The Power of Flexible Financing: How ONergy is Expanding Access to Energy Services

The Indian renewable energy sector is the world’s fourth largest renewable energy market and is looking to grow. By 2030, India plans on installing 450 Gigawatt (GW) of renewable energy – over 60% (about 290 GW) is expected to come from solar. In 2022, India’s renewable energy sector will boom with a likely investment of $15 billion, as the government focuses on electric vehicles, green hydrogen, and solar equipment manufacturing (India Brand Equity Foundation).

Despite progress in the renewable energy sector in India, the rural population cannot afford solar solutions for their houses or farms. Additionally, due to a lack of a stable energy supply, they face crippling power crises throughout the day.

However, there is the potential to improve access to energy services. For instance, microfinance in India plays a major role in the development of the country. As part of WE4F’s series on end-user financing, Antara Dey Bhowmik, Operations & Commercial Head of ONergy Solar, shares how they offer an extensive range of business development and financial services to improve the livelihoods of people living in rural areas in the eastern region of India.

By Antara Dey Bhowmik and the S/SEA Regional Innovation Hub

Improving Access to Energy and Water Services

ONergy sells and provides services for a wide range of solar energy products (e.g., solar rooftop power plant, solar irrigation pumping, solar lighting and microgrids) to both rural and urban customers in Eastern India. By incorporating innovation and creativity into the backbone of our organization, our solutions offer a way to mitigate local challenges like energy access, food and water supply, limited economic opportunities, and even the impacts of climate change.

One of the key pieces of our organization is having a business model that focuses on the three core areas of technology, energy infrastructure, and financing. Through our model, we are able to provide access to clean energy for low-income communities in rural India. For this blog, we want to focus on the financing component and why it is so important for us as an organization.

Why End-User Financing

Agriculture is a dominant sector of our economy and credit plays an important role in increasing agriculture production. Availability and access to adequate, timely and low-cost credit from institutional sources is of great importance, especially to small and marginal farmers.

However, access to financing is a challenge for the smallholder and marginal farmers who live in rural areas because there are a limited number of financing options. For organizations like ONergy this is a major problem, as most of our customers live in rural areas and have previously suffered from unreliable forms of energy. So, we developed a couple of different methods and partnerships that help improve access to our products.

Our Different End-User Models and the Benefits

ONergy’s diverse product portfolio allows us to create value for various customers and develop new markets as the electricity grid in India expands and improves. Through our various models, ONergy helps bridge the gap in electricity needs and bring affordable energy access to communities, institutions, homes and other innovative channels.

The Partnerships Model:

To make solutions affordable and reach end-users who can benefit from our products the most, we facilitate financing by partnering with both banks and microfinance institutions (MFIs). These institutions offer flexible financing options to end-users who need the financing to access clean energy products and services. With the support of international organizations, we also set up a revolving energy corpus to facilitate low-cost credit to MFIs and rural entrepreneurs.

Partnering with MFIs, non-governmental organizations, and the government extends outreach, keeps product costs low, and quickly builds trust in new communities. Customers appreciate this model because it makes products affordable and gives them a known point of contact.

The First Loss Default Guarantee Model:

With the support of our  sister concern, SwitchON Foundation, we created a First Loss Default Guarantee (FLDG) corpus to enable banks to lend to “unbankable” farmers that financial institutions consider too “risky”. This blended finance tool has helped leverage commercial capital, where farmers get up to 5-year loans on solar pumps.

The Rental Model:

Due to the low financing options for end-users in rural India, ONergy developed an innovative rental system to improve access to high-quality clean energy products in areas where people cannot afford the high upfront cost. We use a network of franchises that manage village-level charging stations that rent out energy systems to end-users. This rental income covers the equipment and operational costs, including training, maintenance, and replacement parts.

The Inclusive Business Models:

Onergy has been a pioneer for inclusive business models since 2010. Two of our key models have been the water as a service (WaaS) model and the water user group model. We promote both of these models as they can better serve smallholder farmers.

The WaaS model involves a water entrepreneur that operates the solar pump and sells water to other farmers on an hourly, daily, or seasonal basis. The farmer who is purchasing the water avoids spending the money typically required to access our products.

The water user group model involves forming a Joint Liability Group of smallholder farmers or women Self Help Group to facilitate financing and optimum water usage among the group.

Women and End-User Financing – The Next Key Step

Rural women are major stakeholders in the growth of India’s agricultural sector. Acknowledging and mainstreaming rural women through ensured access to resources, technology, education, health facilities, ownership rights, and skill development will improve agriculture productivity and help build an empowered nation.

As we can see in the large population of farmers, the landholding is mostly with the man of the family. Because the man is the landholder, this to whom the financial institutions will provide loans or financial assistance. We have seen that banks are reluctant to provide any financial assistance to the women farmers because they do not have the collateral.

As time has passed, women have been entrusted with more roles and responsibilities in the agricultural sector, but the status of their authority and decision-making ability still offers a lot of room for improvement.

We are exploring other opportunities to bring in the approach for gender-integrated financing through the Rural Entrepreneurship model. In this model, women must be an integral part of development, not only as beneficiaries but also as decision-makers and agents of change. An integral part of the project will be to form the joint liability group (JLG) model which will create a shift of women farmers from an entrepreneurial model to a group model. This will lead to better penetration of bank financing.


Would you like to learn more about end-user financing mechanisms and glimpse into case studies from WE4F’s own global pool of end-user-oriented innovations? Take a look at our End-User Financing Guidebook, fresh off the press, at:  

You can also read other innovators’ stories about their end-user financing:

Or watch our World Water Week session (which features ONergy!):  

ONergy is a market leader in energy access solutions operating since 2009 and impacted over 1 million lives. They provide full turnkey and customised solutions across design, engineering, installation and maintenance. In addition, ONergy Agritech provides innovative farm equipment solutions. ONergy is also renowned for its last mile access to energy reaching the remotest corners, strong after-sales service network, and high-quality products.

Yogeeta Sharma is a Communications and Knowledge Management Specialist for the WE4F South and Southeast Asia Regional Innovation Hub. Previously, she has worked with various USAID programs and gained essential experience in the development sector. She loves bringing innovators’ vision into a virtual reality here at WE4F.