SELCO: Providing Sustainable Energy to the Bottom of the Pyramid Consumers

<< Previous

Hande, born in Kundapura, a coastal town in Karnataka, and raised in Rourkela, a town in Odisha, in India, was an alumnus of the Indian Institute of Technology, Kharagpur. Soon after completing his engineering, he pursued his masters in renewable energy engineering at the University of Massachusetts at Lowell, in 1991. Subsequently, he started pursuing his doctoral degree at the University of Massachusetts. As a student, he was keenly interested in finding a sustainable solution to India’s energy woes.

Thus he took up heat transfer issues in large, centralized thermal power stations as his research subject. To get to know the ground realties, he decided to visit some of the developing countries where access to electricity was a major problem. He went on a field trip to the Dominican Republic in 1991. While doing his research, he observed that there was a lot of darkness and poverty in the country. Therefore, he decided to take a close look at the challenges of living in such remote and poor places by staying in one such place. He also explored technology that could improve the lives of the people living in such areas.

Soon, Hande was exposed to the work of Richard Hansen (Hansen), an American engineer and friend of Hande’s professor at the University of Massachusetts, Jose Martin (Martin). Hansen’s work showed him how solar energy could transform the lives of the underserved. Hande noted that the poor people in the Dominican Republic were paying for Hansen’s decentralized solar PV lighting systems. After coming into contact with Hansen, Hande found that a market survey conducted by Hansen in the Dominican Republic in 1984 had revealed that around 50 percent of the people were ready to use PV if they had to pay a monthly fee equal to the amount they paid for energy and if maintenance was guaranteed. Thus, Hansen realized that if the burden of a down payment could be eliminated, the customer base would rise significantly. Hansen then figured out that the PV system could be sold as a service rather than as a system. Instead of expecting the customer to pay for the capital equipment, an investor-owned solar utility could collect a monthly fee for providing reliable solar electricity. Subsequently, Hansen associated himself with micro-credit organizations and local NGOs, which offered down payment as well as loans that could be easily paid by the BoP consumers. Commenting on Hansen’s business model, Hande said, “I was very moved by what he had done. I decided that if I could in some way give back all that I had received from my country, it would be by changing the lives of the poor.” Hande felt that a system similar to that of Hansen’s could bridge the economic divide in India. ....

Excerpts - Next Page>>

---

Custom Search

---

Case Studies in Leadership and Entrepreneurship Volume VI Case Study Volumes Collection	Leadership and Entrepreneurship Workbooks Collection