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Lowest Cost Micro-Grids in the World's Largest Unelectrified Market

Nikhil Jaisinghani Fri, 2011-01-07 05:00

Nikhil Jaisinghani · Fri, 01/07/2011 - 06:00

Business

Business Overview: 

Mera Gao Micro Grid Power (MGP) builds and operates micro grids to provide lighting to off-grid villages in Uttar Pradesh. MGP generates electricity through solar panels, stores the generated electricity in batteries, and distributes this electricity through village-level micro-grids to power lights within individual customer households. MGP's micro grids have the lowest per customer CAPEX and OPEX of any commercial micro grid in operation with a projected return on investment of under four years.

What are your future milestones, and how much capital will you need to achieve each of the milestones outlined?: 

MGP aims to reach 100 villages and 7,000 clients by the end of 2012. Capital costs to cover equipment should be secured by October, 2011, however additional resources are required to test methods of mobile facility controls, hire and train a small team, and bring in consultants from the micro finance sector to develop strong payment collection processes.

Services Desired: 
Accounting
Legal-Corporate
Management Consultant
Grant Writer
Capital Broker/Dealer
Who is the Customer?: 

Rural households in Uttar Pradesh, India without access to electricity.

What is the Customer Pain that you are solving?: 

Lack of quality nighttime lighting.

Names of any current or recent customers: 

The village of Pateriya.

What is the Target Market?: 

The World Resources Institute estimated that off-grid distributed energy (OGDE) in India is a $2 billion a year untapped market. MGP's target market is initially the 40% of households living without access to electricity in Uttar Pradesh, a state with 250 million people.

How big is the Target Market in terms of Annual Sales?: 
$1B-$2B
Sales/Marketing Strategy: 

MGP initiates its entry into a new village through a demonstration light which runs for one week. Once the value of its lighting service has been demonstrated, MGP's partner, the Sarathi Development Foundation, ensures that there is an adequate demand for lighting within the village. The construction of the rural lighting facility takes three days, the initial round of customers are connected within five days after that, and the facility begins generating revue at the beginning of the following month.

Competition: 

The off-grid distributed energy business has the potential to be a $2 billion a year sector; thus far, the sector has yet to even generate revenues of $1 million per annum. The national grid has left 80 million households without power and is expanding very slowly. Further, the Power Ministry's priorities are split between increased generation, improved transmission, and scaled up distribution implying a rapid increase in new customers with access to the grid is years, if not decades, to come.

One-line Pitch: 

We build and operate rural lighting facilities that reach unserved populations in an uncompetitive market. Our facilities generate a 25% return on investment implying we can generate significant profit off of debt financing once the model is sufficiently demonstrated. With 80 million potential clients and an untapped $2 billion per year market in India, MGP is uniquely positioned to take to scale quickly.

Business Model: 

Mera Gao Micro Grid Power (MGP) builds and operates micro grids to provide lighting to off-grid villages in Uttar Pradesh. MGP generates electricity through solar panels, stores the generated electricity in batteries, and distributes this electricity through village-level micro-grids to power lights within individual customer households. MGP's micro grids have the lowest per customer CAPEX and OPEX of any commercial micro grid in operation with a projected return on investment of under four years.

Product/Services Overview (what does it do): 

Provides nighttime lighting to households in unelectrified villages of Uttar Pradesh, India.

Technology

What makes the technology/business unique and have a defendable competitive advantage?: 

Our facility design has a very low CAPEX ($50 per household) and low OPEX (limited to battery replacement every three years and tariff collection). As a result, MGP is able to take the same level of resources and reach more customers while not needing to deal with the same level of operational complexity that its competitors do.

Describe in detail the technology used in the Project - Address the innovation in significant detail : 

Solar panels generating 35 wh of energy per customer per day, batteries storing 4 ah of energy per customer, distribution lines to carry power to households, and LED modules to provide nighttime lighting.

What are the principles of the technology? : 

Solar power generation, battery storage, and 24 volt direct current distribution.

What, if anything, has been proven (and how far is this from a commercial scale)? : 

It has been proven that rural households in India want lighting and are willing to pay a premium to be served.

What challenges/risk does the technology face for commercialization?: 

Proper community entry, management of an increasingly large network of facilities, and government regulation.

Team

NameTitle
Nikhil JaisinghaniDIRECTOR
Brian ShaadDIRECTOR
Inder Jit SinghOther

Financials

Amount Sought: 
$250,000
If raising funds, what shall the funds be used for?: 

The funds will be used to rent a small warehouse, purchase a vehicle for transport, and purchasing equipment to be deployed to serve an additional 4,000 households, expanding MGP's current network of rural lighting facilities and building its customer base.

Amount invested by Founders: 
$18,000
Funding Stage: 
Early/Seed
Internal Rate of Return (IRR): 
25%

Testimonials

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Mon, 10/20/2014 - 00:48