Minigrid systems powered by solar photovoltaics and battery storage are being deployed around the world to provide basic energy access and facilitate economic development. We use a minigrid simulation and optimisation tool that we have developed to assess various minigrid options in meeting the growing electricity demand of a community in rural Uttar Pradesh, India, in terms of the reliability of the service they provide, the cost of electricity, and total greenhouse gas emissions. We assess the breakeven distance at which off-grid minigrids are favourable in comparison to extending an unreliable grid network with a minigrid backup system, both with and without a carbon price. We suggest that policy recommendations that would encourage the use of minigrids for sustainable rural development, for example allowing subsidies to be available for system expansions and minimum service reliability requirements.