To realise India’s net-zero aspirations , tackling urban energy poverty is paramount. By ensuring fair access to clean energy, bridging social gaps, and nurturing community resilience, cities can seamlessly transition to a sustainable future. As India pursues ambitious net-zero goals and tries to reduce energy consumption, around 65% of the country’s population still struggles with some form of energy poverty.
Energy poverty, defined by the World Bank as a condition where households lack access to sufficient energy for basic needs, presents a significant challenge in India’s rapidly urbanising landscape. As the urban population burgeons, projected to reach approximately 814 million by 2030, the need for adequate and affordable energy infrastructure is intensifying. Rising energy costs exacerbate the plight of vulnerable populations, especially low-income households, marginalised communities, and those living in informal urban settlements. These groups often face structural barriers such as limited access to infrastructure, financial constraints, and social exclusion, exacerbating their susceptibility to energy poverty (SE4All, 2021).
In response to this pressing issue, India is navigating a complex energy transition, seeking to balance the imperatives of energy security, sustainability, and affordability. The average electricity tariff has increased from Rs.5.21/kWh in FY2015 to Rs.6.29/kWh in FY2022, forcing low-income households to allocate an even larger share of their budget to energy (Statista, 2024). The resulting inability to afford basic energy services leads to energy insecurity or forced trade-offs with other necessities like food and healthcare.
This rise in energy tariffs is not accidental; it is part of a deliberate policy move aiming to reduce energy use and nudge citizens towards low-carbon energy sources. Power Minister R. K. Singh said in 2024, “The anticipated impact of the new tariff system is to alleviate pressure on the grid and aid India in its objective of reaching 65 percent of its energy capacity from non-fossil fuel sources by 2030” (Ministry of Power, 2023). Yet, the burden of escalating energy expenses falls disproportionately on low-income households, leaving them ill-equipped to transition to low-carbon energy alternatives.
However, a rational low-carbon energy policy can address not only environmental concerns but also socioeconomic equity. Globally, the renewable energy (RE) sector sustains millions of jobs, exemplified by India’s employment of approximately 217,000 individuals within the solar photovoltaic value chain as of 2021. Moreover, green industries offer entrepreneurial opportunities, notably in marginalised areas, with investments in RE projects expected to create up to a further 74,000 direct jobs and 145,000 indirect jobs for underserved communities by 2030, according to projections by the Development Bank of Southern Africa. By promoting sustainable development and addressing energy poverty, RE technologies contribute to inclusive urban growth and improved quality of life.
However, challenges such as affordability, infrastructure constraints, and policy barriers need to be addressed to fully harness the potential of RE for urban poverty alleviation. Literature suggests a strong connection between gender equity and RE technologies, such that women in particular benefit from RE. In India, women’s presence in the RE workforce is rising, with around 30% representation currently. Further, Indian women collectively spend approximately 200 million hours daily collecting water, a burden already being eased by clean energy access. India’s Barefoot College demonstrates how training women as solar engineers not only enhances their livelihoods but also empowers entire communities with clean energy. Appropriate policies can enable women’s participation in decision-making processes related to energy infrastructure, thereby fostering economic independence, gender equality, and improving energy access and livelihood stability for underprivileged families. As of 2021, approximately 30 million households in India have benefited from RE solutions, such as solar home systems and clean cooking technologies.
Addressing energy poverty through policy interventions:
Decentralised solutions such as microgrids and community-based RE systems offer promising avenues for enhancing energy access and resilience in marginalised urban communities. One exemplary case is the Solar Rooftop Project in the Dharavi slum of Mumbai, implemented by the SELCO Foundation. By installing solar panels on rooftops, this off-grid RE system provides electricity to households, businesses, and community spaces, empowering underserved urban communities and fostering economic development while reducing reliance on fossil fuels.
Public-private partnerships, exemplified by projects like the Mumbai Solar Rooftop Project, are instrumental in addressing urban energy poverty. By collaborating with municipal authorities, solar companies, and financial institutions, this initiative installed solar panels in government buildings and low-income households, reducing electricity bills and generating employment. Such partnerships can drive effective policy frameworks and help scale up RE technology, as seen in initiatives like the Clean Energy Access Network (CLEAN) which uplifts underserved communities through advocacy, community engagement, and private sector collaboration.
Governments can play a pivotal role in promoting RE adoption through subsidies and incentives. For instance, India’s Saubhagya initiative subsidises solar installations in remote urban areas. By making solar power accessible, Saubhagya has significantly improved energy access for low-income households, as seen in Delhi’s Okhla slum.
Access to financing is critical for urban communities to invest in RE systems. Bangladesh’s Grameen Shakti programme provides microfinance loans for solar home systems, empowering urban households to access clean energy. The programme’s impact is evident in Dhaka’s Mirpur neighbourhood, where solar installations have improved energy access and economic opportunities. Innovative financing models like pay-as-you-go systems and community-owned renewable energy (RE) projects are revolutionising energy access for low-income communities worldwide. M-KOPA Solar in Kenya exemplifies success, providing affordable solar home systems via a PAYG model, facilitating clean energy access for over a million urban households. This approach promotes financial inclusion and sustainable energy adoption. Emulating such schemes, community-owned solar microgrids, as seen in the Dharnai village project, can similarly empower Indian urban communities, fostering entrepreneurship and income stability while advancing energy equity.
However, addressing energy poverty requires a multifaceted approach that extends beyond infrastructure and financing. Investing in capacity building empowers urban residents to effectively adopt and maintain RE technologies. With the objective of enhancing the capacity of urban residents and professionals, Indonesia’s Urban Renewable Energy Capacity Building Programme enhances knowledge about decentralised RE solutions through comprehensive training modules covering solar, biogas, and mini-hydroelectric technologies. The programme also supports aspiring entrepreneurs with guidance on business planning and financing. India would benefit from similar investments in training and other capacity building endeavours. For best results, strategic partnerships between government, academia, and private sector entities should tailor capacity-building modules to local needs and opportunities.
Tackling energy poverty in India’s urban areas requires concerted efforts at the intersection of policy, technology, and community engagement. By harnessing the potential of RE, fostering public-private collaborations, and empowering communities, India can pave the way towards a more inclusive and sustainable energy future for all.
