A new study by the International Institute for Sustainable Development (IISD) has identified the lack of a utility-focused planning framework as the missing “system layer” preventing the large-scale expansion of Distributed Renewable Energy (DRE) in rural India.
The report, titled “Scaling Rural Distributed Renewable Energy in India,” highlights the need for an evidence-based approach that can help states convert India’s clean energy targets into practical and scalable DRE deployment strategies across diverse rural regions.
The study proposes a Model DRE Village framework designed as a practical guide for governments, utilities, and stakeholders to implement village-level renewable energy solutions while aligning with existing government programmes and schemes.
A key recommendation of the report is the creation of a unified Village Energy Plan, which would act as the central implementation document for planning, executing, and monitoring DRE projects at the village level. According to IISD, such a framework can improve coordination, support better decision-making, and enable states to replicate successful models.
Study Based on Village Case Studies and Technical Assessment
The IISD study reviewed India’s DRE policy landscape and analysed real-world experiences from renewable energy-enabled villages, including Manyachiwadi in Maharashtra and Odanthurai in Tamil Nadu.
It also conducted a techno-economic assessment using modelling tools in villages such as Hiware Bazar in Maharashtra and Bamun Sualkuchi in Assam to understand implementation pathways, energy demand patterns, and system performance.
The report assessed multiple factors, including population, geography, technology choices, project costs, institutional structures, and operational challenges.
The analysis found that while local leadership, community participation, and stakeholder coordination are important for successful DRE projects, long-term performance often becomes uncertain when projects depend on individual champions, informal management systems, weak payment collection mechanisms, or inadequate operation and maintenance structures.
To address these challenges, IISD recommended clearly defining institutional responsibilities, strengthening accountability systems, and establishing structured maintenance and performance monitoring mechanisms.
Need to Align DRE With Distribution Planning
The report highlighted that rural electricity demand varies significantly from urban consumption patterns. Each village has a different energy profile, which must be considered while designing DRE systems.
For agriculture-focused villages, IISD recommended prioritising solarisation of agricultural electricity demand and increasing daytime consumption. Villages with higher evening electricity demand should integrate battery storage and grid interaction strategies from the beginning.
The study also emphasised the importance of managing surplus solar generation, network readiness, and storage planning as DRE deployment expands.
According to IISD, distributed renewable energy should be treated as part of electricity distribution planning rather than only as a renewable energy target. This approach would help utilities better manage grid integration, system sizing, and operational responsibilities.
Storage Key for Future DRE Growth
The report noted that seasonal demand patterns, especially in agriculture-based areas, can create surplus solar generation and reverse power flow challenges in local distribution networks.
Battery storage can help reduce peak power requirements and manage excess generation, although larger network-level storage solutions may be needed for wider grid balancing.
IISD said solarising village electricity demand can deliver power at costs below the benchmark Average Power Purchase Cost (APPC). However, scaling the approach nationally will require stronger data on rural electricity consumption, distribution infrastructure, and system performance.
The institute recommended launching pilot projects based on different village energy profiles to collect data on reliability, storage performance, consumer experience, and operational challenges.
The report concluded that stronger planning frameworks, better data availability, and coordinated utility participation will be essential for accelerating India’s rural distributed renewable energy transition.
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