Recent technological and regulatory developments around electricity generation, and in particular, the solar sector, are creating sustainable platforms for electricity consumption and generation by consumers. In fact, in certain instances, electricity generation and consumption do not require grid connectivity and are completely “off grid”.
Consumers are incentivised to set up their own electricity generation units owing to lower energy bills and the creation of environment-friendly ecosystems for electricity generation and consumption. So, an increasing number of consumers disconnect themselves from grids and turn to non-conventional sources (like solar).
This forces power distribution companies (Discoms) to recover losses from a smaller pool of consumers, leading to even more consumers opting out of electricity grids. This vicious cycle, which could result in Discoms going bankrupt, is what the term “utility death spiral” refers to. The Indian energy markets are regulated and if ‘utility death spiral’ becomes a