Solar Energy Products Marketing In Rural India Rajshekhar Patne The recently released Global Status Report on renewable says that grid-connected solar Photovoltaics (PV) has been the fastest growing energy technology in the world with 50 per cent annual growth in cumulative installed capacity in last two years. The majority of the above capacity comes from Germany, Japan, Spain, and the US which have installed small PV systems (a few kilowatts to tens of kilowatts) on their rooftops, feeding the electricity into the grid through two way meters and enjoying the benefits of net metered electricity bills at the end of the month.
Of the total reported 25 lakh homes worldwide that use solar home systems today, about 3. 6 lakhs are in India, second only to China which has 4 lakh solar home system users. Though this figure looks good the actual situation is very scary. According to the Ministry of Power, Government of India, about 7. 6 crore rural homes still use kerosene for lighting. Lighting the basic amenity is not provided to 56. 5 per cent of the 13~8crore rural homes and 12. 4 per cent of roughly 5. 37 crore urban homes in India which continue to burn biomass, wax candles and kerosene lamps, spending Rs. to 5 per day. Apart from the low levels of illumination provided by these devices, smoke and fire hazards due to accidental pilfering of kerosene and tipping of candles are common. The task of providing electricity to the rural households is a large one. The task is made more challenging by constraints such as the lack of an extensive transmission network throughout the country, the limited generating capacity to serve additional rural markets, and the scarcity of capital for investments in generation, transmission, and distribution.
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Economic extension of rural electrification is further constrained by the generally small loads and greater dispersion of rural customers, making it difficult to justify the costs of distribution networks. Alternative options to the conventional grid based electrification, such as low cost isolated grid systems, solar, wind and micro hydro are under consideration for serving remote villages and other clusters of customers.
Another strong contender, particularly for disbursed consumers and clusters with combined loads too small to justify grid systems is the use of solar photovoltaic (PV) panels for electrification of individual homes or buildings. These are commonly called solar home systems (SHS). The solar lantern, a portable lighting device that uses CFL, has its own rechargeable battery inside that can be charged every day using an 8 to 10 watt solar panel. This is an ideal device to light up homes that currently use biomass or kerosene for lighting.
The solar lantern with its solar panel currently costs about Rs. 3,200-3,600 of which the user generally pays only 50 per cent as the remaining amount is supported through a central subsidy. However, an upfront payment of Rs. 1,800 often becomes a deterrent for the prospective user who can afford and probably is willing to pay smaller amounts on a daily or weekly basis. Such scenario can be resolved by Micro finance and effective business model.
Dynamics of rural markets differ from other market types, and similarly, rural marketing strategies are also significantly different from the marketing strategies aimed at an urban or industrial consumer. Strategies to be followed in Indian Rural Market- a) Marketing Strategy: Marketers need to understand the psychology of the rural consumers and then act consequently. Rural marketing involves more exhaustive personal selling efforts compared to urban marketing. Different schemes can be proposed for the solar lightning in Rural area: 1. Cash purchase through a single payment (with subsidy) . Cash purchase through payment in monthly installments. 3. Cash purchase of main equipment and charging service fee on daily or weekly basis. 4. Loan to Self Help Group people to buy solar products. b) Distribution Strategy Apart from making financing schemes we need to think about distribution and promotional model for the same. As the value chain for solar lightning is Manufacturer ( Regional Distributor ( Local distributor (Local retailer (at village level) this makes product costlier. This longer chain can be cut down by making hub & spoke model by manufacturer.
This model not only for supply of equipments but also should be there for service/repair. According to the Indian Market Research Bureau, around 8000 such melas are held in rural India every year. Rural markets have the practice of fixing specific days in a week as Market Days called “Haats’ when exchange of goods and services are carried out. This is another potential low cost distribution channel available to the marketers. At local level a service person can be appointed who can work on partly basis and repair the solar lanterns.
Also if partial equipment is purchased by people then company can establish solar charging station at center and this local person can collect and charge lanterns on daily basis. As most of the time the lanterns are used during 6 pm to 10 pm, a local person can collect these lanterns during morning time, charge it entire day and return it in the evening time. Apart from this he can also collect mobile/telephone batteries, smaller pump batteries and charge it with some minimal amount. This will take care expenses of local service provider.
These solar charging stations would be operated and maintained by local youth, NGOs and local enterprises that can be selected through a process offering maximum equity (or any other criteria) and can be trained and incubated for a pre-specified time. These charging stations can be set up using resources from the government (they can be treated as basic infrastructure) or from corporations setting up rural outlets for their own products and services. c) Promotional Strategies: Bottle Water: In most of villages in India drinking water is major problem.
To promote solar products in such villages, company can distribute reusable water bottle to villagers which can be filled every day with some minimal amount. A local person can be appointed who can daily distribute water to these homes and also collect solar lanterns for charging at central station. With help of very marginal amount such business model can work in self sustainable basis. Initial setup support can be get from Government in the form of Subsidy, NGO or Charity. Fertilizer Company tie-up: Company can make promotional offers having tie-up with fertilizer companies.
This way they can channelize their business with short supply chain. Also this will help to provide free system on bulk purchase of fertilizers & pesticides. Conclusion: Solar lightning penetration to 3. 5 lacs house hold compared to more than 7 crore household who are awaiting to see the light in their life is very scary and very opportunistic. The right way of distribution, service and promotional model in rural area will be a great opportunity for many Solar Product manufacturing companies. Micro finance and NGOs are very supportive to initialize proper self sustainable business model.