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Electricity Without the Grid

Distributed electric generation is a vital tool in the fight against energy poverty around the world.

Raul Paz observes solar panels on a school in the rural community of San Ramon, Honduras, December 2001. (AP/Esteban Felix)
Raul Paz observes solar panels on a school in the rural community of San Ramon, Honduras, December 2001. (AP/Esteban Felix)

See also: A Brighter Future for India: Harnessing the Sun to Bring Light to the Rural Poor by Andrew Satter and Rebecca Lefton

Around the world, approximately 1.4 billion people, or one in five, lack any access to electricity. Millions more are limited to only intermittent access. This is commonly referred to as “energy poverty.” Energy poverty remains a primary barrier to improving economic growth and well-being in the world’s poorest communities. It disproportionately affects people living in rural areas, as many energy-deficient communities are located in areas that are too remote or impoverished to attract investment for centralized grid access. Now, new off-grid clean energy technology is revolutionizing electricity access in developing countries around the world.

The lack of energy access negatively affects many areas of daily life. Energy poverty has left more than 1 billion people in developing countries without access to adequate health care because the lack of electricity means health care facilities have to treat patients in the dark and cannot store medical supplies in refrigerated, sterile environments. Without the ability to store vaccines, blood, and some medicines at a constant temperature, these potentially life-saving treatments may go to waste. In India, 46 percent of the country’s health care facilities, which serve around 580 million people, operate without electricity.

In addition to the detrimental health effects, energy poverty also hinders the educational opportunities for children in many parts of the world. Electricity improves classroom lighting, can help schools stay open after dark, and provides adequate heating and cooling that can enhance students’ concentration. Half of the primary school students in developing countries attend schools without electricity. This number is even higher in sub-Saharan Africa and South Asia, where 65 percent and 52 percent of primary schools lack access to electricity, respectively. In India, less than half of primary schools have access to electricity.

Of the approximately 120 million children attending school in India, 70 percent rely on oil or kerosene to illuminate their studies after sunset. Kerosene, the primary source of lighting in many households without electricity, has many drawbacks. It is highly flammable and can cause house fires and burns. In southern India, burns are the number two cause of childhood injuries or deaths, about half of which are caused by kerosene lamps. Kerosene also contributes to indoor air pollution, which causes asthma and other respiratory illnesses. Finally, in rural communities, kerosene is often an expensive and limited resource. Families who rely on kerosene must limit the amount of time after dark that children can study or family members can make products to sell in order to conserve fuel.

Clean distributed generation is one of the best weapons to combat energy poverty. Distributed generation, such as solar panels and windmills, can provide access to electricity in communities that are disconnected from national power grids. These systems can range from a solar lantern that is able to charge a cell phone to multi-kilowatt systems on the rooftop of a house or community building. Larger microgrid systems—which can include a combination of solar panels, diesel generators, and backup batteries—can provide enough energy to power whole villages.

Although most electricity consumed globally is distributed through centralized electrical grids, this is often not an efficient option for rural communities. The vast majority of people—84 percent—without access to energy live in rural communities, disconnected from population centers and national electric grids. The 2011 World Energy Outlook found that in 70 percent of rural areas, distributed generation was a more efficient option to achieve universal energy access than the expansion of centralized electric grids.

The United Nations launched the Sustainable Energy for All initiative in 2011, an effort to combat energy poverty through the deployment of clean energy. Although this program has leveraged new international commitments, the International Energy Agency, or IEA, projects that without additional action, 1 billion people still will not have access to electricity by 2030. The IEA estimates that an annual cost of $30.6 billion will be required to eliminate energy poverty by 2030. In comparison, countries spent around $544 billion directly subsidizing fossil fuels in 2012 alone, much of which could have been redirected to more sustainable investments.

Of the required $30.6 billion annual investment, nearly $20 billion per year would be needed to fully finance microgrid and off-grid systems for rural electrification. This investment would come from a combination of public financing, international development loans and aid, and private-sector investment. Although this investment is substantial, the benefits it would yield are even more dramatic. For a total cost of $586 billion, the IEA estimates that universal rural electrification could be achieved with low-carbon, off-grid electricity by 2030, delivering 670 terawatt hours, or TWh, of new electricity generation.

As solar panels have fallen in price over the past decade, solar power has become an increasingly viable source of electricity. Although electricity from many of these systems is still more expensive than from central grids, it can be competitive when individuals lack access to that infrastructure. Solar energy is a competitive alternative to kerosene lamps and diesel generators, particularly where those resources are unsubsidized and when the health benefits are considered. This has allowed solar microgrids to become an increasingly competitive source of energy in places such as Uttar Pradesh, a rural, low-income province in India.

Since rural villages lack the capital to build new electric transmission to connect to central grids—and are too impoverished to attract government investment to fund that construction—the cost of distributed generation systems and microgrids is more appropriately compared with kerosene. In these communities, solar energy can provide a cheaper—not to mention cleaner and healthier—solution. Mera Gao Power, a microgrid firm that works in Uttar Pradesh, reports that its customers might pay 160 rupees per month to charge a cell phone at a central charging station and fuel kerosene lamps but only have to pay 100 rupees per month to access a solar microgrid for these tasks. These microgrids are also commercially competitive. They cost less than 60,000 rupees—about $1,000—to install, and Mera Gao Power estimates that the project costs are recovered within three years.

Distributed solar power, which does not rely on a centralized grid, has the potential to revolutionize efforts to combat energy poverty. The world has already seen how new technology not tied to traditional infrastructure can transform the developing world. In the past 15 years, cell phones, which do not require the costly infrastructure of landlines, have experienced dramatic penetration rates in developing countries, with 89.4 subscriptions per every 100 individuals, on average. In Africa, there are 63.5 mobile subscriptions per 100 people but only 1.4 landlines. This development has led to decreased isolation and improved access to medical care around the globe.

Solar power and other distributed generation can similarly improve the lives of rural communities throughout the world. By bringing clean energy to impoverished families while reducing the negative health effects of kerosene, increasing individuals’ productivity after dark, and opening up new opportunities for commerce, solar power represents a clear opportunity to combat energy poverty and enhance global development.

Ben Bovarnick is a Special Assistant for the Energy Policy team at the Center for American Progress. Eliza Dach is an intern with the Energy Policy team at the Center.

Thank you to Danielle Baussan, Managing Director of Energy Policy at the Center, and Rebecca Lefton, Senior Policy Analyst with the Center’s Energy Policy team, for their contributions to this column.

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Ben Bovarnick

Research Assistant