The Ministry of New and Renewable Energy (MNRE) has issued the framework to promote and develop decentralized renewable energy-based livelihood applications.
Decentralized renewable energy livelihood applications are solutions powered by renewable energy, which are used for earning a livelihood, such as solar dryers, solar mills, biomass-powered cold storage, solar charkha and loom, and biomass pellet making machines, among others.
According to the Ministry, several livelihood applications could be integrated with decentralized renewable energy sources to not only provide clean energy but also help in increasing the productivity and income of the consumers. It can reduce and eventually eliminate the reliance of livelihood on diesel, particularly in rural areas, and supplement the grid supply.
Backed by the successful application of decentralized renewable energy-based solutions across agriculture, agro-processing, dairy, poultry, fisheries, tailoring, etc., the MNRE intends to replicate it in larger quantities in the overall spectrum of livelihood activities throughout India.
Earlier in October 2020, MNRE had proposed the policy framework to promote decentralized renewable energy systems for livelihood generation in rural India.
The major objectives to promote decentralized renewable energy livelihood applications include:
- Enable a market-oriented ecosystem to attract the private sector investment for the development and deployment of reliable and affordable decentralized renewable energy-based livelihood applications
- Unlock easy access to end-user finance to increase adoption of decentralized renewable energy-based livelihood solutions by linking them to existing financing programs or through new financial programs
- Leverage quality control standards and a robust monitoring & evaluation framework to ensure long-term performance sustainability of decentralized renewable energy-based livelihood solutions
- Promote high-quality products and their long-term management
- Promote skill development for strengthening the service infrastructure
- Encourage innovation and R&D to develop cost-effective decentralized renewable energy livelihood applications
- Establish energy-efficiency benchmarks for high-potential decentralized renewable energy livelihood products
- Collaborate with ministries to include decentralized renewable energy-based livelihood applications in their programs
- Creation of livelihood opportunities in technology innovation value chain of decentralized renewable energy applications
The Ministry will assess the potential for the deployment of decentralized renewable energy livelihood applications across various sectors and different regions of the country. The demand assessment activity will help map the needs of the beneficiaries and find the right decentralized renewable energy livelihood application.
The Ministry will develop a list of decentralized renewable energy applications updated regularly.
Research and development
Institutions at the central and state level will be required to support the development of new devices and applications. Also, efforts will be made to encourage the participation of the private sector, technology incubation centers, bilateral and multilateral agencies, and NGOs involved in research and development activities.
The technology transfer support for innovators will be arranged through existing government programs that provide necessary technical and financial support.
To promote innovation in the sector while also ensuring that only good quality products are scaled up, guidelines and standards for the system components will be specified. A technical and skill sub-committee including representatives from industry, R&D, and academia will be constituted to assess the requirement, development, and maturity of decentralized renewable energy livelihood applications.
Scaling up of decentralized renewable energy livelihood applications
The field demonstration of new decentralized renewable energy livelihood applications will be carried out to determine the impact of technology innovation on the ground. In line with the guidelines issued by MNRE for innovative solar pumps, similar modalities will be worked out to run pilot projects under the existing or new programs.
Incubation and pilot support for decentralized renewable energy-based livelihood enterprises will be facilitated through collaborations with various organizations.
As per the new framework, to maintain the long-term sustainability of the installations, a robust after-sales service will be encouraged through appropriate incentives. Also, a monitoring platform will be developed, in collaboration with relevant partners, to track the long-term performance of the supported installations.
Access to finance
In partnership with financial institutions, a financing facility offering a first loss default guarantee with partial risk coverage will be designed to help entrepreneurs and end-users get access to credit. Such a facility would encourage financing to women, self-help groups, and collectives.
Acquisition of assets is particularly challenging for micro-businesses, marginalized groups, and women. Therefore, enterprises with OPEX-based financial models such as pay-as-you-go and rental models will also be supported for credit facilitation.
Further, to enable end-user financing, decentralized renewable energy-based livelihood solutions will be recognized under the existing provisions of the priority sector lending. Preference will be given to decentralized renewable energy-enabled variants of technologies under the existing programs like the Rural Innovation Development Fund.
In collaboration with relevant partners, MNRE will commission the development of rapid assessment tools, which bankers and financiers could use to assess the economic viability of decentralized renewable energy livelihood solutions for various end-users.
According to the framework, efforts will be made for developing and implementing skills and training programs for decentralized renewable energy livelihood applications with Skill Council for Green Jobs, IITs promoting technology-led development, National Institute for Rural Development, and other organizations. In addition, efforts will also be made with the governing bodies of other sector skill councils to integrate training modules for decentralized renewable energy technologies across sectors.
Also, existing community-level institutional platforms will be mobilized with the support of technology providers to build the capacity of potential users and buyers on basic troubleshooting of the equipment to boost the adoption of decentralized renewable energy technologies.
In collaboration with relevant partners, MNRE will release a digital catalog/portal of decentralized renewable energy-powered livelihood solutions updated regularly, which various stakeholders could use for awareness creation. Decentralized renewable energy for livelihood innovators or technology providers will be able to share their product information through the portal, which will be reviewed and updated regularly.
Under their existing programs, central and state government ministries and departments may take up public awareness campaigns to scale up the adoption of decentralized renewable energy livelihood applications. Proactive information exchange with the state nodal agencies for disseminating information and cross-fertilizing the ideas across states will be encouraged.
Programs of various departments
MNRE would coordinate with the ministries to integrate decentralized renewable energy-based livelihood applications into their implementation and act as a platform for knowledge exchange and feedback. An inter-ministerial coordination committee on decentralized renewable energy-based livelihood applications will be constituted under the chairmanship of the secretary of MNRE. The committee will meet at least once every six months. Each member ministry will appoint a focal point of contact for inter-ministerial coordination within the committee.
The Ministry has indicated that state nodal agencies may form an implementation cell for decentralized renewable energy-based livelihood applications bringing the state departments engaged in implementing such applications on a common platform.
Last October, MNRE issued a downward revision of benchmark costs excluding taxes for decentralized and off-grid solar systems for the financial year (FY) 2021-22. The amended benchmark costs included the total cost of the system and its installations, commissioning, transportation, insurance, warranty, monitoring, and maintenance for five years.
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Rakesh Ranjan is a staff reporter at Mercom India. Prior to joining Mercom, he worked in many roles as a business correspondent, assistant editor, senior content writer, and sub-editor with bcfocus.com, CIOReview/Silicon India, Verbinden Communication, and Bangalore Bias. Rakesh holds a Bachelor’s degree in English from Indira Gandhi National Open University (IGNOU). More articles from Rakesh Ranjan.