Starting and running a solar lamp retail business in a developing country like Kenya is no small feat. Kenya lacks strong transportation infrastructure for product distribution, and the bureaucratic red tape is not only tedious but can be opaque to foreigners. Meanwhile, the customers who need and want solar portable lamps most are those who can least afford it.

Solar portable lamp companies, such as Little Sun, must navigate informal economies and limited distribution infrastructure to market and sell their products to customers who benefit from the environmental, social, and health improvements that these lamps can provide. (Source: Little Sun)

But although Kenya’s economy lacks many of the market and political institutions that facilitate business operations in the industrialized world, there is significant potential for businesses to support rapid economic growth and generate social impact. A variety of successful solar portable lamp businesses have reframed Kenya’s lack of institutions (let’s call them institutional voids) as opportunities for economic growth.

In 2010, two Harvard Business School professors published the book Winning in Emerging Markets: A Roadmap for Strategy and Execution, highlighting the opportunities and challenges of operating a business in a developing country. They also released a toolkit for identifying and dealing with a country’s institutional voids, raising the following questions that are pertinent to running a solar portable lamp company in Kenya:

  1. Do large retail chains exist in the country? Do they reach all consumers or only wealthy/urban ones?
  2. Do consumers use credit cards, or does cash dominate transactions? Can consumers get credit to make purchases?
  3. Is there a deep network of suppliers? How strong are the logistics and transportation infrastructures?

Successful solar portable lamp companies in Kenya are using a variety of strategies to address these challenges and to mitigate, avoid, and leverage the institutional voids that would otherwise deter or limit business operations. 

Read the rest of this entry

developing countries, distribution, green economy, infrastructure, institutional voids, Kenya, rural electrification, solar portable lamps

Across the developing world, retailers are selling solar-powered portable lamps that can meet basic lighting demands, reduce dependence on expensive and inefficient kerosene lighting, and contribute to important development goals like energy access and improved literacy rates.

Solar portable lamp companies must find innovative ways of restoring consumer confidence in their products after a flood of cheap, faulty models created a distrust of the technology (Source: OneDegreeSolar).

Small solar portable lamp companies are learning how to navigate the relatively unstructured business environments of developing countries, but a lack of consumer confidence in the unfamiliar technology is a serious deterrent to scalability. Confidence has been eroded further by the presence of low-quality lamps that mimic higher-quality products. To increase sales and improve both the social and environmental impact of solar portable lamps, companies must develop a dependable product and brand that is appealing to customers both familiar and unfamiliar with solar technology.

Gaurav Manchanda, an Indian-born entrepreneur and founder of One Degree Solar, found a new way to restore consumer confidence in a low-cost lamp that meets the standards of the Lighting Africa project. He developed a short messaging service (SMS) technology that both provides customer service and allows the company to monitor the social and environmental impacts of every lamp sold.

The use of mobile phone technology has skyrocketed in East Africa, and Manchanda’s development of a customer service practice that utilizes this unique market characteristic allows his product to penetrate markets previously characterized by uncertainty. Manchanda’s interest in tracking the social and environmental impact is based on his background in development work, but is also reflective of this market as a whole. Companies that operate in the solar portable lamp market are typically social enterprises interested in the triple bottom line of economic profit, social impact, and environmental health.

Manchanda realized that high-quality customer service is a competitive advantage and a way to generate confidence in relatively new and unfamiliar products among customers with very little purchasing power. With the help of an in-country partner, he developed an SMS platform hosted by Safaricom and Airtel that allows his company to send bulk text messages to purchasers of One Degree Solar products.

Read the rest of this entry

developing countries, east Africa, energy, Energy Access, Green Technology, Innovation, rural electrification, solar portable lamps

Kerosene lamps, such as this one, are used widely for illumination in eastern Africa, but contribute to numerous health and economic problems (Source: Firesika).

The United Nations recently declared the beginning of the Decade of Sustainable Energy for All, continuing the focus on energy access that it began in 2012 with the Year of Sustainable Energy for All. Energy access is widely recognized as a key component of achieving the Millennium Development Goals set out by the United Nations, with impacts on the improvement of health, education, and economic development.

This international focus on energy access stems from the fact that, in many developing areas of the world, energy use is still mostly limited to traditional biomass use (i.e. burning wood for cook fires) and kerosene for lighting, with extremely limited or zero access to modern energy services. In Ethiopia, only 2 percent of the population in rural areas has access to electricity. In Kenya, the inhabitants of remote areas are only slightly better off, with 4 percent electrification rate for the rural population.

However, the use of kerosene for illumination brings with it numerous health, environmental, economic and social problems.  Indoor use of the fuel use significantly deteriorates air quality in homes, leading directly to respiratory illnesses and fatalities. And, as if chronic illnesses are not enough, the risk of fire from overturned kerosene lamps is extremely high. In an interview with an in-country energy expert in Kenya, Worldwatch learned that estimates ranged between 6,000 and 12,000 deaths per year from kerosene fires in Kenya alone, with many of them being children. Overturned kerosene lamps are known to ignite homes quickly and the impacts disproportionately affect women and children, who spend much more of their time within the house.

Read the rest of this entry

Africa, developing countries, development, distributed generation, electricity, Energy Access, Ethiopia, Kenya, kerosene, rural electrification, sub-Saharan Africa

For national governments and international development agencies, access to energy is considered an integral part of development goals. In line with UN Secretary Ban Ki-moon’s Sustainable Energy for All initiative, which calls for universal access to modern energy services by 2030, every Central American government cites expanding rural energy options as a national goal. The construction of the SIEPAC interconnection system from Guatemala to Panama, now nearly complete, will integrate the electrical grid across Central America and facilitate energy trading across national boundaries. But it will not automatically connect the 7.7 million Central Americans who have limited access to electricity and rely mainly on traditional biomass for energy.

The technology for off-grid solar home systems is available; financing is trickier. | Source: Panama's Office of Rural Electrification

Although small-scale power generation technology—including renewable options such as solar photovoltaic (PV), small wind turbines, small hydropower and biomass generators—is advancing quickly, financing is a consistent challenge. Government subsidy levels for electrification  in Central America range from between 20 and 30 percent in Costa Rica to 85 percent in Honduras. Governments and international development organizations typically subsidize grid connection initially, with financial support phasing out as electricity consumers take over the costs of operation and maintenance. Though this model has facilitated a dramatic increase in electrification in Central America, “last-kilometer” electrification makes little economic sense in areas where peoples’ ability to pay for energy remains low. In extreme cases, if users can’t afford a replacement, electrification initiatives effectively have the lifespan of a single light bulb.

Read the rest of this entry

biochar, Central America, clean-burning stoves, microconsignment, microfinance, off-grid, PERZA, rural electrification, solar home systems, solar lamps

For the seven countries of Central America—Belize, Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, and Panama—a transition to renewable energy and low-carbon technologies is imperative. In addition to reducing greenhouse gas emissions, a robust renewable energy industry can stimulate the growth of clean energy manufacturing and help address regional problems such as an energy supply deficit, low rural electrification, and poverty.

Yet despite abundant renewable energy resources—including wind, solar, biomass, and geothermal—Central America remains highly dependent on imported oil, fossil fuel-based electricity, and unsustainable large hydropower. In the 1990s, deregulation of regional electricity markets opened the power sector to private investments, but it also paved the way for a surge in fossil fuel-based capacity, as most governments did not consider policies to promote renewables during the early stages of these reforms.

Solar panels used by Alimentos Campestres to dry fruits and vegetables. Source: Alimentos Campestres.

As the region’s economies expand, led by strong growth in Panama, energy demand is expected to surge. As a result, these countries will only become more vulnerable to high and fluctuating energy costs from imported oil.

Read the rest of this entry

Central America, Guatemala, Nicaragua, off-grid, renewable energy, rural electrification, sustainable development

This is the translation of a previous post, “The Fifth “E”: Is Energy Becoming a Presidential Priority in Haiti”. To read the original in English, please click here 

Aux quatre priorités que le président Martelly a identifiées pour son mandat, éducation, emploi, environnement, état de droit, qui composent les quatre « E », s’est ajoutée une cinquième priorité, l’énergie. Lors des ateliers sur l’énergie organisés par Dr. René Jean-Jumeau, Secrétaire d’Etat à l’Energie le 27-28 septembre, le Président a insisté sur l’impact désastreux des usages actuels de l’énergie sur la couverture végétale, et la nécessité d’une transition vers des sources d’énergie plus propres. Il a conclu : « nous avons besoin d’électricité pour développer l’industrie dont Haïti a besoin, nous avons besoin d’électricité dans nos campagnes, afin que s’estompent des soirs des ténèbres sans lune. » Le premier ministre Garry Conille a également repris ces priorités lors de son discours de politique générale.

La semaine de l'Energie s'est deroulee les 6-12 novembre dans les Caraibes.

Du 7 au 11 novembre, la Semaine de l’Energie s’est tenue au Parc Historique de la Canne à Sucre et à la faculté des Sciences de l’UEH, pour la première fois en Haïti. Pendant 5 jours, étudiants, personnel académique, entrepreneurs, hommes d’affaires, acteurs de la coopération internationale, ainsi que les hauts responsables du gouvernement ont discuté de l’énergie sous tous ses angles, et de son rôle essentiel dans la reconstruction et le développement d’Haïti. Cette exposition, ouverte à tous, a montré les technologies disponibles en Haïti pour substituer le charbon de bois, et améliorer l’efficience des réchauds utilisés actuellement, augmenter de manière signifiante l’électrification du pays, et développer les ressources renouvelables.

Read the rest of this entry

Caribbean, distributed energy, Energy Access, energy planning, Haiti, natural gas, renewable energy, rural electrification

In 2010, for the first time ever, countries that did not industrialize first have invested more money in renewable energy than those countries that were first to industrialize, according to Bloomberg New Energy Finance. Yet within many middle-to-low income countries, large portions of the population continue to have limited or no access to electricity and other energy services. In some parts of sub-Saharan Africa, such as Uganda and Malawi, as much as 90 percent of the population is without electricity. And while there is no single standard for how energy development should take place, addressing the needs of populations with minimal or no access to energy and related services is a critical part of sustainable development. Fortunately, many regions and communities are implementing decentralized and distributed approaches to renewable energy in sustainable ways, including through locally self-determined initiatives and by engaging in international collaboration.

Wind power can be tied to large centralized grid systems or to municipal micro-grids (Source: Reuters)

 

Decentralized renewable energy

Still today, the bulk of energy financing goes to centralized, grid-connected power plants. In 2010, for example, an estimated $40–45 billion was invested in large-scale hydropower, compared to only $2 billion for small hydropower projects. One reason for this disproportionate focus is that international efforts and funds typically emphasize policy change at the national level and through capital-intensive, industrial markets. But while implementing change at these levels is important and necessary, it is not the only way.

Indeed, numerous studies and examples indicate that policies oriented solely toward centralized production and distribution of electricity are inadequate to meet the needs of marginalized people and communities. In contrast, renewable energy technologies provide the opportunity for a development path that is more culturally self-determined, giving individuals and communities control over their own energy sources. Distributed renewable energy technologies constitute an important, community-driven alternative to centralized projects that are often driven by national politics and that can be largely removed from community interests.

Read the rest of this entry

Central America, distributed generation, finance, renew, renewable energy finance, rural electrification, solar power, wind power