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05 DISTRIBUTED RENEWABLE ENERGY the development of new business models and strengthening private sector capacity.68 The programme focusses on improving cookstove design and quality, including component durability and performance; developing a combination of standards and rigorous monitoring and supervision; and achieving affordability through a mix of direct incentives, micro-loans, and payments for environmental services.69 India has also supported the dissemination of clean cookstoves, and revisited its programme in 2013. India's National Programme on Improved Cookstoves had some success at the state level, but it faced challenges nationally due to lack of consumer awareness, a dearth of sustainable financing sources, and issues related to stove quality and upkeep.70 The focus was changed from disbursement of cookstoves to a broader programme aimed at delivering health benefits through clean biomass combustion with quality control and monitoring efforts. Use of traditional biomass, charcoal, and coal-fuelled cookstoves can result in severe adverse health and environmental impacts from black carbon and other particulate emissions. These emissions cause as many as 4 million premature deaths globally every year. Further, use of traditional biomass can accelerate rates of land degradation and deforestation.71 Hence, the new initiative has been well received even at the national level.72Markets and Business Models Historically, energy access programmes were developed and implemented by national and local governments, international development agencies, and non-governmental organisations. In the last decade, the provision of energy services to rural markets has evolved from a centralised, public sector-led approach to one more focussed on public-private partnerships and private ventures in which renewable energy plays a key role. With the increasing awareness that off-grid, low-income customers represent fast-growing markets for goods and services—as in the mobile phone market—and with the emergence of new business and financing models for serving them, rural energy markets are increasingly being recognised as potential business opportunities.73 Further, there is a growing awareness that isolated cooking and electricity systems, particularly those based on renewables, are often the most cost-effective options available for providing energy services to households and businesses in remote areas. This is increasingly the case as technologies continue to improve and costs decline. As a result, a growing number of parties—ranging from international businesses to small- and medium-scale businesses and initiatives—have established themselves in the distributed renewable energy market.74 Many companies are now active across Africa, Asia, and Latin America, selling household-level energy systems and devices, with several already serving tens to hundreds of thousands of customers.75 Commercial lenders and banks, social venture capitalists, local development banks, philanthropists, governments, and international development agencies are all actively engaged in the financing of distributed renewable energy. However, participation varies from country to country depending on political stability, support policies, broader legal frameworks, and other factors. Innovative multi-stakeholder business models continue to emerge for providing customised and financially sustainable services based on renewable energy across the spectrum of rural energy needs. Characteristics of these business models include public-private partnerships, pay-as-you-go micro-payment options, one-stop-shops, leasing, franchise, and service models. The public-private partnership model first gained popularity in the 1990s, when public and private partners collaborated in the implementation and financing of energy access projects. All movable assets were owned by the private sector, while fixed assets, such as power plants and distribution lines, were publicly owned. The plant was managed by the village committee and designed based on customer needs, with customers being allotted energy blocks according to their energy demand requirements and capacity to pay. This model is being replicated in the Philippines, Nepal, and other Asian countries.76 Pay-as-you-go (PAYG) micro-payment schemes have become one of the most popular business models. They are especially effective for solar technologies such as solar-powered charger kits because price levels and schedules are set to match customers’ variable cash flows and their energy consumption patterns.77 Under such schemes, customers typically pay a small upfront fee for a solar charger kit, a portable system that includes a 2–5 W solar PV panel, and a control unit that can be used for powering LED lights and charging devices such as mobile phones. They then pay for the energy they need, either in advance or on a regular basis, depending on consumption. Pre-existing distribution systems for mobile phones increase the efficiency of PAYG schemes because customers can make payments in small increments by phone as they do for mobile usage. Usually, solar kits are paid off after about 18 months, at which time customers own the kits and receive the subsequent electricity for free.78 An increasing number of households in sub-Saharan Africa are accessing energy through the PAYG system, paying about half of what it would cost them to get the same services with kerosene.79 Such schemes were also used in India during 2013 to provide off-grid and decentralised solar power. However, some challenges still need to be addressed. For example, companies face severe cash flow constraints when consumers default on payments because the market currently lacks debt-servicing instruments.80 One-stop-shop models are also expanding in use. Under this model, a single organisation both sells the renewable energy home systems and provides loans to pay for them. This is 98PDF Image | About ElectraTherm
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