Access to Electricity: Closing the Affordability Gap
Rural Electrification - 04/10/2016
By Subarna Mitra and Shashi Buluswar
Universal access to electricity will be realized when people have electricity-powered services for basic needs, beyond just a fan and light bulbs. Decentralized solar PV mini-grids are promising for cost-effective rural electrification but continue to be limited by a large affordability gap exacerbated by acute shortage of funding.
Subarna Mitra an author of the 50 Breakthroughs published a peer reviewed journal article on technological breakthroughs that could reduce the cost of electricity, bridge the affordability gap and create market-driven growth of renewable energy minigrids.
Access to electricity changes lives but only when people can afford electricity-powered services to meet their basic needs, and this is more than just two light bulbs and a fan. Decentralized renewable energy (RE) mini-grids, particularly solar photovoltaic (PV) mini-grids, can cost-effectively electrify a large share of currently unelectrified rural populations. But the cost of using appliances with this electricity is still much higher than what the poor can afford without deep subsidies. This affordability gap stunts the sustainability and growth of RE mini-grids. Significant improvements in the economics of supplying electricity with mini-grids, combined with higher-efficiency appliances, are needed to reduce the effective cost of using electricity in decentralized RE mini-grids. These would bridge the affordability gap and improve business opportunities and value to users, investors, and service providers and thus create market-driven expansion to overcome the acute lack of funding that they currently face. Technology breakthroughs that can help in this respect include (a) significantly cheaper solar PV components to reduce up-front costs of solar PV mini-grids; (b) significantly more affordable and energy-efficient appliances; (c) better-performing bulk storage at a significantly lower cost; (d) affordable and easy-to-use grid management solutions, and (e) a utility in a box for a simpler, cheaper, and faster way to set up mini-grids.