New Delhi: By Ankur Seth“With rapidly evolving technologies and business models, there is need to adopt new and fundamentally different pathways to provide clean, cost-effective, and efficient mobility services” said Arvind Panagariya the former Vice Chairman of NITI Aayog in a 2017 report titled India Leaps Ahead: Transformative mobility solutions for all.Panagriya’s statement above touches on two intriguing themes, evolving business models and adopting new pathways to provide clean mobility. The statement assumes greater importance in the wake of India’s clean energy movement, supported by the government’s target of achieving 175 GW of renewable energy (100 GW of this from solar sources) by 2022 and ending dependence on fossil-fuel driven passenger transport by 2030. The multipronged effort indicates a promising future for the urban centres, however, the convergence of solar energy and electric vehicles may have the potential to have an even deeper impact on the development of rural geographies.Source: Cleantechnica, 2018The latest data on capacity addition for power generation highlights India's fast pace march towards embracing solar power as a major source of energy, however, rural electrification rate in India continues to remain low. According to the REC Annual Report, while approximately 18 thousand villages did get electrified from 2013 to 2017, it has not necessarily translated into 24X7 energy access for all households. Decentralized solar power generation solutions, particularly mini and micro grids have been endorsed as a critical linkage in reliably meeting the energy needs of the rural and remote geographies.These solutions not only have the advantage of being deployed faster but they also incur lower transmission and distribution losses. However, the average rural household energy load, which consists of lighting, charging and fans is not enough to drive the utilization of the mini-grids. As a result, the solar mini/micro-grid sector in India, largely funded by grants, is facing a challenge of remaining viable with average project IRR’s of 8-10%. This has led mini-grid developers to pursue more productive loads, alongside domestic consumption, which require more energy and can be charged a higher tariff for commercial usage. In fact, mini-grid developers are now increasingly supporting the installation of productive load interventions that can also contribute to livelihood and ecosystem development of largely agrarian rural communities. These include machines such as wheat grinders (“atta chakki”), rice hullers and oil expellers. However, a key aspect of the ecosystem which has remained absent from the list of potential productive loads and has an equal if not larger impact on rural development is mobility.A GIZ sustainability report says access to transport infrastructure and services is crucial to the economic and social development in rural areas. According to UITP India, it is estimated that 48% of rural community members walk an average of 2-10 kms to reach work and many are unable to pursue alternate employment options due to lack of an efficient transport infrastructure connecting rural areas to nearest cities and towns. The problem has even more far reaching consequences for the young population who are unable to travel to schools and colleges, preventing them from pursuing higher studies and learning new skills. According to a report by Catalyst, it also adversely impacts the contribution from women workforce which is estimated to be one-fourth of the total workforce in rural economy.If we take a step back to reflect, the challenges associated with improving the condition of rural mobility and viability of solar mini-grids may find a common solution through the advent of electric vehicles (EVs) in the rural areas. Although, the National Electric Mobility Mission Plan ( NEMMP ) was launched in 2013 to promote hybrid and EV’s in India, Indian cities got introduced to EV’s with the launch of 2-seater mini passenger vehicle, REVA in 2001 and electric “rickshaws” in 2008.While most of the EV development efforts till now have been geared towards the four-wheeler passenger segment, a new category of EV’s is emerging, including two and three wheelers, mini-vans that can cater to the demand of the rural markets. The charging infrastructure for these EV’s present a high potential option as a productive load for the mini-grids. Furthermore, mini-grid developers can themselves support the deployment of such vehicles through rental models and create alternate livelihood opportunities for rural entrepreneurs. It will however be important to assess the cost-benefit for a rural entrepreneur to operate an electric vehicle, but with the pace of improvement in technology and declining costs, it is poised to rapidly become more profitable.Such models can also help in attracting investments in the mini-grid sector from EV manufacturers looking to expand into the rural markets. In fact, enabling last mile mobility has the potential to open a completely new partnership ecosystem for mini grid developers. This can include rural supply chain owners such as the FMCG players and healthcare solution providers who may use the EV’s powered by local mini-grids to reach the most remote rural regions. Moreover, these interventions can seamlessly dovetail with the incentive schemes for rural livelihoods and EV’s.Overall, there is enough merit for mini-grid developers to implement a pilot with EV’s and possibly prove a tenable case for rural hubs actually being the first to be transformed through the solar and electric vehicle movement.Ankur Seth is Senior Consultant, Intellecap Mumbai.