Dynamics of solar energy entrepreneurship in rural Bihar, India

Abstract

Access to energy provides numerous opportunities to enhance well-being and alleviate poverty. In rural and energy-poor areas, alternative technology solutions such as solar off-grid products, storage systems and energy-efficient devices can complement the unreliable electric grid to fulfil energy needs. Localized entrepreneurship in rural areas can play a significant role in increasing energy access. However, studies on the dynamics of rural entrepreneurship and low-cost energy access in poor households are scarce. This paper explores the local entrepreneurs' perception of social, economic, and technological factors that impact entrepreneurship dynamics in rural poor communities of India, and to identify strategies to help further improve the existing institutional support. A community-based system dynamics (CBSD) approach was used to engage community members to understand their perspective of entrepreneurial development. The study participants were twelve local rural retailers in the state of Bihar in India who were previously trained and employed in a decentralized solar project, and have since become solar entrepreneurs. Participants were engaged in group model-building sessions to develop a causal loop diagram (CLD). Based on the basic structure identified in CLD, a simulation model was developed and calibrated using data from solar project operations and surveys of solar users and entrepreneurs. Results indicate that training and subsequent experience in the project and business helped reinforce the entrepreneur's skills. Repair service and sales of energy products contributed in building trust and awareness in the community, thereby increasing demand for solar and energy-efficient products. The simulation-based scenario analysis shows the positive impact of better business practices, bulk procurement, and continued repair services on the income of the solar entrepreneurs. Findings from this study can inform subsequent energy entrepreneurial development in rural Bihar.