A rural Indian kitchen lit by a D.light lantern
Be Patient, Stay Longer, Come Back. So said BoP academic Ted London at a conference last fall, in reference to his prescribed standard operating procedure for people working in the field. I couldn’t agree more, and I’ve kept that phrase in mind ever since.
As I read the new WRI/IFMR report, Power to the People, I once again came back to this mantra. The companies profiled by the report – including Acumen Fund’s own D.Light Design, SBA Hydro and Husk Power Systems – are doing all three, in spades. But challenges remain, and the report rightly focuses on two: marketing/distribution and government policy. Neither are easy nuts to crack, and both require long term solutions.
On the marketing and distribution front, Power to the People looks at both solar lantern companies (like D.Light) and cookstove companies (like Envirofit). These firms are selling game-changing – but unfamiliar – technologies into far-flung areas. Customers have to trust that the new technology will work, and that if it doesn’t, the company selling it will come back to fix it. Of course, this requires the company to be patient, and in many cases, stay longer in a village or town than it would have were it selling, say, soap. The sales cycle demands it.
Utilizing a for-profit model, a company naturally wants to sell as many lanterns as it can, as quickly as possible. So the difficulty remains: What are the best ways to balance the unique needs of a hard to reach rural market with the necessity of maintaining strong margins? Power to the People suggests that companies like D.Light ought to partner with rural NGOs and market development organizations that have longstanding experience in these markets. It’s good advice – and D.Light is actively doing so.
Husk Power Systems in Bihar, India
On the policy front, WRI and IFMR zero-in on the kerosene subsidy offered in India. This subsidy has the best intentions – to make a critical input available to as many people as possible at a price that people can afford. But in practice, it’s helping to crowd out innovations. This is not to say that the government should kill the kerosene subsidy and offer a solar lantern subsidy instead. What might be more helpful would be some kind of “energy voucher” program through which customers can offset the costs of their energy spend – whether kerosene, grid electricity, diesel gensets, or solar lanterns – based on their specific needs and situations. Vouchers are ripe for abuse, so the details would need to be ironed out, but it’s a step in the right direction – one that WRI and IFMR astutely point to in the report.
If you’re interested in the role investors, entrepreneurs and policymakers play in terms of getting products and services to the poor, then this report is about 90 minutes of reading that I strongly recommend. Kudos to WRI and IFMR for their strong work and congrats to the Acumen companies who are bringing power to the people of rural India in penetrating ways.