Business innovation and diffusion of off-grid solar technologies in India

a r t i c l e i n f o India is a country where 300 million people still live without access to formal electricity, and where hundreds of millions more live with irregular supply through the existing grid network. This paper examines business innovation in the diffusion of off-grid solar technologies in India. An in-country survey of off-grid solar energy providers from across the nation was conducted and coupled with extensive field interviews. Findings reveal that most off-grid solar energy enterprises are not operating in the government subsidy market and that more than half are not offering any form of financing to their customers when selling their products. Also, more than half of the enterprises are selling their products in areas where the electric grid is present. Analysis of data collected suggests that an increase in product categories (lanterns, solar home lighting systems (SHS), micro-grids, etc.) negatively affects unit scaling for a firm but increases the likelihood that the firm is offering financing for its products. In areas without the electricity grid, the number of off-grid solar technology options decreases because the firms operating in the area have fewer categories of technology options. This study finds that off-grid solar technology enterprises that focus on fewer technology categories are more likely to achieve unit scaling. This finding must be balanced with the fact that the extent of the grid has not inhibited the market for off-grid solar technologies, but rather affects the number of categories of technologies that can be offered in those regions. Development programs should thus recognize that those who need electricity access the most may be the ones with the most limited technology options. Introduction This study examines the existing and emerging business models for the distribution of off-grid solar technologies in India. It explores why certain models or type of networks help facilitate the diffusion of off-grid solar technologies more than others. For example, do firms that provide energy for multiple purposes achieve greater scale than those just providing energy for lighting? And what lessons can be learned from technology-type choice and its impacts on scaling? The study examines unit scaling of the number of products a company has distributed based on whether or not the firms are selling their products in areas connected to the electricity grid, and whether or not they are providing financing, or using government subsidies. It also assesses the number …