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A vendor uses a solar powered light at a market in the western Indian city of Ahmedabad - Source: Reuters
When night falls in remote parts of Africa and the Indian
subcontinent, hundreds of millions of people without access to
electricity turn to candles or flammable and polluting kerosene
lamps for illumination.
Slowly through small loans for solar powered devices, microfinance
is bringing light to these rural regions where a lack of
electricity has stymied economic development, literacy rates and
health.
"Earlier, they could not do much once the sun set. Now, the sun is
used differently. They have increased their productivity, improved
their health and socio-economic status," said Pinal Shah from Sewa
bank, a micro-lending institution.
Vegetable seller Ramiben Waghri took out a loan to buy a solar
lantern which she uses to light up her stall at night.
The lantern costs between $88-$149, about a week's income for
Waghri.
"The vegetables look better by this light, and it's cheaper than
kerosene and doesn't smell," said Waghri, who estimates she makes
about 300 rupees ($8) more each evening with her lantern.
"If we can use the sun to save some money, why not?"
In India, solar power projects, often funded by microcredit
institutions, are helping the country reduce carbon emissions and
achieve its goal to double the contribution of renewable energy to
six percent, or 25,000 megawatts, within the next four years.
Off-grid applications such as solar cookers and lanterns, which can
provide several hours of light at night after being charged by the
sun during the day, will help cut dependence on fossil fuels and
reduce the fourth biggest emitter's carbon footprint, said Pradeep
Dadhich, a senior fellow at energy research institute TERI.
"They are reaching people who otherwise have limited or no access
to electricity, and depend on kerosene, diesel or firewood for
their energy needs," he said.
"The applications not only satisfy these needs, they also improve
the quality of life and reduce the carbon footprint."
Sewa, or Self Employed Women's Association, is among a growing
number of microfinance institutions in India focused on providing
affordable renewable energy sources to poor people, who otherwise
would have had to stand for hours to buy kerosene for lamps, or
trudge miles to collect firewood for cooking.
SKS Microfinance, India's largest MFI, offers solar lamps to its
five million customers, while Grameen Surya Bijlee (Rural Solar
Electricity) Foundation helps fund lamps and home and street
lighting systems for villagers in India, Nepal and
Bangladesh.
"Providing electricity is a government responsibility, but it's a
gigantic task and the government alone cannot do it," said Shirish
Garud, coordinator of the Renewable Energy and Energy Efficiency
Partnership (REEEP) in south Asia.
"In many cases, the end-user has no access to conventional banking
and financial services, which is why we need MFIs."
The Aryavart Gramin bank has approved loans for the installation of
8,000 solar-home-systems in Uttar Pradesh, India's most populous
state and a key grain growing region.
In Africa too, micro-loans are bringing solar systems to homes,
schools and cottage industry businesses in remote regions,
off-the-grid.
Poor people use money they would have spent on kerosene to pay
back their loans for the solar devices.
Billion lamps
Hundreds of millions of people in India have little or no access to
electricity.
Yet demand for power by industries in a country which saw its
GDP at or above nine percent in the three years to 2007/08 has
taken a toll on capacity and infrastructure.
Of the 76 million homes in India that have no access to
electricity, 65 million use carbon-emitting kerosene, according to
REEP.
Kerosene is highly flammable and the fumes are noxious.
Every year thousands of people in developing countries die from
accidents involving kerosene stoves and lamps.
Developing nations now emit more than half the world's greenhouse
gases and that figure is set to rise.
In India, greenhouse gas emissions are expected to jump to between
four billion tonnes to 7.33 billion tonnes in 2031.
There is no figure for India's current greenhouse gas
emissions.
Its per capita emissions, estimated at 1.2 tonnes, are expected to
rise to 2.1 tonnes by 2020, according to a recent government-funded
study.
India adds about 10 gigawatts of power every year and is likely to
see a shortfall of as much as 21,000 MW as capacity expansion fails
to keep up with demand, leading to more outages.
Solar power will ease some strain on the grids.
In neighbouring Bangladesh, the state-owned and private sector
power plants can generate between 3,700 to 4,300 megawatts of
electricity a day, against a demand of 5,500 megawatts, according
to the state run power development board.
With only 40% of the country's people having access to electricity,
microfinance institutions such as Grameen Bank have made a major
push towards expanding the use of solar power.
Since 2001, 350,000 solar home systems have been installed in
Bangladesh and 550,000 solar lanterns have been distributed,
bringing solar power to around four million people.
"Right now 2.5 million people are benefiting from solar energy and
we have a plan to reach 10 million people by the end of 2012," said
Dipal Chandra Barua, managing director of Grameen Shakti, an
offshoot of 2006 Nobel Peace Prize winner Grameen Bank which
encourages the use of alternative energy.
Alternative power
In India, renewable energy makes up less than three percent of the
country's total installed capacity, with wind accounting for much
of this contribution.
Investor interest in solar is growing, and a new solar plan for the
country is to be unveiled by December, around the same time as a
global climate change summit in Copenhagen.
In western Gujarat state, which launched its own solar mission
earlier this year, mega solar parks are planned.
But even here, it is microfinance that is helping power lights
and stoves in rural homes and small towns, where power outages are
common.
REEEP, which is developing 10 renewable energy projects with
microfinancing, estimates that 234 billion rupees ($65 billion) is
needed to provide solar lanterns to 65 million rural homes.
This amount is less than half of the total subsidy the government
provides to make kerosene affordable for the poor.
Some of this money will come from MFIs, who face a much smaller
risk on the small, short-term loans for solar
appliances.
REEEP, along with energy research institute TERI, is
spearheading the lighting a billion lives campaign, which seeks to
replace kerosene and paraffin lanterns with solar devices.
Launched last year with partners including the Clinton Climate
Initiative, it has so far covered more than 100 villages.
Sewa's Project Urja ("energy"), with funding from US-based Lemelson
Foundation, partners with India's Solar Electric Light Co (SELCO)
to improvise lighting and cooking devices.
"It's cheaper, healthier and it's low maintenance," said Pinal
Shah, in charge of energy projects at Sewa Bank, which has
disbursed more than six million rupees ($165,867) in loans for
solar appliances to about 10% of its 300,000 members.
SELCO's other devices include headlamps for midwives, solar lights
for farmers breeding silk worms for India's silk industry and
sewing machines powered by solar power.
In the congested Jamalpur neighbourhood in Ahmedabad, Salma
Mohammad's small corner shop is lit by a solar-powered battery that
she bought with a loan of 33,000 rupees from Sewa Bank.
"This shop has helped me raise my children," she said.
"The solar battery has improved our lives, given us much to be grateful."
