enterprises have projected annual growth rates as high as 400 percent (for SHS enterprises) and 250 percent (for DRE enterprises).
According to the report, the Indian government has said that US$250 billion will be needed over the next five years to reach more off-grid households in the context of population growth. They note that US$100 billion of that should be invested in clean energy over the next five years, and 90 percent of annual investment will need to come from the private sector. To date, barriers to large-scale commercial investment have included restrictions around how foreign loans can be used and insufficient data on the sector (something which companies like Angaza are helping to revolutionize).
This could potentially lead to significant revenues for off-grid companies such as OMC Power who can recover costs more easily by serving “anchor clients” like cell phone towers and ultimately have less risk to their bottom line when serving rural households.
It is an exciting time for off-grid renewable energy in India, and this report does a great job laying out what is needed for off-grid energy to reach even more unelectrified households. Thanks in large part to Indian Prime Minister Narendra Modi’s ambitious solar goals, India’s solar sector has been receiving some major investments and attention lately. SunEdison is working with OMC Power to install a cumulative 250 megawatts of off-grid power in 5,000 villages and also announced plans to invest $4 billion to build a large solar panel factory in India. Additionally, during his January visit, President Obama indicated that the U.S. would provide financial support for India’s solar goals.
As we noted in our call for a “Power India” initiative, consolidated U.S. support could help put Prime Minister Modi on track to meet his solar for all ambitions, opening the door to commercial debt by de-risking investments.