In a developing country such as India, 44% of the population does not have access to power and for many others, the power supply is unreliable. A nanogrid, defined as “a single domain for voltage, reliability and administration”, is a possible solution to distribute power to such off-grid areas. Built from the bottom up, nanogrids have the ability to function independently, using locally generated power (such as solar power) as the power source. Such grids enable residents to lead more productive lives, with improved access to power. This thesis designs a new communication protocol for nanogrids to enable matching demand to short-term limited supply. A review of the existing local grid projects in off-grid areas in developing countries is covered – outlining the cost per kWh incurred by the customer, the communications (if any) defined in each local grid and the supply duration of the local grid. A communication protocol for a nanogrid is presented, defining a list of messages required to enable communication and the use of the Link Layer Discovery Protocol (LLDP) to implement this list. A simulation evaluation of a nanogrid deployed in an off-grid rural area of a developing country is presented. Keeping three distinct days – a sunny, cloudy and rainy day and three months – summer, monsoon and winter in mind, we demonstrate how communication about the local power price of the nanogrid can be used to modulate demand in connected loads, matching present demand with short-term limited supply. Simulation results show that the nanogrid model with communication enabled results in ~95% reduction in unmet demand for the month of December with an initial battery level of 20% (the worst case scenario). These results indicate that a grid can distribute adequate power to the loads attached to it for a month in different seasons. Such a grid, with communication about power can have a great impact in developing countries, where reduced power supply or a brownout is preferred to no power supply or a blackout.