For-profit solar enterprises bring light to millions

Thomson Reuters Foundation - Tue, 12 Mar 2013 20:00 GMT
Author: Chelsea Diana
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By Chelsea Diana

Once the sun sets across large swathes of the developing world, the lack of electric lighting can make a tough job even tougher.

A midwife scrambling to deliver a baby must rely on the small amount of light emitted by a kerosene lamp while taking care not to knock it over.

A flower picker gathering flowers in the early hours before day breaks and the blooms open must balance a basket, shears and a lamp without burning herself. 

These are problems most people in rich countries wouldn’t even think of, says Harish Hande, co-founder of Bangalore-based SELCO Solar. But in poorer nations, where about 2 billion people live without electricity, they are a daily reality.

SELCO Solar, a company that provides sustainable energy solutions for households and businesses in rural parts of India, has developed a simple device – an adapted miner’s headlight that runs on a solar battery. Midwives, flower pickers and others can rent one when needed through a local distribution system.

“We asked how do you elevate (people out of) poverty and how do you look at sustainable energy as a catalyst (for that)?” Hande said in an interview.

The answer may lie in for-profit enterprise.

SELCO Solar and d.light, headed by CEO Donn Tice, provide solar energy systems in developing countries on a for-profit business platform, and are winners of the 2010 Ashden Award for sustainable solutions.  Their executives spoke to AlertNet at a conference in London last week supported by the Shell Foundation on why enterprise, not handouts, will help the poor.

Both social enterprises promote innovative ways of reducing poverty, while helping curb climate change as a positive side effect. They rely on investors and partnerships with banks, instead of government funding.

WHY DO I NEED THIS?

The idea behind d.light is rooted in co-founder Sam Goldman’s Peace Corps service in Benin, when in 2004 his neighbour’s son was burned badly by an overturned kerosene lamp. That got him thinking about how to provide safe and renewable alternatives to the dangerous lamps.  

The U.S.-headquartered company’s business model is centered on creating the best possible product, while keeping in mind humanitarian and sustainability goals.  

“Critically important in the development of any organisation that wants to have impact … is to have a really clear idea of not just what your product and service is and how that is innovative, but how you’re going to get it to people,” Tice told AlertNet. “That’s where the seeds of scale are rooted.”

The first step is introducing the product to the customer and educating them about how and why they need it, he added. d.light sells three types of solar lantern equipped with a mobile charger that cater for different levels of need.

Consumer psyche is different in developing countries, Tice said, and companies won’t succeed if they try to introduce products in the same way as in wealthier societies.

“Education and awareness needs to be created, particularly in the developing world where the consumer has been using the same products and services for generations,” Tice said. “How a consumer considers a purchase of a new product is fundamentally more cautious - they’re not oriented to trial of new product.”

To solve this issue, d.light puts people on the ground in Africa, Asia and the Americas to teach communities and schools about why solar lighting is important.

“Remember that the need is a third of the world’s population, so scale is relative,” Tice said.

SCHOOLS WITH CHARGERS

SELCO’s business model is a bit different.

Working with India’s national rural banking system, SELCO has set up a credit loan programme for rural residents, many of whom do not have bank accounts. It helps them build credit for future loans and become citizens with “an actual voice”, Hande said.

The solar enterprise “stole” its most innovative business concept from a school midday meal scheme, he explained. Instead of enticing rural children with free lunches, SELCO equipped schools with solar-powered battery chargers. If parents want light at night, they must send their child to school to charge the battery for a lantern.

“The glue is the school,” Hande said. “If she does not come to school, there is no light at home. So mother says, ‘I don’t care if you go to school to study, you go to school for light. I need the light tonight.’ So what is the centre point? Education.”

The school covers the cost of the chargers, while the household solar-powered lights are financed separately. The initiative results in higher school attendance rates, and allows children to study in the evening, Hande said.

The increased use of cleaner energy is an added benefit rather than the main goal, he explained.

So far, SELCO has brought light to more than 1 million homes and schools in rural India since 1994. d.light has done the same for more than 13 million people worldwide since 2008, with ambitions to reach 100 million by 2020.

For Tice, the most rewarding aspect of his business is how it enables people in off-grid areas of developing countries to carry on living their lives after dark.

“If you had four more hours per day, what would you do?” he asked.

Chelsea Diana is an AlertNet Climate intern.