This study demonstrates the hybrids distributed generation model which can be a cost effective solution for providing energy services in rural Uttar Pradesh. Distributed Generation can help to reduce both technical and non-technical losses by decreasing the grid issues, needed to deliver adequate and quality electricity. The high costs of delivering power to remote areas has not been adequately accounted for in past by energy planning in Uttar Pradesh and should be taken into account when choosing energy supply options in remote areas. The susceptibility of the system to non-technical loss may also be reduced by pushing the center of control closer to the user, thus improving the incentives and control on theft through social, managerial, and technical means. By initiating the generation sector from the bottom-up, the market power of incumbent utilities may be reduced, which would encourage a range of innovations in the Uttar Pradesh electricity sector. It is anticipated that the findings of the study will be helpful to market players in India and beyond as reform attempts are shaped by more private players and partnerships.