Green Energy for a Billion Poor

By George Garland

Energy for All The International Energy Agency estimates that it would take investments of $49 billion each year until 2030 to achieve energy for all. At the same time, it forecasts that there will be a billion people without energy access in 2030. The world’s largest utility companies are included in the Global Sustainable Electricity Partnership (www.globalelectricity.org). These companies need customers ability to pay and a governmental regulatory infrastructure before they can commit huge sums.  A hopeless situation? Mavbe not if off grid systems working directly with the unserved can grow and prosper!

A book by Nancy Wimmer,  Green Energy for a Billion Poor, describes how over 500,000 Solar Home Systems were installed by social business Grameen Shakti in rural Bangladesh between 1996 and 2010. While funding from several sources including rhe International Finance Corporation, World Bank, and USAID provided much needed working capital, solar home systems were sold, not given away. From 2004 onwards, sales of solar home systems exceeded the number needed for Grameen Shakti to break even. This economically sustainable approach is a key feature of the social business model to ensure survival after external funding goes away. The eight years from 1996 to 2004 when Grameen Shakti was cash flow negative underscores the need for patience in establishing a social business and the importance of external funding for initial working capital. As it took many of the rural poor half a year to earn the cost of a solar home system, an eight year start up period goes beyond reasonable to miraculous. So how did they do it?

Pioneering efforts included:

  • Focus on one solution to a single issue
  • Right expertise in the right place
  • Identifying early acceptors
  • Valid information about benefits and costs
  • Listening to concerns of potential customers
  • Adapting technology to needs
  • Follow up service and user education
  • Resourceful and dedicated staff
  • Recognition of financial constraints

Focus on one solution to a single issue While Grameen Shakti later addressed needs for clean cook stoves and energy from biogas, pioneering efforts addressed a solar energy solution to address a lack of electricity. Only choices were amount of solar power.

Right expertise in the right place Engineers were sent to the villages to market, install, adapt and maintain solar home systems.  Potential customers were courted with information and demonstrations by knowledgeable experts.

Identifying early acceptors Shops that could extend shopping opportunity into evening hours; workshops that could extend productive hours; and village leaders who had children currently burning expensive and smoky, unhealthful kerosene for evening studies were identified as good prospects. Early adopters is a bit optimistic as many visits to explain benefits, answer technical questions, work out payment modes, and address concerns over system reliability were usually needed in early sales.

Valid information about benefits and costs Information on expected savings on kerosene or alternative fuels, performance capabilities of different levels of solar home systems, need for customer awareness of system needs, details of cost and financing options, projected income from extra hours of operation, health impacts from eliminating smoke were all carefully and patiently explained. Customers, regardless of level of education, wanted answers to economic, technical, operational, and system capability questions.

Listening to concerns of potential customers Grameen Shakti  personnel listened respectfully to ever so many questions. This paid dividends in building a storehouse of valid information as noted above as well as in adapting products to suit market niches.

Adapting technology to needs Because Grameen Shakti staff were engineers who also installed and maintained systems, they could make technological and procedural adjustments to suit each situation.

Follow up service and user education Rural villages in Bangladesh have no lack of rapid dissemination of information, including customer dissatisfaction. Prompt attention to system needs, including explaining limits and good practices to assure long lasting and reliable system service, was essential. Follow up in collecting payments helped establish that Grameen Shakti was serious about social business and not a giveaway program.

Resourceful and dedicated staff Pioneering staff faced very basic living conditions and demanding travel options. No prima donnas need apply. Staff needed to create responses to healthy skepticism of new technology. New enterprise had to  build trust levels that products would be delivered and maintained. Creativity was essential in showing how payments could be met for those with limited financial resources. Over time, helping communities respond to extreme weather was an overarching contribution of Grameen Shakti personnel.

Recognition of financial constraints Pioneering sales were made on terms of 50% down and the rest in six monthly payments. While Grameen Shakti’s of working capital after credibility with funders had increased allowed for more generous terms of payment over three years, initial sales were on terms consistent with a start up operation that was determined to become economically sustainable.

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