The Internet of Things (IoT), a leap from the prevalent technology allowing devices to communicate with each other, can deliver a wealth of benefits that can potentially change the way electricity is used by communities. IoT is already touted as the fourth industrial revolution. Its potential is phenomenal even in rural areas where the need for connectivity (not just to the digital world, but to the mainstream in general) is greater. This holds true even for India. Rural India has specific characteristics that create challenges around quality of life, sustainability and wealth creation. The issues stem from the fact that populations tend to be small, often dispersed; where information flows through narrow and uneven channels; fragile economic activity base, and severely restricted access to digital infrastructure.
While the current discourse on applicability of IoT is more concentrated towards urban regions (predominantly in the more industrialized countries), the rural pockets are witnessing a quieter micro-IoT revolution of their own. It’s called the M2M (Machine to Machine). While the IoT is the all-encompassing term for an end-to-end ecosystem of connectivity in technologies, M2M represents closed communication between devices. The IoT connectivity offers a range of development opportunities to hitherto untapped regions, including manufacturing, e-commerce, automotation, healthcare and electrification. In this note, we elaborate on rural electrification – an area that will propel rural India’s transformation and development. Without electrifying our villages through smart solutions, we cannot achive success in Make in India, Smart Cities or Digital India.
Energy access as the pivotal enabler
The ‘energy access for all’ target under the UN sustainable development goals (SDGs) is a key enabler of all other goals. It is hard to think of effective delivery of any essential service catering to basic needs of people without adequate and sustainable access to electricity. IoT platforms, with mobile phones as its backbone, are simply redundant if the devices cannot be charged! Leveraging the growing penetration of telephony and access to GSM networks in rural areas, vendors for decentralized clean energy services have started to integrate GSM connectivity and M2M in their energy products to overcome barriers to business sustainability, affordability of services to marginalized end-users, and enabling a reliable and cost-effective maintenance.
So what’s the solution?
We certainly be complacent and wait for low-price smartphones that retain substantial charge for days to be introduced, or wait for some revolutionary low-cost battery technology that actually works. Solar off-grid technologies are emerging as a competitive energy access solution. Their surge in competitiveness is driven by steady decline in cost of solar photovoltaic panels, batteries, and LED bulbs. All of us understand that solar energy is an extremely scalable solution that has given rise to highly differentiated product offerings. The private sector has realized the opportunity in tapping solar-based energy access solutions to fill the modern energy services gap in rural areas of developing countries. However, advancement of solar technology alone is not enough to make social businesses commercially sustainable. With the infrastructural and logistical constraints rural India is burdened with, the technical risk associated with first-time users of solar-powered solutions must be addressed. Other than, making micro-finance options available, it can be done through remote operation and monitoring of solar units. M2M and expanding GSM coverage will help achieve this.
But, how do we leverage M2M and GSM-based solutions?
The decline in voice and SMS cost, coupled with fall in cost of M2M solutions, certainly helped the technology to diffuse. According to estimates from 2012 GSMA report, M2M connections are predicted to reach 50 billion by 2020, creating an opportunity worth USD 1.3 trillion for mobile operators to offer mobile banking services to facilitate micro payments. There are two important ways in which M2M and GSM-based solutions can be leveraged to make sustainable solar off-grid business models successful. First, remote operations and monitoring: Companies have started to embed microcontrollers that send periodic data about energy production, user consumption and any operation problems to a central server.
The central server can communicate with mobile phones of end-users and local energy meters using Hypertext Transfer Protocol (HTTP) and SMS messaging over the GSM network. This helps remotely identify technical issues and deploy repair technicians in a targeted manner, as opposed to having technical personnel on standby round the clock. It also helps remotely alert users about billing related topics. Second, Pay As You Go (PAYG) – In this model, customers pay a fraction of the price as an initial down payment and pay unit price in small installments. These models often combine M2M technology with mobile money to give such a payment method a microfinance element. In other words, user makes installments using mobile money, credit on a user’s energy account can be checked remotely, the vendor allows the system to run so long as installments are made regularly, and the vendor is also able to remotely shut the solar-powered system down if a user fails to pay an installment.
After several years of discussion and anticipation, IoT is now firmly on its way.
This development has defining implications for the success of Modi government’s technology-led initiatives. The promise is much more than extending our online world in a myriad ways. For IoT to have the desired impact, there is something we need to do to initiate deployment and faciliate uptake in rural areas, particuarly in developing countries. Sustainable solar-powered M2M and GSM applications are ideas whose time has come. It will not only ensure that IoT-enabled technologies reach millions of people living in rural India, but also accelerate holistic social development.
Richa Goyal is an expert on rural electrification associated with Schatz Energy Research Center (SERC) in California. She works on energy access projects in East Africa and India. Ashish Bharadwaj is in Jindal Global Law School.