Compensating for nonexistent, poor or costly grid power may not be the most scalable solution for India’s microgrids according to a new report from US-based research institute the Brookings Institution.

This is because, as India’s grid improves, the model of microgrids filling in for low-quality or unavailable grid power may become obsolete according to Rahul Tongia, Energy and Sustainability Fellow at Brookings India and author of the report titled Microgrids in India: Myths, Misunderstandings, and the Need for Proper Accounting.

While reliability and quality of power supply have been the traditional drivers for microgrid installation, once grid power is available it will invariably be cheaper, the report notes, adding that while renewable power is cheap, adding battery energy storage or other reliability technology makes it more expensive than grid power.

Then there are ‘last-mile’ costs for wiring to the home, which apply to both grid and microgrid power. These can be at least INR5000 ($77) per home, the report says, and even higher for sparser or more remote locations and hilly regions. And the cost of metering – around INR650 even for non-smart meters – must also be factored in.

In addition, getting the size of a microgrid right is a challenging proposition where oversizing means costs are not covered and undersizing means occasional higher demand is not provided for. As well as being cheaper, grid power offers much more flexibility, the report says.  

As India steps up its household electrification scheme and pressure on microgrids grows, it is “only a matter of time” before most Indian homes have power, the report says. Tongia’s suggestion is that microgrids could avoid redundancy by being interactive, or interactive-capable, with the grid. This could allow for the evolution of load and supply options and could offer primary power, backup or secondary power, islanding when needed and, when available, cheaper supply.

“Grid-interactive microgrids can play into evolving business models and competition based on smarter systems that dynamically engage with the grid (and change the direction of power flow) based on a combination of local load, local supply, and external grid conditions. These cannot work with simple DC microgrids,” the report states.

The full report is available here