In this Guest Blog, Sanjoy Sanyal and Pamli Deka introduce New Ventures India’s methodology to identify micro-markets for clean energy access.
“Focusing on a district can yield rich dividends for clean energy access. The key is to choose the micro-market where the need translates to demand.”
Here are New Ventures India’s methodology[1] and recommendations to best identify markets where decentralized renewable energy (DRE) products and services will have the potential to successfully be deployed and where entrepreneurs should focus to scale.
- Use a robust methodology – three factors for identifying micro markets for DRE access
- Focus on a district to achieve meaningful revenue
- Develop partnerships in the micro-markets to reach scale
- Identify a micro-market within a cluster
- Use a robust methodology – three factors for identifying micro markets for DRE access
Through our Micro-Markets analysis, we have identified target geographical markets and districts in Indian states where more than 25% of the rural population lives in darkness. Besides un-electrification, we consider three determining factors to identify a market for decentralized renewable energy (DRE):
- access to finance
- economic buoyancy
- grid growth
As a result, we estimate that 321 districts with 67.6 million households across 10 states have a rural un-electrification rate of more than 25%.
Taking into account the three criteria (access to finance, economic buoyance and grid growth) the total addressable market for the deployment of DRE products and services is estimated to reach 15.9 million households within 80 districts.
- Focus on a district to achieve meaningful revenue
An individual district is a large enough market which you can tap with limited resources.
Take Gorakhpur in Eastern Uttar Pradesh. 10% penetration of solar products translates into a market of 38,000 solar systems. At an average price of INR 10,000 for a 20-watt system, the market size is equivalent to INR 38 Crore or USD $6.3 million.
- Develop partnerships in the micro-markets to reach scale
Enterprises should focus on developing partnerships at a district level, with the local rural banks, micro finance institutions, and community organizations. NVI also recommend to work with the local government authorities to ensure the deployment and the scale of clean energy access projects.
4. Identify a micro-market within a cluster
Pick your district in a cluster of similar districts so you can move to adjoining districts. We have identified clusters in eastern Uttar Pradesh, western Bihar, central Maharashtra and several other states.
For more information on New Ventures India’s approach read: http://www.nvindia.biz/resources-micro-markets-for-clean-energy-access.html or contact Sanjoy at [email protected] or Pamli at [email protected]
[1] Based on Census 2011 data in India