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All You Wanted to Know About Microgrids In India

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India is a huge county and a large portion of the Indian population still lives in darkness. The situation is even worse in villages, where people have to go to nearby towns for charging their mobile phone batteries. Thanks to solar lights and chargers, the condition has improved these days. The Indian rural market, therefore, offers a large potential for micro and minigrid projects which will help people meet at least their basic household needs.

What is a Microgrid

According to MNRE, a “Minigrid” is defined as a system having a renewable energy (RE) based electricity generator (with capacity of 10KW and above), and supplying electricity to a target set of consumers (residents for household usage, commercial, productive, industrial and institutional setups etc.) through a Public Distribution Network (PDN).

A “Microgrid” system is similar to a minigrid but having a renewable energy based generation capacity of below 10KW. Micro and minigrids generally operate in isolation to the electricity networks of the DISCOM grid, but can also interconnect with the grid to exchange power. If connected to grid, they are termed as “grid connected mini/ microgrid’.


Components of a Microgrid

The microgrid system consists of:

  • Solar panels/ other RE source
  • Inverter and batteries
  • Low-voltage power distribution network
  • LED lamps, compact fluorescent lamps, fan etc. for households

Other components include charge controller, cables, circuit breakers, junction boxes etc. These components should confirm to the technical requirements and quality standards specified by the concerned government regulator or Ministry.

Types of Microgrids

The microgrids can be classified into various types based on the function they perform:

  • Off-grid microgrids include microgrids on islands and other remote sites which are not connected to a local utility network.
  • Campus microgrids are fully connected to a local utility grid, but also maintain some services in isolation from the grid, for example during a power outage. For example universities, corporates, prisons, military and hospital campuses.
  • District Energy microgrids provide electricity as well as thermal energy for heating (and cooling) of multiple facilities.
  • Community microgrids are integrated into utility networks and serve different customers within a community. They serve as a reliable power supply for important community assets.
  • Nanogrids comprise of the small discrete network units which can operate independently.

New Policy on Microgrids by MNRE

The Ministry of New and Renewable Energy recently released a draft policy on micro and minigrids that will run on renewable energy sources like solar, wind energy, hydro and biomass plants. The policy aims to achieve a target of 500 MW of total capacity over the next five years. India is targeting to set up nearly 10,000 solar, wind and biomass-based power projects in five years in rural areas based around the concept of microgrids.

The underlying principles of the Policy are listed below:

  • Mainstream RE mini/ microgrids for enhancing access to affordable energy services, and improving local economy
  • Streamline project development procedures for ESCOs
  • Provide operational frameworks to operate along with the Distribution Company (DISCOM) grid
  • Optimize access to central financial assistance and other incentives
  • Foster innovation in mini grid models to cater to rural needs

Tariffs for Using a Microgrid

According to MNRE’s draft policy for microgrids, the tariff may be set as follows:

(i) Where no subsidy or grid connectivity is provided- As per market

(ii) Where subsidy is provided – With concurrence of defined State government authority

(iii) Where grid is connected – State Electricity Regulatory Commission (SERC)

Existing Microgrid Projects in India

Many small enterprises have been installing microgrid projects in the rural parts of India. Some of the popular ones are OMC Power (in UP), Mera Gao Power (UP), DESI Power (Bihar), Naturetech Infrastructure (UP and Bihar), Simpa Networks (Karnataka).

Other notable microgrid projects in India are deployed in Baikampady Mangalore, Neelakantarayanagaddi village, Mendare village, and Kalkeri Sangeet Vidyalaya in Karnataka (by SELCO). Greenpeace has set up solar microgrid project in Dharnai village of Bihar. The Chief Minister’s residence in Bihar is also run on a solar microgrid.

Challenges for Indian Microgrids

  • Funding
  • Subsidized kerosene
  • Uncertainty around tariff payment
  • Absence of large commercial loads in villages
  • Government plans about Grid extension
  • Different forms of power – AC/ DC.

Sneha Shah

I am Sneha, the Editor-in-chief for the Blog. We would be glad to receive suggestions, inputs & comments on GWI from you guys to keep it going! You can contact me for consultancy/trade inquires by writing an email to

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