Partnerships in Sustainable Off-Grid Solar Power
The complementary contributions of many partners were needed to bring eco-friendly solar power to off-grid villages in the developing world.
by Neville Williams
Neville Williams, a solar energy pioneer since 1988, founded both nonprofit and for-profit organizations offering solar technologies for the developing world and the United States. He is a journalist, author of Chasing the Sun: Solar Adventures Around the World (2005).
We take electricity for granted in the developed world. But for a third of humankind electricity is a non-existent luxury. Forget about computers, electric appliances, and iPods, these two billion people, by U.N. estimates, have no electric light. They continue to use fuel-based lighting: kerosene, oil, candles, propane, and biogas.
Not only are they in the dark, they contribute unwittingly to global warming, getting little in return. One World Bank study concluded that off-grid residential households consumed 38 billion liters of kerosene globally each year, resulting in an estimated 98 million tons of carbon dioxide emissions into the atmosphere.
To address these dual issues - greenhouse gas emissions and the lack of electric light in the developing world - would take the cooperation of many players in the form of partnerships between NGOs, governments, private businesses, entrepreneurs, village development groups, donors, and banking institutions.
Forming partnerships to promote solar rural electrification in the developing world was the mission of the Solar Electric Light Fund (SELF), which I founded in Washington, D.C., in 1990. Solar photovoltaics (PV), which convert sunlight to direct current, had come down in price from $90 per watt in 1978 to $5 per watt in 1990. Solar PV could now become a great human development tool.
Solar electricity, even produced in small quantities house by house, accomplishes three things at once. Inexpensive electric light is provided while fewer fossil fuels are burned. A third benefit is health: Kerosene lamps are exceedingly dangerous, can cause terrible burn injuries, and the smoke is bad for eyes and respiration. Solar rural electrification eliminates all three problems.
Solar power also brings electronic communications in the form of television and, lately, power for cell phones. Kerosene, while it provides dim and dangerous light, won't run a television.
SELF attacked these issues in eleven countries over the next dozen years. SELF, which also means energy "self" reliance, raises funds from charitable foundations in the United States to develop and finance solar rural electrification projects. NGOs, government officials, and small businessmen around the world would contact SELF to request funding support for solar. If SELF liked the project and the proposed partner, it would secure the funding and design a project that featured revolving loan funds and technical assistance. The local partner would then be under contract to implement the pilot solar electrification projects in remote and rural regions that had no hope of ever connecting to the electric grid.
Our first partner was a venerable NGO in Sri Lanka called Sarvodaya, led by the visionary Dr. A.T. Ariyaratne, who helped us plant a "solar seed" in dozens of villages. Sarvodaya set up a solar rural development division, and pioneered financing for solar home systems (SHS), enabling anyone who was already spending $10 a month on kerosene and candles also to have bright solar electric lighting in their homes.
Farmers would show me their "retired" kerosene bottle lamps as they proudly switched on their electric lights. These 35Wp (watt peak) SHS, including solar panel, wiring, Compact Fluorescent Light (CFL) lamps, battery, and charge controller, cost between three and four hundred dollars, which families could pay over three or four years. Farmers, with their cash-crop incomes, were good credit risks for micro-lending institutions, we discovered; few ever defaulted. Lighting was too important not to pay for it.
The rural solar market exploded, and several private solar power companies were formed in Sri Lanka to serve it, while Sarvodaya's rural credit program financed the purchase of thousands of solar home systems. A $40 million World Bank solar project followed. Instead of extending the country's power-constrained electric grid, Sri Lankans installed more than 100,000 solar lighting systems.
SELF organized other partnerships on the Sri Lankan model. In Nepal, we partnered with the Centre for Renewable Energy (CRE) organized by engineering professors at Tribhuvan University. Partnering, in turn, with a local development committee, SELF and CRE brought solar lighting to a Himalayan Gurkha village. The villagers eagerly bought into the project. SELF provided the credit, and the solar energy systems were eventually paid for through a local revolving loan fund of which the village elders kept meticulous track. Prime Minister Girija Prasad Koirala flew in by helicopter to inaugurate Nepal's first solar village in 1998. Today, a dozen solar installation companies exist in Nepal, with credit provided by rural development banks. Thousands of families now have electric light, phones, and satellite TVs.
In Vietnam, we established a partnership with the Vietnam Woman's Union that effectively organized credit programs and trained women in solar installation.
Many Vietnamese expected to get electricity free from the government, and could not understand why they had to pay for solar electricity. But women, the main beneficiaries of electricity in the home, and who handle household expenses in Vietnam, quickly came to understand the market economy. Electricity is available if you are willing to pay for it.
However, we soon saw that expanding solar rural electrification on a nonprofit charitable basis was not going to be sustainable. The Rockefeller Brothers Fund (RBF) and the Rockefeller Foundation, which had been supporting SELF, urged me to consider "commercializing" SELF's projects, to make them into actual businesses.
India was the biggest challenge and, ultimately, our biggest success. Dr. Harish Hande, who had helped me launch SELF's pilot project in Karnataka, and I cofounded the Solar Electric Light Company (SELCO), which became SELCO-India. With funds from RBF and a "conditional grant" from USAID and Winrock International, we launched what is today India's largest "social enterprise."
After determining that a business approach would be viable, I formed a U.S.-based parent corporation to raise investment capital to expand SELCO in India and launch similar ventures in Vietnam, Sri Lanka, and China. European investors believed in our "mission-driven" business approach; their help enabled us to prove that "profits and purpose" can go together. Profits make social purpose sustainable. SELCO-Vietnam, which continued to work with the Vietnam Women's Union, won the 2001 U.S. Department of State's "Award for Corporate Excellence" for "outstanding corporate citizenship, innovation and exemplary international business practices."
In India, adhering to these values along with Dr. Hande's brilliant entrepreneurship resulted in a fast growing "solar service company" that today has 170 employees and 35 solar home centers in South India. SELCO-India has electrified more than 110,000 rural families. People could afford solar electricity, we had discovered, if someone would only bring it to them.
But even the "richest of the poor" needed credit to buy a solar home system. Much of SELCO's effort was spent organizing partnerships with rural lending institutions and helping them to find donor money to support low-interest solar loan programs. We initially partnered with rural Grameena ("rural" in Hindi) banks and trained more than a thousand bankers to understand the benefits of the technology we were asking them to finance, while assuring them that if the farmer had good credit, he could afford the loan payments. If the borrower refused to pay, the bank could repossess the system, and we would buy it back. This almost never happened. By 2002, SELCO-India had a network of more than 400 South Indian rural bank branches making solar loans to our customers.
Our customers were unelectrified cash-crop farmers with nice four-room houses on land they owned (except in China). SELCO technicians wired them like any modern house, with wall-mounted light switches and extremely bright compact fluorescent light fixtures - which we also manufactured - and solar panels mounted on poles. In India and China, everything was made "in country." We imported solar panels in Sri Lanka and Vietnam. Later we used bright LED task lights along with CFL area lights. SELCO had reached close to a million people by 2010 as the company celebrated its 15th year of operations. And the company is profitable. As Dr. Hande once put it, "I wake up every morning amazed that we are making money selling solar energy to poor people."
Non-polluting, bright home lighting is no longer beyond the reach of the millions of people who live far from the electric grid. Thanks to worldwide partnerships involving entrepreneurs, donors, banks, technical trainers, governments, and project developers, each with their own role to play, nonpolluting, bright home lighting is no longer beyond the reach of the millions of people who live far from the electric grid. Success, we learned, depends entirely on dedicated and highly motivated people who are willing to work hard, take risks, and overcome bureaucratic impediments.
Today, partly inspired by SELF and SELCO, solar entrepreneurs abound worldwide. Solar electrification is a growing business as prices for solar photovoltaics continue to fall, and developing world incomes rise. Solar offers a bright future as the world puts the sun to work to eliminate "energy poverty."
The opinions expressed in this article do not necessarily reflect the views or policies of the U.S. government.
