Return to site

Improving operational efficiency of rural enterprises

Digitalising operations using the Internet of Things (IoT)

· Internet of Things,Data Analysis

by Tanuj Karia, Innovation Intern at Oorja

Decentralisation and decarbonisation are at the centre of Oorja's mission, which is to power productive uses of energy - such as irrigation pumps. Among Oorja's service offerings is Oonnati, a pay-as-you-go solar irrigation service. This service requires Oorja to monitor water output from solar pumps on a daily basis to charge pump customers based on the amount of water consumed. Our Innovation Intern, Tanuj Karia, sheds light on current operational bottlenecks that occur due to manual data collection and handling. This provides a strong incentive for rural utilities to digitise and adopt an Internet of Things (IoT) platform to improve operational efficiency and enable live tracking of performance and impact.

Why digitise? The need for IoT

Recently, during a project site visit in Uttar Pradesh, I got the chance to experience the on-field operations of Oorja's solar pumping service, Oonnati. The solar pumps are operated and maintained by Oorja, which sells water as a service to marginal farmers. Currently, recording of all data - such as the amount of water pumped each day, payments collected, or the occurrence of any technical or customer issues - is carried out manually by the local Pump Operator. Each day, the Pump Operator calculates the payment due from farmers using the solar pumps. At the end of each month, the Pump Operator reports on site operations and payments to the Solar Technician, who calculates the asset utilisation and technical and payment status. This whole process is cumbersome and prone to errors in recording data. It was also observed that this process opens the possibility for deferred or defaults on payments, which can lead to operational losses.

Moreover, for community solar pumping operations, only one farmer can irrigate their field at a time. However, during the peak irrigation season, the demand for water is high, which creates a bottleneck in an operational sense. To compound to these challenges, solar pumping operations are highly dependent on the local weather. Thus, a remote monitoring platform which has the capability to monitor the pump usage patterns of every farmer will enable the Pump Operator to plan the irrigation schedules more efficiently and maximise revenues.

Fig. 1: Oorja's Pump Operator Purushottam Verma and Solar Technician Pushpendra Kumar in discussion with a pump customer.

Can we automate these processes?

Internet of Things (IoT) technology enables remote monitoring of assets, such as solar pumps. By fitting sensors to the solar pump controller or water flowmeter at the pump outlet, we could eliminate the need to manually record data and reduce the likelihood of missing data or errors in recording. With better data on pump utilisation and weather forecasts, Pump Operators could plan ahead to maximise water sales. Adopting pay-as-you-go (PAYG) payment models, for instance using smart cards or mobile money, would enable automation of payments and reduce the likelihood of payment errors or defaults.

Together, IoT and PAYG could enable the digitalisation and partial automation of these operational processes. This would enable Oorja to provide more reliable services to its customers. The ultimate goal would be to streamline all data on asset performance, operations, customers and impact, for easy access by company management and financiers.

How has IoT been successfully used by other utilities?

The use of IoT, PAYG and digital technologies in the social business and development sectors is a rapidly growing field. Below we highlight some successful examples from other utilities operating in emerging markets.

An early adopter of IoT is the water, sanitation and hygiene (WASH) sector. In 2013, Portland State University and SweetSense Inc. developed mobile network-based sensors for monitoring handpumps in rural Rwanda. It was observed that 1 in 3 handpumps installed for water delivery were not functional, reflecting a lack of operations and maintenance services. Sensors were placed inside pumps to detect whether the pump is functional and send this information over to a central database. Following the trial, the maintenance downtime was reduced from 152 to 21 days on average. This, in turn, improved the willingness of the customers to pay for these services and increased the utilisation of the handpumps.

Fig. 2: One of Oorja's solar irrigation pumps showing the water flowmeter used to monitor water output. A sensor could be retrofitted here to enable remote monitoring of water sales.

Sanergy is a social enterprise that provides sanitation and waste management solutions to people living in urban slums in East Africa. They implemented mobile-based IoT solutions by installing sensors in toilets in Nairobi, Kenya. These enable Sanergy to monitor the waste fill levels in toilet waste cartridges. This innovation is expected to facilitate optimal waste collection schedules and efficient service delivery.

Another example from the WASH sector is CityTaps, a social enterprise developing technological and financial solutions to provide water utilities to urban consumers. CityTaps piloted a PAYG model to provide water services to its customers using prepaid smart water meter and billing software. From the pilot in Niger, it was found that 89 % of customers preferred mobile payment methods to conventional payment methods. It made the water service more affordable, enabled flexible payment schedules and the customers found the system very easy to use.

At the intersection between IoT and mobile financing services, pay-as-you-go (PAYG) models are increasingly being used in the solar sector. PAYG solar has already been implemented in 800,000 solar home systems with 40,000 new connections being made on an average each month. PAYG enables secure and efficient collection of payments through mobile money, and it provides additional motivation to the customers to make regular payments as the service is otherwise suspended automatically. It also facilitates addition of more people to formal financial systems.

The case studies above provide rich evidence of the merits of IoT solutions and PAYG models to improve operational efficiency of rural enterprises.

How do IoT systems actually work?

An IoT system essentially consists of three elements, namely (a) data acquisition, (b) data transmission and (c) data monitoring and analysis. Data acquisition is the collection of relevant data using sensors and logging it onto the system hardware. The data is then transmitted from the sensors to secure cloud servers at periodic intervals. Transmission can occur using several mechanisms depending on the site to be monitored and costs. Some popular data transmission methods are Bluetooth, Wi-Fi and mobile networks. Data is also sent to data monitoring platforms for the user to view and analyse the data received. Various users, such as customers, operators, management or financiers, can then interact with the data monitoring platform online to gain a snapshot of the technical status, assets utilisation, payment collections, customers and impact. One example of a system architecture is given below.

Fig. 3: An example architecture for an IoT system​. Blue arrows represent automated transmission of data without operator intervention, while orange arrows indicate manual data entry.

Challenges involved in implementing IoT systems

The major challenge in implementing IoT systems is the relatively high lifecycle cost of installing sensors, maintaining cloud servers and developing the monitoring platform. This can cause the payback period of such projects to increase significantly. Despite the obvious benefits from an operational efficiency and customer service perspective, this understandable leads to hesitation in the minds of some companies and financiers. Additionally, integration of such systems with existing assets is not straightforward and requires significant planning, resources and time.

The majority of successful PAYG implementations have been in sub-Saharan Africa, where mobile money is more widely used. India is a cash-based economy and there are greater challenges in getting people to use mobile payment services mainly due to lack of awareness, so replicating similar success in India will not be straightforward.

Significant technical expertise is also needed for processing of data that is read from cloud servers. Careful attention must be paid to build a digital platform that is flexible to various needs of the enterprise and to ensure security of data.

Finally, the development of IoT systems can be a lengthy process. Based on the experience of utilities operating in emerging markets, GSMA estimates that it takes around 75 weeks to develop IoT systems before they are ready to be implemented on field if developed in-house.

Rural enterprises should consider these difficulties and conduct a cost-benefit analysis before making a decision on whether to implement IoT systems to reap their considerable benefits. As the common adage goes “the greater the risk, the greater the reward!”

All Posts

Almost done…

We just sent you an email. Please click the link in the email to confirm your subscription!