"solar energy is cheap for the poor, expensive for the rich"

Lighting up lives in rural India
24 Jun, 2007 l 0013 hrs ISTl-Neelam Raaj/TIMES NEWS NETWORK

NEW DELHI: An auto driver, a midwife, a rose picker...these may not sound like your average consumers of renewable energy but for Harish Hande, a 37-year-old engineer whose solar energy company Selco India recently won the prestigious `Green Oscar', it's all about tailoring innovation to match a particular need. "Rural India isn't running microwaves and ACs. Here, a little electricity goes a long way," says the IIT Kharagpur alumnus who founded the company 12 years ago.
Let there be light The solar panel installed above R Vijaya Kumar's small house on the outskirts of Bangalore has ignited the change from auto driver to entrepreneur. Every day at 4 pm, Kumar drives to the Bomanahalli market on the outskirts of Bangalore with 50 batteries that he hires out to street vendors for Rs 15 per battery per night. He returns at 11 pm to take them back, having made thrice what he would earn as an auto driver. Not only can the vendors give up their polluting kerosene lamps for a cleaner and cheaper energy alternative but Kumar gets enough money to repay the loan he took to buy the solar panels with which he recharges the batteries every day. Both in Karnataka and Gujarat where Selco works, lives have been touched — and transformed by solar power. From helping midwives in Gujarat to deliver children with the aid of solar lighting kits to giving rose-pickers outside Bangalore solar-powered headlamps so that they can work in the pre-dawn darkness with their hands free, innovation has been the key to success. "Design has to be customised to fit the needs of the customer. The one-size-fits-all approach that's usually used when the user is from a financially weak background invariably fails," says Hande. Selco, which won the Ashden Award (or the Green Oscar as it's called) for the second time, has also tied up with the Self Employed Women's Association (SEWA) bank in Gujarat where it plans to sell a range of energy services, including energy efficient stoves, to the bank's 300,000 low-income female customers.
Banking on micro-finance A few extra hours of work after sundown, less fumes from lamps and more study time for kids — it's all these things that make a difference to people hampered by electricity outages and the reliance on a few expensive litres of kerosene. Selco, say the Ashden award judges, is based on the conviction that solar energy is cheap for the poor but expensive for the rich — that is, poor people can afford to buy solar systems, because they pay so much for other forms of energy, such as kerosene and batteries. But it's still difficult to convince the poor to shell out anywhere between Rs 18,000 and Rs 20,000 for a standard 40-watt solar light system that can light several 7-watt bulbs and charge batteries which can be used after dark. For daily wagers, that's a stiff financial commitment. That's where microfinance came in, says Hande. Initially most banks were reluctant to lend money to those who earned less than Rs 100 a day but company executives managed to convince them that increased productivity would enable borrowers to repay loans. Now, fewer than 10% of customers default. It also taught Hande that financing had to be as innovative as the product. "While some found repaying Rs 300 a month difficult, they found it easy to put away Rs 10 a day." The answer lay in ensuring a collection mechanism that would work on a daily rather than monthly basis. Service success There was still the need to address a misconception — that solar-powered technology doesn't work. "Without after-sales service, the technology gets a bad name," points out Hande. And with ambitious plans of reaching 200,000 customers — the current client base is 80,000 — that's one thing he certainly doesn't want. neelam.raaj@timesgroup.com

I loved this article and I hope the experience in business innovation can also translate to research innovation (like technology to create lower price solar panels)

Social Entrepreneurship: Definition

A couple of weeks ago we had a lively debate in the DV lounge at Stanford: Topic - are we social entrepreneurs? Needless to say there was not much agreement. But we did agree on one thing- Who is the hottest date in town these days? A social entrepreneur!
Why? hmm.. interesting... sounds like an oxymoron, could be different in a familiar sort of way; after all everyone knows the words "social" and "entrepreneur" separately so why not together?
The Stanford Social Innovation Review (spring 2007) has come up with a whole article "Social Entrepreneurship: The Case for Definition". In the DV loune we agreed that all entrepreneurs are good entrepreneurs, its just that social ones are the new kids on the block. So when you are out and about try my simple test to help determine who's who -

Business Entrepreneur:
Motivation: Economic agenda (social benefits follow)
Metric: Revenue growth, profits ($)
Philosophy: Support employee to grow market

Social Entrepreneur:
Motivation: Social agenda (economic benefits follow)
Metric: Social return sustained by revenue from business
Philosophy: Grow market to support employee

Stanford-India Biodesign

A 2 year fellowship program from Stanford University. Deadline July 15th - Checkit out
Stanford-India Biodesign

In the new India, the old problem with electricity - International Herald Tribune

Green buildings for Gurgaon, India
I was in India a few months ago and the sleepy farmland area just outside new delhi is sprouting glass behemoths like you wouln't believe. Real estate is booming but to makeit sustainable the buildings need new technology. Green buildings are popular in Europe and starting to gain popularity in the US. But for anybody that really wants to grow try doing business in India- Check out the report below:
In the new India, the old problem with electricity - International Herald Tribune

Infra sys and Solar energy

Infrasys is a for profit social business that is investing in rural India.
Check out the update on solar energy in India -
http://nri-home-coming.com/Infrasys/June2007_English.pdf

SRI - Socially Responsible Investing: A new paradigm?

A precise definition of Social Entrepreneurship continues to elude us as we go about our task of bringing our projects to life. We are moving on from the conceptual stage to that of a living organism, the pilot stage in which we will actually interact with the under-served people we intend to impact the most. Along the way we will face challenges in raising capital, remaining sustainable, managing growth, managing the different constituencies that make up the social enterprise, and yet managing to remain focused on the initial mission with which we intended to start out. But are we the only ones with problems? But another key constituent in the social eco-system, the social investor, has her own set of problems. Her big challenge is to choose from amongst a range of social initiatives and decide which one gives the biggest bang for the buck.

The Social Investment Forum (http://www.socialinvest.org) defines “Socially Responsible Investing (SRI)” as the integration of personal values and societal concerns with investment decisions, in the sense of considering the investor’s financial needs with the investment’s impact on society. So, what’s new here? Is this a new paradigm for age-old philanthropy? Is it new wine in an old bottle? Is there a problem of plenty here? Maybe, but maybe not.

To give credit where it is due, there is now a willingness on a certain part of the investment community to take a more holistic look at investment by considering the impact on society and the environment, in addition to a return on investment. So metrics such as social return on investment, social impact and social outcomes are just as important to the socially responsible investor as they are to the social entrepreneur.

There is hope yet, that the investment climate will become conducive to the needs of the social enterprise even though the process may be slow. We need an enabling ecosystem to survive. How do we save the world, if we don’t build sustainable social enterprises? So let us move forward and redefine the social ecosystem.

Shashank

Mobile phone technology is solving the last mile problem:
Mobile Phones Revolutionize African Banking - Yahoo! News:
"Mobile Phones Revolutionize African Banking "

Note the title - Interesting update on MDG - Millenium Development Goals
Millennium development holes : Article : Nature

Empowering the Poor: Information and Communications Technology for Governance and Poverty Reduction A Study of Rural Development Projects in IndiaRoger Harris and Rajesh Rajora Asia-Pacific Development Information Programme (APDIP)2006

http://www.comminit.com/strategicthinking/st2007/thinking-2008.html--

Social Sweat Equity: Monetisation of Social Capital

We have recently had a wonderful and lively discussion on the topic of social entrepreneurship. A lot has been said about building a sustainable organisation using the standard tools of business, so I will focus this discussion on just this issue of sustainability.

It is not clear to me how one would build in sustainability without periodic infusion of capital. Is an NGO that is built on periodic grants a sustainable entity? Or, does sustainability imply a steady revenue stream which is higher than the expenditure of an organisation? Or, is there something else that provides sustainability?

This is especially hard for those organisations that do not fit into a classical mould of a business where the consumer or customer ma not be a paying customer. Capital infusion could be grant-based, or it could be through the venture capital route. While traditional philanthropies and foundations have often provided grants to NGOs or non-profits, the average VC does not understand social entrepreneurship. While the VC understands financial metrics that are easily measurable, an NGO cannot easily provide metrics for social impact.

So we need to find a new abstraction to help in the monetisation of social impact. We need a new ontology, a new vocabulary, that will convey the meaning of this abstraction in traditional economic terms. We need an abstraction that will allow us to put an economic value on social impact. For the moment, let us call this abstraction "Social Capital" or "Social Sweat Equity". An analogy of "sweat equity" might be in order here.

The concept of "sweat equity" came up when VCs started funding entrepreneurs. This abstraction allowed the entrepreneur to put an economic value on his/her prior work in getting an idea off the ground and claim a significant share in a venture where cash infusion was provided by the VC. Wouldn't it be nice if we could use the abstraction of "Social Capital" or "Social Sweat Equity" to attract potential funders into investing into a social venture just as sweat equity is valued by a VC in a traditional venture?

We need to get some economic thinkers and financial gurus to think about this concept and provide a theoretical foundation which may then benefit the field of social entrepreneurship in the long run. "Social Capital" or "Social Sweat Equity" could clearly be defined in a way that would measure social impact which could then be monetised. Hence it is very important to create this abstraction.

Any ideas? SocialEquity.org ?

Shashank

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Digital Vision Program at Stanford University
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