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Energy Entrepreneurs Can Unlock the Solution to Energy Poverty Energy Entrepreneurs Can Unlock the Solution to Energy Poverty

Energy Entrepreneurs Can Unlock the Solution to Energy Poverty

by Meghan Neal

February 25, 2013

Before the lightbulb, man went from burning wood, to paraffin and whale oil, to kerosene. When Thomas Edison and his associates successfully built the first incandescent electric lightbulb in 1879, they did so with the goal of creating a high resistance system that would require far less electrical power than was used by existing arc lamps. The role of technological innovation in that context was to maximize the output from a specific fuel source to meet our energy needs. Since then, the evolution of lighting has made it cheaper, more convenient, and more efficient—freeing up time and resources. Enhanced agricultural productivity could not have happened without innovation in energy systems like tractors, irrigation, machinery for drying, and food processing.

Changes in energy sources and their use have fueled economic growth, but this has not occurred evenly throughout the world. If you were to look at a map measuring the level of economic activity that takes place across the globe, it would look pretty much like NASA’s satellite image of the earth at night:
 

 
 
1.3 billion people lack access to electricity today. They rely on burning wood, candles, and kerosene lanterns for light. This amounts to 1.7 million kerosene-induced deaths every year. A household needs improved energy to cook, work, and study after dark. It needs it to save time spent on gathering wood and to avoid incidents of respiratory diseases caused by smoke-filled rooms and burning by kerosene accidents. It needs improved energy to save money spent on costly kerosene and to pursue increased economic productivity. 
 
Energy Poverty is as much one of our generation’s greatest development challenges as it is one of our greatest opportunities. Each year the poor spend $37 billion on poor-quality energy solutions to meet lighting and cooking needs globally. In Tanzania where I currently live, only 15 percent of households are connected to the grid, leaving 7.1 million households, mostly rural, off the grid.  
 
This leaves an estimated annual market opportunity of $270 million for just off-grid lighting, and that doesn’t even include the market opportunity that exists for clean cookstoves, cellphone charging, solar water heating and other appliances like TV. Grid extension is no longer the economic and environmental answer for reaching off-grid households. Even where transmission lines are visible, they are out of reach for low-income urban and peri-urban households. In my neighbourhood in Arusha, it costs $450 to $575 to connect your home to the grid, because you must cover both the cost of erecting a new pole and the wiring. 
 
The United Nations declared 2012 as the Year of Energy Access. And 2014 to 2024 has been declared as the Decade of Energy Access. I’m not sure if meetings, press releases, and grand new programs provide us with a measure of progress, but I do believe that increasing the number of households freed from energy poverty—the number of families who have leapfrogged from using firewood, candles, and kerosene straight to solar-powered LED lighting, for example—does.
 
I also believe that delivering these solutions is not a one-size-fits-all, vaccine-like program. These solutions require appropriate technologies, a deep understanding of local market needs, robust distribution channels, and innovations in payment mechanisms. This is what excites me: It means that giving households access to modern forms of energy (that frees up time, resources, and opens the door to new economic opportunities) relies on local problem solvers—entrepreneurs.
 
So how do we empower energy entrepreneurs in developing countries? There are a few examples in the solar space: social enterprises like Selco India, SolarAid and Solar Sister that train and employ hundreds of micro-entrepreneurs. Companies like d.light, Barefoot Power, Greenlight Planet, and BBoxx have created solar energy solutions designed specifically for off-grid markets that are sold through local distribution channels. Impact investing funds that specifically target high-impact energy companies exist, like Acumen Fund and Invested Development. Incubation and mentoring programs like Embark Energy and Challenges Worldwide provide a launch pad for local entrepreneurs. And we at SunFunder have created a crowdlending platform that allows anyone around the world to provide working capital loans to solar companies operating in these markets.

We just launched a new project to bring solar lights to Zambian families via SunnyMoney's solar schools campaign.

Click here to add bringing solar power to families living in energy poverty to your "to do list." 

This month, challenge a neighbor to GOOD's energy smackdown. Find a neighbor with a household of roughly the same square footage and see who can trim their power bill the most. Throughout February, we'll share ideas and resources for shrinking your household carbon footprint, so join the conversation at good.is/energy


 

Original image courtesy of SunFunder

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