May 18, 2014

Government, IIT-Bombay Launch Solar Project to Reduce Kerosene Subsidy

According to reports, the government has joined hands with IIT Bombay to implement cost-effective solar powered lighting solutions for rural population that will help save 36 million litres of kerosene and slash the subsidy bill on the polluting fuel by aboutRs 30,000 crore a year.

The scheme will be implemented jointly by the ministries of petroleum and new and renewable energy (MNRE), and funded through state-run oil firms’ corporate social responsibility (CSR) fund, government officials said. The ambitious programme will light up the lives of about 47% of the country’s population that lives mostly in villages, they said.

“Fuel conservation is the focus of India’s energy policy and the oil ministry is committed to reduce consumption of kerosene, which is a major health hazard. We have significantly cut diesel subsidy and through solar scheme we intend to reduce kerosene subsidy, which is more than Rs 29,000 crore,” a senior oil ministry official said.

IIT Bombay started a programme last year to distribute solar lamps to students living in non-electrified areas of the country. As the central government gives 30% subsidy on cost of solar lamps, the institute contacted the MNRE to support its community development programme.

Looking at the attractive opportunity to reduce kerosene usage, the oil ministry decided to be part of the programme and asked oil companies to divert their CSR fund to this initiative. The combined annual CSR fund of the state-run oil firms is about Rs 1,000 crore.

“MNRE, through its subsidy, is paying 30% of the cost of the lamp while 50% will come from institutional donors, mostly from the oil companies through their CSR fund. The remaining 20% of the amount will be paid by the beneficiary,” said a senior MNRE official.

The lamps are not given free of cost as the government wishes to propagate the importance of solar energy and distributing it for free will negate the intention of replacing kerosene with solar energy, the official said.
“Demand for solar-based lighting products is going up every year because of its viability and sustainability. Tracking the replacement of kerosene is difficult but widespread acceptance of solar as the primary fuel will help bring energy security where it is needed the most,” said Tarun Kapoor, joint secretary, MNRE.

The programme also aims to increase employability by developing skills to assemble lamps locally and then distribute them. The total cost of the project is Rs 48 crore, of which about Rs 14.81 crore will be disbursed by the MNRE, sourced from the National Clean Energy Fund. Over the past three months, about Rs 10 crore has already been given to IIT-B, through which 27,000 lamps were assembled and distributed in Madhya Pradesh.

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