In Rural India, Electricity Sparks New Businesses
Located in rural Uttar Pradesh, Shivpura is a village where clean drinking water has been scarce. When TARA Urja, an Energy Service Company (ESCO), started operating a 30-KW solar power plant in his village—offering reliable electricity to villagers in February 2015—Sandeep spotted an opportunity: using the reliable flow of electricity to power a purification system, Sandeep created a drinking water delivery business.
“Our water enterprise will deliver 2,500 liters of clean water a day to a local health facility, a student training center, shops, and a government office in Shivpura,” says Mr. Ram Kumar Jaiswal, a retired teacher who used his savings to buy a reverse osmosis water purification processor so that his son, Sandeep, can use it to start up a business. In just over a month, average daily demand from more than 40 regular customers has ramped up to 1,200 liters a day, serviced by a small truck purchased soon after the shop was opened.
Months before Sandeep bought his processor, he surveyed the market and found that a nearest drinking water business was available 17 kilometers away from his village—too far for the service to reach him and his neighbors. And since TARA, a social business incubator, also facilitates micro-enterprise development in the village, they offered Sandeep financial support of US$530—10 percent of the total cost to buy the processor—in exchange for a one-year utility contract with TARA Urja, the energy service company who operates the solar power plant. Sandeep is one of TARA Urja’s 120 customers who have capitalized on the availability of reliable power to initiate or enhance enterprises.
“Sandeep is one of TARA Urja’s 120 customers who have capitalized on the availability of reliable power to initiate or enhance enterprises.”
Fifty meters away from the water enterprise is a mobile shop. Ravi, the shop owner, previously bought electricity from a diesel generator, costing him as much as US$46 a month. After subscribing to TARA Urja’s power, he’s spending less than US$20—saving around US$30 each month. And coupled with business training provided by TARA Urja, Ravi has opened a second shop.
While cost savings and reliability are major incentives for entrepreneurs to switch to the solar electricity, other entrepreneurs, like Shyam Babu, have realized additional benefits. Shyam runs a welding shop, using electricity to run various hand tools, including a circular iron cutter. Circular iron cutters can be dangerous to use, especially if they’re connected to an unreliable power source. Since switching to the more stable solar power plant, Shyam’s tools function more stably and he’s observed fewer work-related accidents.
Designed to deliver electricity to major businesses—including telecom towers, banks, micro-and enterprises—these plants now serve more than 2,100 local businesses and nearly 20,000, including welders, mobile shops, banks, computer learning centers, healthcare facilities, petrol stations, schools, carpentry shops, drink and snack shops, tailors, car washes, telecom towers, and clean water enterprises.
The steady increase in customers has helped TARA Urja’s business grow in Shivpura. And with rising demand, TARA Urja is also planning to add solar panels to its plant to increase generation capacity.
Through The Rockefeller Foundation’s Smart Power for Rural Development (SPRD) initiative and Smart Power India, we are providing technical and financial support to six ESCOs, including TARA Urja, to build mini-grids and further develop small businesses. As Smart Power for Rural Development’s work continues, we’re encouraged by this continued investment by ESCOs and the entrepreneurial spirit of the villagers.
Stay tuned to our blog for more stories and updates from the field on Smart Power for Rural Development.