Mera Gao Power: Micro grids to provide remote hamlet electrification
Mera Gao Power builds, owns, and operates solar powered micro grids serving remote, off-grid hamlets with basic electricity. MGP's focus on hamlets provides it multiple benefits: 1) ability to serve communities that the national grid, mini grids, and solar home systems cannot serve, 2) protection from competition, in particular subsidized service from the national grid, 3) strong and consistent demand for a basic power service, and 4) enormous scale potential.
Key to MGP's commercial viability is a focus on priority energy services rather than mass energy consumption. Lighting and phone charging are the services that make the greatest impact on customers' lives and are therefore the services for which customers are willing to pay a commercial rate (thought experiment: how much would you pay per month for lighting? Calculate the cost per kilowatt based on using 5 watt LED lights). MGP provides customers with 2 lights and 1 phone charger which operate for 7 hours each night. By focusing on a basic but broadly demanded service package, MGP can build a micro grid for a community with up to 30 customers for $900.
Efficient operations are the compliment to MGP's low cost micro grid design. Customers pay Rs. 30 per week ($2 per month) which MGP collects using microfinance type cash collection processes. MGP's cluster operators are equipped with smart phones and MGP's custom designed collections app preloaded with customer names and bills. The mobile app sends SMS receipts to customers and syncs with MGP's custom-designed field database at the end of the day.
MGP has established branch operations in 8 districts of Uttar Pradesh and is building out those branches. MGP aims to add 50,000 customers at a capital cost of approximately USD2 million of which the company will finance half from equity.
What problem are you trying to solve? Who has this problem?
MGP targets ultra-poor communities away from highways and disconnected from the local economy. Rural hamlets are much smaller, more remote, poorer, and generally deprived of public services than towns and villages. Most labor is engaged in agriculture and livestock, and families typically have smaller livestock and land holdings than in villages. Hamlets can be as small as 20 households but in rare cases are as large as a few hundred. Most hamlets MGP has encountered are under 50 households in size. Hamlets in Uttar Pradesh are typically unelectrified.
The limited generation, transmission, and distribution infrastructure has left 400 million people across hundreds of thousands of hamlets and villages of India without electric power. The World Resources Institute estimates that off-grid distributed energy in India is a $2 billion a year untapped market. As of the most recent census (2011), it is estimated that 45% of rural households in India were unelectrified. Uttar Pradesh alone represents 25% of this market, with an estimated 20.8 million households, or 122 million people, lacking access to electricity; from 2001 to 2011, the off-grid population in Uttar Pradesh increased by 3.3 million households and 19.5 million people.
Officially, 260 million people in India live on less than Rs. 32 ($0.50) per day. More than 30% of the rural population of Uttar Pradesh falls below the poverty line (BPL) of Rs. 27 per day as defined in 2011, with a greater proportion of this BPL population in hamlets. According to the Arjun Sengupta Committee Report on Unorganized Sector Workers, about 77% of people in the country subsist on under Rs. 20 per day. According to MGP’s surveys, the typical household income in hamlets, as reported by customers to MGP, is between Rs. 16 ($0.23) and Rs. 30 ($0.45) per person per day depending on the season. The numbers may vary, but regardless of the data source, the conclusion is clear - providing services at very low price points is critical for capturing a high percentage of the off-grid market.
The correlation between grid access and poverty is strong with the poorest communities being the lowest priorities for grid electrification. Without micro grid investments to compliment the national grid and mini grids, these communities will not receive electricity services for the foreseeable future.
MGP offers customers a better source of lighting and phone charging at a lower cost than existing alternatives. MGP is competing with kerosene, the dominant source of nighttime lighting in the off-grid hamlets in which MGP aims to operate. Despite kerosene subsidies, kerosene for lighting and local phone charging is more expensive than MGP's service.
For basic power services, the national grid, though heavily subsidized, is actually more expensive than MGP’s service; with the ₹1,000 ($17) connection fee and minimum monthly power payment of ₹180 ($3) in Uttar Pradesh, a connection to the grid costs a premium over MGP's unsubsidized service which poor households cannot afford.
MGP isn't just cheaper than the national grid, it is more dependable as well. In a recent survey, over 70% of grid connected village households in Uttar Pradesh rely on kerosene for lighting; 50% of those households are grid connected. Further, “while 57 per cent of rural households gained access to electricity in the last five years, only 36 per cent of the newly electrified households actually use electricity as their primary source of lighting.” The national grid’s poor performance leaves adequate demand for reliable, dependable lighting services even within grid connected villages.
$900 Solar Powered Micro Grid.
MGP uses off-the-shelf technologies a...
Including black carbon emission reductions, which is estimated to be 700 times more harmful to the environment than CO2, 50,000 households will reduce CO2e emissions by 7,000 tons per year
MGP aims to serve 50,000 additional households, 300,000 additional people, 150,000 additional women, and 90,000 additional children through the implementation of this project.
Nikhil Jaisinghani, Executive Director
· Technology, software, fund raising
Govinda Raju, Head of Accounts
· Accounting, auditing
Sandeep Pandey, CEO
· Cash collections, management
Valerian Fauvel (Insitor Management)
Jerome Broulin (ENGIE Rassembleurs d'Energies)
Geraldine Crosset (EDFIMC ElectriFi Fund)
Arvind Agarwal (ICCO Investments)