Essay on Using Solar Energy to Substitute Kerosene as a Fuel in India

928 Words Sep 14th, 2014 4 Pages
Rural Solar Electrification as a substitute for Kerosene Subsidies in India

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Sushant Vinchurkar

Rural Solar electrification as a substitute for Kerosene subsidies in India

In a recent article in the Times of India, renowned economist Swaminathan S. Anklesaria Aiyar has posed a million dollar question: “For decades, kerosene has been sold at highly subsidized prices on the grounds that it provides essential rural lighting to villages without electricity. However, if electricity is now available in all villages in some states, and will soon cover the vast majority of the rural population, why should the kerosene subsidy continue, especially when it’s well known that a corrupt, leaky distribution system means that little
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However the capital costs associated with solar PV technology is on the higher side ~ Rs.6.5 crores per MW, making them suitable only for small dispersed loads or for remotely accessible locations. Solar Home Systems (SHS) and small solar panel systems have been used in niche applications especially in projects that requiring small loads of 20-100W. SHS and solar lanterns have been successful in southern India and are becoming more widely available in northern parts. The Ministry of New and Renewable Energy (MNRE) under its PV programme has distributed around 610,000 systems, totalling around 20MW of capacity. This includes solar lanterns, home lighting systems, street lighting systems, water pumping systems,etc.

Traditional solutions to avoid Exploitation of Kerosene subsidies areShort term: Small price increase for PDS kerosene in 2012 and the Expert Group chaired by Kirit Parikh recommended periodic price increases for PDS kerosene (Government of India, 2010). Medium to long term: Develop a roadmap gradually replacing PDS kerosene with direct payments (cash transfers, etc.), to be rolled-out on a state-by- state basis.

Alternative Solutions (Self analysed proposals based on the gathered statistics)
Total Kerosene subsidy by government (Fiscal + under recovery) ~ Rs.20415 Cr. per year. We make a conservative estimate that 50% of the total kerosene subsidy is spent on energy needs other than cooking

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