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| = Overview<br/> = | | = Overview<br/> = |
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− | The following article details the proceedings of the [[Micro_Perspectives_for_Decentralized_Energy_Supply_-_Conference_2013|Micro Perspectives for Decentralized Energy Supply Conference - 2013]]<br/> | + | The following article details the proceedings of the [[Micro Perspectives for Decentralized Energy Supply - Conference 2013|Micro Perspectives for Decentralized Energy Supply Conference - 2013]]<br/> |
| <div> | | <div> |
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| == Background<br/> == | | == Background<br/> == |
| <div class="mw-collapsible mw-collapsed"> | | <div class="mw-collapsible mw-collapsed"> |
− | | + | This paper analyses the economics of a [[Photovoltaic (PV)|Solar-PV]] based ‘Multi Utility Business Centre’ (MUBC) which provides electricity for productive applications. The project is carried out in India by TERI. It aims to provide decentralized power plant through solar energy and facilitates new business activities in three states in India. Electricity from a solar power plant facilitates a variety of business activities ranging from operating different appliances and machines such as fruit pulpers, water purifiers, grinders, driers, etc. Self Help Groups, Farmer’s Associations and Individuals from the surrounding villages access this SMU and utilize services for a fee. |
− | This paper analyses the economics of a [[Photovoltaic_(PV)|Solar-PV]] based ‘Multi Utility Business Centre’ (MUBC) which provides electricity for productive applications. The project is carried out in India by TERI. It aims to provide decentralized power plant through solar energy and facilitates new business activities in three states in India. Electricity from a solar power plant facilitates a variety of business activities ranging from operating different appliances and machines such as fruit pulpers, water purifiers, grinders, driers, etc. Self Help Groups, Farmer’s Associations and Individuals from the surrounding villages access this SMU and utilize services for a fee. | + | |
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| <br/></div> | | <br/></div> |
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| == Objective<br/> == | | == Objective<br/> == |
| <div class="mw-collapsible mw-collapsed"> | | <div class="mw-collapsible mw-collapsed"> |
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| To develop a model for how different business activities in a decentralized solar powered business unit can be priced, cross-subsidized and what affect the ratio of equity to grant has at various points in the system | | To develop a model for how different business activities in a decentralized solar powered business unit can be priced, cross-subsidized and what affect the ratio of equity to grant has at various points in the system |
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| <br/></div> | | <br/></div> |
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| == Approach<br/> == | | == Approach<br/> == |
| <div class="mw-collapsible mw-collapsed"> | | <div class="mw-collapsible mw-collapsed"> |
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| One site among 7 such solar power '''Multi Utility Business Centers (MUBC)''' has been chosen for the study. The business unit charges a certain fee for each service provided. The unit itself is common property of the village, managed and owned by community members and not restricted to any one household. Surveys/FGIs/PRA techniques were utilized to estimate user demands, possible technical interventions for productive activities and ability to pay, among other factors, for the implementation of this MUBC. | | One site among 7 such solar power '''Multi Utility Business Centers (MUBC)''' has been chosen for the study. The business unit charges a certain fee for each service provided. The unit itself is common property of the village, managed and owned by community members and not restricted to any one household. Surveys/FGIs/PRA techniques were utilized to estimate user demands, possible technical interventions for productive activities and ability to pay, among other factors, for the implementation of this MUBC. |
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| <br/></div> | | <br/></div> |
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| === Unit 1 – SPVPP<br/> === | | === Unit 1 – SPVPP<br/> === |
| <div class="mw-collapsible mw-collapsed"> | | <div class="mw-collapsible mw-collapsed"> |
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| - Based on the Grant: Equity ratio, the Equity component has been used to calculate the LUCE (calculated considering outflows of annualised capital cost, operation and maintenance costs and battery replacement costs; and sale of electricity for cash inflows assuming an 8 kWp power plant operates for 350 days per year and produces 30 kWh per day). A sensitivity analysis was conducted for LUCE versus grant to equity ratio to determine the effects of the ratio on the LUCE and at what ratio the LUCE is equal to the current market price of grid electricity. | | - Based on the Grant: Equity ratio, the Equity component has been used to calculate the LUCE (calculated considering outflows of annualised capital cost, operation and maintenance costs and battery replacement costs; and sale of electricity for cash inflows assuming an 8 kWp power plant operates for 350 days per year and produces 30 kWh per day). A sensitivity analysis was conducted for LUCE versus grant to equity ratio to determine the effects of the ratio on the LUCE and at what ratio the LUCE is equal to the current market price of grid electricity. |
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| <br/></div> | | <br/></div> |
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| === Unit 2 – MUBC<br/> === | | === Unit 2 – MUBC<br/> === |
| <div class="mw-collapsible mw-collapsed"> | | <div class="mw-collapsible mw-collapsed"> |
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| - The calculations lead us to the price per unit charged for each service provided. Annualized appliance capital cost, cost for units of electricity consumed for each service (on a per kilogram, hour or liter basis), appliance O&M including operator salary, logistics, inflation, taxes and profit margins. The percentage or money value of each of these components has been derived from the field survey conducted in 2012 in the same site and inputs from subject experts. This service charge is capped by an upper limit of the '''Ability To Pay (ATP)''' of customers, which depends either on prevailing market rates for the same service in nearby towns or on findings from the survey of potential customers.<br/> | | - The calculations lead us to the price per unit charged for each service provided. Annualized appliance capital cost, cost for units of electricity consumed for each service (on a per kilogram, hour or liter basis), appliance O&M including operator salary, logistics, inflation, taxes and profit margins. The percentage or money value of each of these components has been derived from the field survey conducted in 2012 in the same site and inputs from subject experts. This service charge is capped by an upper limit of the '''Ability To Pay (ATP)''' of customers, which depends either on prevailing market rates for the same service in nearby towns or on findings from the survey of potential customers.<br/> |
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| <br/></div> | | <br/></div> |
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| === Unit 3 – Customers/Users<br/> === | | === Unit 3 – Customers/Users<br/> === |
| <div class="mw-collapsible mw-collapsed"> | | <div class="mw-collapsible mw-collapsed"> |
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| The customers either directly use the service (TV-DVD, Water) or Take the final product to the market to sell at a sale price that includes raw material cost, service charge from the MUBC, logistics, inflation, taxes and profit margins as per the requirement of the business and activity. This is capped by the upper limit of prevailing market rates of such products. This sale price is directly affected by the service charge from the MUBC which is further affected by the LUCE from the SPVPP. | | The customers either directly use the service (TV-DVD, Water) or Take the final product to the market to sell at a sale price that includes raw material cost, service charge from the MUBC, logistics, inflation, taxes and profit margins as per the requirement of the business and activity. This is capped by the upper limit of prevailing market rates of such products. This sale price is directly affected by the service charge from the MUBC which is further affected by the LUCE from the SPVPP. |
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| <br/></div> | | <br/></div> |
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| == Results<br/> == | | == Results<br/> == |
| <div class="mw-collapsible mw-collapsed"> | | <div class="mw-collapsible mw-collapsed"> |
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| Effect of grant and equity ratio on LUCE | | Effect of grant and equity ratio on LUCE |
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| |} | | |} |
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| <br/></div> | | <br/></div> |
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| == Discussion<br/> == | | == Discussion<br/> == |
| <div class="mw-collapsible mw-collapsed"> | | <div class="mw-collapsible mw-collapsed"> |
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| The discussion revolved around the financing model of the project, the assessment of willingness to pay by the customers and the technical aspect of the project. | | The discussion revolved around the financing model of the project, the assessment of willingness to pay by the customers and the technical aspect of the project. |
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| - The peak load is management is done through smart metering | | - The peak load is management is done through smart metering |
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| = Micro Financing Decentralized Solar Energy Systems in India: Problems in Up Scaling and Mainstreaming<br/> = | | = Micro Financing Decentralized Solar Energy Systems in India: Problems in Up Scaling and Mainstreaming<br/> = |
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| Satish Pillarisetti, National Bank for Agriculture and Rural Development, India<br/> | | Satish Pillarisetti, National Bank for Agriculture and Rural Development, India<br/> |
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| == Background == | | == Background == |
| <div class="mw-collapsible mw-collapsed"> | | <div class="mw-collapsible mw-collapsed"> |
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| The project has been carried out by '''NABARD (National Bank for Agriculture and Rural Development''''') ''to promote decentralized solar energy systems in India. The project is undertaken to compliment the efforts by the Indian central government, under the Jawaharlal Nehru National Solar Mission, which aims to achieve 20 megawatts by 2022. The project is motivated by the rural banks-pioneers in financing solar home lighting units undertaken by Aryavart Gramin Bank in Utter Pradesh state in India. | | The project has been carried out by '''NABARD (National Bank for Agriculture and Rural Development''''') ''to promote decentralized solar energy systems in India. The project is undertaken to compliment the efforts by the Indian central government, under the Jawaharlal Nehru National Solar Mission, which aims to achieve 20 megawatts by 2022. The project is motivated by the rural banks-pioneers in financing solar home lighting units undertaken by Aryavart Gramin Bank in Utter Pradesh state in India. |
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| <br/></div> | | <br/></div> |
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| == Objective == | | == Objective == |
| <div class="mw-collapsible mw-collapsed"> | | <div class="mw-collapsible mw-collapsed"> |
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| Encourage replacement of non-renewable energy sources like fossil fuels, kerosene and diesel with solar PV and solar thermal off-grid applications of solar energy. The applications targeted are solar home lighting systems, thermal applications like water heaters, other power applications like irrigation pump sets and other electricity/power applications etc. The aim till 2013 is to produce 200 megawatts of off-grid solar power and further expand thereon. | | Encourage replacement of non-renewable energy sources like fossil fuels, kerosene and diesel with solar PV and solar thermal off-grid applications of solar energy. The applications targeted are solar home lighting systems, thermal applications like water heaters, other power applications like irrigation pump sets and other electricity/power applications etc. The aim till 2013 is to produce 200 megawatts of off-grid solar power and further expand thereon. |
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| <br/></div> | | <br/></div> |
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| == Approach == | | == Approach == |
| <div class="mw-collapsible mw-collapsed"> | | <div class="mw-collapsible mw-collapsed"> |
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| The project offers financing schemes which complements the effort of the Indian Ministry of New and Renewable Energy. The funding of the scheme is given by Ministry of New and Renewable Energy (MNRE) of through Indian Renewable Energy Development Agency and administered by NABARD. NABARD provides 30% capital subsidy (through MNRE subsidy) along 50% as subsidized loan (5% interest per annum), the balance (20%) being the margin money. The loan is distributed through local commercial Banks and Rural Banks. This scheme makes it easier for customers to assess finance. | | The project offers financing schemes which complements the effort of the Indian Ministry of New and Renewable Energy. The funding of the scheme is given by Ministry of New and Renewable Energy (MNRE) of through Indian Renewable Energy Development Agency and administered by NABARD. NABARD provides 30% capital subsidy (through MNRE subsidy) along 50% as subsidized loan (5% interest per annum), the balance (20%) being the margin money. The loan is distributed through local commercial Banks and Rural Banks. This scheme makes it easier for customers to assess finance. |
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| Benefits of solar energy, scheme details and finance facilities explained in detail through Audio-visuals and demonstration kits used. | | Benefits of solar energy, scheme details and finance facilities explained in detail through Audio-visuals and demonstration kits used. |
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| <br/></div> | | <br/></div> |
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| == Project Outcome == | | == Project Outcome == |
| <div class="mw-collapsible mw-collapsed"> | | <div class="mw-collapsible mw-collapsed"> |
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| Progress of the scheme was dismal in general. In 2011-12 all banks together financed only 45,034 units. A ground level analysis was done to assess the poor performance. It was learned that the scheme design itself was faulty. The two components of capital subsidy and soft loan made it cumbersome and compulsory refinance from NABARD dissuaded some banks which had surplus funds. Moreover Cooperative banking system with a network of 120,000 outlets excluded from the scheme. | | Progress of the scheme was dismal in general. In 2011-12 all banks together financed only 45,034 units. A ground level analysis was done to assess the poor performance. It was learned that the scheme design itself was faulty. The two components of capital subsidy and soft loan made it cumbersome and compulsory refinance from NABARD dissuaded some banks which had surplus funds. Moreover Cooperative banking system with a network of 120,000 outlets excluded from the scheme. |
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| The way forward for the project is include cooperative banking system into the scheme to capitalize on the vast network of 120,000 outlets and banking sector has to take more interest in this scheme and it has to be mainstreamed as a regular credit product of banks. Secondly public private partnership mode for motivating and sensitizing borrowers and a mechanism for servicing and maintenance should be in built into the scheme. And lastly a number of organizations like SELCO Foundation, TERI etc. are working to popularize the scheme to take it to a take-off stage. In many areas they are working along with NABARD in pursuit of this goal. | | The way forward for the project is include cooperative banking system into the scheme to capitalize on the vast network of 120,000 outlets and banking sector has to take more interest in this scheme and it has to be mainstreamed as a regular credit product of banks. Secondly public private partnership mode for motivating and sensitizing borrowers and a mechanism for servicing and maintenance should be in built into the scheme. And lastly a number of organizations like SELCO Foundation, TERI etc. are working to popularize the scheme to take it to a take-off stage. In many areas they are working along with NABARD in pursuit of this goal. |
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| <br/></div> | | <br/></div> |
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| == Discussion == | | == Discussion == |
| <div class="mw-collapsible mw-collapsed"> | | <div class="mw-collapsible mw-collapsed"> |
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| The discussions were mainly focused on the rational of the modification of the scheme, the marketing and operation of the scheme and the way forward for such schemes. | | The discussions were mainly focused on the rational of the modification of the scheme, the marketing and operation of the scheme and the way forward for such schemes. |
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| - Mobilizing and building networks is still a challenge due to low social awareness about solar systems. Many other partners like cooperative banks, NGOs, farmers clubs etc. will need to be further explored. Along with it collaboration with other agencies both government and private will be explored. | | - Mobilizing and building networks is still a challenge due to low social awareness about solar systems. Many other partners like cooperative banks, NGOs, farmers clubs etc. will need to be further explored. Along with it collaboration with other agencies both government and private will be explored. |
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| <br/></div> | | <br/></div> |
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| = Solar Lanterns Transformations Life in Rural Tanzania = | | = Solar Lanterns Transformations Life in Rural Tanzania = |
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| == Background == | | == Background == |
| <div class="mw-collapsible mw-collapsed"> | | <div class="mw-collapsible mw-collapsed"> |
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| Tanzania has amongst the lowest electrification rate in Africa. The project tries to introduce decentralized source of lighting through solar energy in rural areas. As the cost of such systems requires high initial down payment the project introduces revolving loan funds to finance rural lighting systems in southern highlands of Tanzania. | | Tanzania has amongst the lowest electrification rate in Africa. The project tries to introduce decentralized source of lighting through solar energy in rural areas. As the cost of such systems requires high initial down payment the project introduces revolving loan funds to finance rural lighting systems in southern highlands of Tanzania. |
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| <br/></div> | | <br/></div> |
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| == Objective == | | == Objective == |
| <div class="mw-collapsible mw-collapsed"> | | <div class="mw-collapsible mw-collapsed"> |
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| Identify and utilize existing SACCO's network in rural areas and for financing, management and distribution of rural lighting systems. | | Identify and utilize existing SACCO's network in rural areas and for financing, management and distribution of rural lighting systems. |
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| <br/></div> | | <br/></div> |
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| == Approach == | | == Approach == |
| <div class="mw-collapsible mw-collapsed"> | | <div class="mw-collapsible mw-collapsed"> |
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| Identify and review existing network of SACCOS in rural areas for their willingness to participate in the project. Once the SACCOS are identified then selected managers are trained in bookkeeping and overall project management. Rural home lighting systems are then procured from manufacturers/suppliers and supplied and managed through the SACCOS. | | Identify and review existing network of SACCOS in rural areas for their willingness to participate in the project. Once the SACCOS are identified then selected managers are trained in bookkeeping and overall project management. Rural home lighting systems are then procured from manufacturers/suppliers and supplied and managed through the SACCOS. |
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| <br/></div> | | <br/></div> |
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| == Project output == | | == Project output == |
| <div class="mw-collapsible mw-collapsed"> | | <div class="mw-collapsible mw-collapsed"> |
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| 40 SACCOS have been identified and successfully operational. | | 40 SACCOS have been identified and successfully operational. |
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| The types of solar lanterns supplied to the SACCOS from July-Nov. 2011 are given<br/> | | The types of solar lanterns supplied to the SACCOS from July-Nov. 2011 are given<br/> |
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| <br/></div> | | <br/></div> |
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| == Discussion == | | == Discussion == |
| <div class="mw-collapsible mw-collapsed"> | | <div class="mw-collapsible mw-collapsed"> |
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| The discussions were mainly focused on the selection of SACCOS, operation of individual SACCOS, business expansion, financing and quality of the product. | | The discussions were mainly focused on the selection of SACCOS, operation of individual SACCOS, business expansion, financing and quality of the product. |
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| - The quality of the product is marketed during the training of SACCO's member. Guarantee labels in the products are illustrated and defective products are analyzed and repaired and if possible replaced. | | - The quality of the product is marketed during the training of SACCO's member. Guarantee labels in the products are illustrated and defective products are analyzed and repaired and if possible replaced. |
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| = Business Models for Solar-based Rural Electrification = | | = Business Models for Solar-based Rural Electrification = |
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| Hugo Niccolaï, Design engineer for stand-alone RE systems, EnR'Sud (France) | | Hugo Niccolaï, Design engineer for stand-alone RE systems, EnR'Sud (France) |
| </div> | | </div> |
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| == Background == | | == Background == |
| <div class="mw-collapsible mw-collapsed"> | | <div class="mw-collapsible mw-collapsed"> |
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| The research has been carried out in 18 months across South America, Africa and Asia. The study is conducted to evaluate business models for decentralized Solar-Based rural electrification. | | The research has been carried out in 18 months across South America, Africa and Asia. The study is conducted to evaluate business models for decentralized Solar-Based rural electrification. |
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| <br/></div> | | <br/></div> |
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| == Objective == | | == Objective == |
| <div class="mw-collapsible mw-collapsed"> | | <div class="mw-collapsible mw-collapsed"> |
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| Design business models for solar-based rural electrification. | | Design business models for solar-based rural electrification. |
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| <br/></div> | | <br/></div> |
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| == Approach == | | == Approach == |
| <div class="mw-collapsible mw-collapsed"> | | <div class="mw-collapsible mw-collapsed"> |
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| Decentralized business models for rural electrification in South America, Africa and Asia are evaluated to assess the best practices and design business models. | | Decentralized business models for rural electrification in South America, Africa and Asia are evaluated to assess the best practices and design business models. |
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| <br/></div> | | <br/></div> |
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| == Project Output == | | == Project Output == |
| <div class="mw-collapsible mw-collapsed"> | | <div class="mw-collapsible mw-collapsed"> |
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| <u>Key learning:</u> | | <u>Key learning:</u> |
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| *Located areas to minimize costs | | *Located areas to minimize costs |
| *Interactive database to follow customers and new beneficiaries | | *Interactive database to follow customers and new beneficiaries |
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| <br/></div> | | <br/></div> |
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| == Discussion == | | == Discussion == |
| <div class="mw-collapsible mw-collapsed"> | | <div class="mw-collapsible mw-collapsed"> |
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| The discussions were mainly focused on the nature of financing across the globe, role of international agencies for successful rural electrification programs and overall trend observed from successful case study. | | The discussions were mainly focused on the nature of financing across the globe, role of international agencies for successful rural electrification programs and overall trend observed from successful case study. |
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| -There is no universal model. Cases differ as per the local social and economic conditions. However in most case ensuring customer satisfaction, community participation, and ooptimizing operation and logistic of the project emerge as a major them for success. | | -There is no universal model. Cases differ as per the local social and economic conditions. However in most case ensuring customer satisfaction, community participation, and ooptimizing operation and logistic of the project emerge as a major them for success. |
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| <br/></div> | | <br/></div> |
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| = Further Information = | | = Further Information = |
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| = References = | | = References = |
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| <references /><br/> | | <references /><br/> |
| </div> | | </div> |
| + | <br/> |
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| + | [[Category:Conference_Documentation]] |
| + | [[Category:Financing_and_Funding]] |
| + | [[Category:Financing_Solar]] |
| + | [[Category:India]] |
| + | [[Category:Solar]] |
| + | [[Category:Tanzania]] |
| + | [[Category:Lessons_Learned]] |
| [[Category:Rural_Electrification]] | | [[Category:Rural_Electrification]] |
− | [[Category:Lessons_Learned]]
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− | [[Category:Tanzania]]
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− | [[Category:Solar]]
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− | [[Category:India]]
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− | [[Category:Financing_Solar]]
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− | [[Category:Financing_and_Funding]]
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− | [[Category:Conference_Documentation]]
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By K. Rahul Sharma - TERI India
Hugo Niccolaï, Design engineer for stand-alone RE systems, EnR'Sud (France)
</div>