Last week, India helped the world get one step closer to an international climate pact when it ratified the Paris Climate Accord. Much of India’s strategy to reduce fossil fuels relies on a transition to renewable energy, namely solar. In fact, with solar prices worldwide plummeting, many countries are placing bets on solar.

Most analysis conducted to date suggests that among various competing solar technologies the economics are best for utility-scale photovoltaic (PV) projects. But grid scale PV can only serve households actually connected to the grid. Millions of people in developing and emerging economies live without electricity, either because the grid has not reached them or because they remain too poor to pay.

Rooftop solar and solar micro-grids seem appealing as a clean solution to a crippling energy access problem that condemns these countries to low growth. Micro-grids—where a handful of homes are centrally wired to a field of solar panels—are becoming especially popular because, unlike rooftop solar, the high upfront installation costs can be spread throughout a village, making them cheaper. Often fully or partially funded by non-profits and social venture capital, solar micro-grids are popping up in villages from Africa to Bangladesh, where households are able to flick on a switch for light for the first time.

So are solar micro-grids a sustainable solution to lighting up the developing and emerging world? Unfortunately, a recent study I conducted with my colleagues in the state of Bihar, one of the poorest regions in India, suggests they may have a tough time. A mix of inefficient policy, conflicting incentives and unreliable operations can ultimately lead to a product that consumers do not want.

Continue reading on Forbes…

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