Uttar Pradesh (UP) is one of the poorer states in India. For centuries, people have been subsistence farmers, growing rice, wheat, lentils and mustard seed. Some cash crops like sugar cane, potato and mentha are now also cultivated on large scale. Buffalos are reared for milk and meat. Over the years, the farms have become smaller as the land is divided between children.

Many rural areas of UP have no grid electricity and even where the grid is available there are frequent power cuts. Some shops provide a battery-charging service, so that people can run d.c. lights and small appliances from car batteries. Photovoltaic (PV) solar-home-systems (SHS) can be very effective at providing power for lighting and small appliances. However in many parts of India, and other developing countries, the main obstacle for rural families who want to have an SHS is finance.

Throughout India there is a well established network of Regional Rural (Gramin) Banks, which were set up from October 1975 to make banking facilities available in remote rural areas, and to make small loans easily accessible to farmers and other rural people. Mr NK Joshi, Chairman of the Aryavart Gramin Bank, thought that a rural bank should aim at providing light in the lives of its proven customers by enabling them to purchase SHS. The Aryavart Gramin Bank had good experience of PV. It had solved its own problem of running computer systems in branches with unreliable mains power, by using PV-powered backup systems. In 2006 Mr Joshi had also run a pilot consumer loan scheme for SHS in the former Avadh Gramin Bank. The Aryavart Gramin Bank therefore decided to launch a major programme to promote SHS, by bulk-ordering the PV systems through the main dealer of Tata BP Solar and providing loans to customers.

The bank programme provides two standard sizes of SHS, through the dealers of Tata BP Solar. The most popular is the smaller system based on a 35 Wp PV module which can run two lights and a small appliance. The bank will provide solar loans only to its own customers, who have already established a track record of reliable credit repayment. Bank customers are invited to ‘credit camps’ where SHS are demonstrated and explained, and usually 1,000 or more customers sign up for SHS loans at each camp. The bank offers a finance package through which purchasers of the 35 Wp system make a down-payment of IRs 2,520 (£32) and the bankprovides a loan of IRs 11,000 at 12% p.a. interest, which is repaid with monthly instalments of IRs 245 (£3.10) over five years. These repayments are cheaper than the previous IRs 280 (£3.50) monthly cost for eight litres of kerosene, which is the average household use in the villages .

The Aryavart Gramin Bank has developed an innovative way of providing maintenance for the SHS, which also brings employment to rural areas. Part-time ‘business facilitators’, trained by TATA BP Solar and its dealers, are each paid a monthly fee to keep check on 100 SHS, with the incentive of a larger bonus at the end of the year if all their systems are working well.

To date 10,103 customers have signed up for SHS loans, and 8,007 systems are already installed, bringing their owners the benefits of safer, brighter lighting, phone-charging, radio, TV and fans. There is real potential for making solar PV mainstream in the rural areas of India, through the wider network of Gramin Banks.

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