Energy

=Social Entreprenuership & Energy= Steve Capinski Kevin Arnold Wes Martin =**Background:**=

Around the world many people live off the energy grid. Social entrepreneurs are currently trying to decrease this by offering sustainable power in the form of solar energy. Solar energy is reliable and cheap and helps to lower the overall carbon emission. Most of the energy social entrepreneurship being done today focuses in low income households in rural areas all around the world. By offering cheap energy and long term loan packages, the energy programs allow a great deal of people to light their home who are otherwise unable to. This greatly increase quality of life and productivity, as a day is able to be extended under reliable light. There Are currently hundreds of people and organizations who are working to reach these rural areas. On this web page you will see real life examples of people looking to make a difference in their communities through new energy technologies. toc

= 1. Case Study: Fabio Rosa & the STA-SSFA =

"Electricity changed the destiny of humanity in the 20th Century. When it reaches these places where people live in darkness, it means that the modern world has arrived, and their solitude has come to an end. Electricity represents hope in the future" - Fabio Rosa.

**Who:** Fabio Rosa is a native to Brazil and is a social entrepreneur. He grew up in southern Brazil, a rural community where he and his family had been ranchers.Throughout his childhood, Fabio developed the idea that all citizens have a social responsibility to help out their fellow people, so after gaining the necessary tools to do so in his schooling, he set out on his goal to help rural families in the Brazilian communities where he grew up (Fabio 2005).

**Background:** The location is the low-income region of Ecruzilhada do Sul, located within Rio Grande du Sul, Brazil. It is a rural community of approximately 150,000 people who are historically cattle ranchers. These rural communities are what is know as "off-grid" meaning that, there is no electrical grid provider in the area. Fabio Rosa has been combating this problem for several years, and in the process has created the Agroelectric System of Appropriate Technology (STA). The STA is a for-profit corporation, and the home of, "a rural distributed energy initiative dubbed The Sun Shines for All (TSSFA)" (**Yerina)**. In trying to deal with the problem most effectively and efficiently, Rosa studied the area for over a year, collecting data of over 77 families. He asked them to rank their needs and found that electricity was their number 1 concern, even above working conditions. The study also concluded that under the current system in which families buy candles, use kerosene lanters, and other non-renewable energy sources, the average family spent about $7,000 US a year on energy-- Rosa believed he could provide safer, renewable energy at a lower cost (Mugica 2004).

Today, this community, and many others throughout Brazil and the rest of the world, operates without basic needs such as fences for grazing, electricity, and running water; these inefficiencies in basic needs have driven people away from the rural communities and towards the over-populated cities and shantytowns on the Brazilian coasts. (Mugica 2004). These communities have been unable to get electrical grids in their areas for several reasons, but most importantly because of the deregulation of government business, which occurred in the 1990's. The deregulation of the energy market caused the energy providers to privatize--the privatized industry has seen little-to-no economic incentive to provide grids in these rural areas, and so these towns to this day go without basic energy and electrical needs.
 * Problem: **

Although the STA is a for-profit corporation, it is most defiantly a form of social entrepreneurship. It is funded through several sources such as: US grants (most notably a $60,000 US grant from the SDF- a Washington DC based non-profit group, other soft & commercial loans, and also has contributed $45,000 of its own funds back into the company's research and development of newer, cheaper, and most importantly efficient technologies (the $45,000 is based on a % of total revenue and increases as the company grows) (Mugica 2004).
 * STA: **

Inside the STA is the TSSFA (noted above), which is the business model for providing low-income houses with low-cost energy solutions. TSSFA "developed a leasing structure whereby customers pay a monthly fee for the use of cost-effective solar energy packages" (Mugica 2004).
 * TSSFA: **

The business model for Rosa's STA & TSSFA is not unlike any other business that is trying to make money. It is looking at a problem and trying to provide a product and service that is affordable to the market, and one that works well. The model works simply: first, there are three different electricity kits that households can purchase starting at $10/month and going up to $24/month, plus an installation fee of $150 which has the option of a 12 month payment plan. The kit provides fluorescent lights, a 12-volt outlet, all the necessary wiring, a large battery, and a solar panel. The installation of these has been outsourced to a local electrician who also sells appliances that fit the 12-volt outlet and has a kiosk for making payments easily. Houses sign a 3-year contract, but can opt out of it anytime if they pay an uninstallation fee. All the materials except for the solar panel, which is imported from the US, are Brazilian made products (Mugica 2004).
 * Business Model: **

The STA/TSSFA energy solutions that the organizations have provided come with some risks and many rewards: //**Risks:**// 1. The organizations are very small up to this point, and have employed a small number of dedicated workers. To expand, they will need to find loyal and trustworthy workers in the areas, which may be hard to do. 2. Even though the organizations focus on alternatives to on-grid energy providers, success will only been accomplished with the expansion of the on-grid energy providers, who have yet to seen an economic reason for development. 3. The STA is exposed to default risk on their loans. Credit checks are done before any loans are taken, but if the company fails, they will have to default on the loans. 4. There is a currency risk is importing the solar panels from the US, and if inflation occurs, TSSFA will not be able to provide the kits at a cost that is reasonable (Mugica 2004). //**Rewards/Opportunities:**// Although there are a few risks to this venture, the rewards greatly outnumber them: 1. There are over 2 billion people world-wide that do not meet the basic energy needs, and out of that population, about half would be able to afford the kits at their current prices, which is a very large market and one that can see real economic opportunity for other social entrepreneurship businesses that are both for-profit and non-profit. 2. The solar energy kits provide great social impacts on the communities, such as: better living conditions, economic prosperity, and less migration to the already over-populated urban regions throughout Brazil; as well as environmental impacts such as: the saving of 9 million liters of kerosene, 4.6 million kilos of petroleum, and 46.6 million wax candles, and there will be no problems of disposal control of the used batteries and other hazardous materials because they are rented and returned to the TSSFA, who can safely dispose and reuse them. Opportunities also come from the solar kits, and have lead to other non-profit organizations, such as the Solar Energy Initiative (Stanford University), which is developing newer, more cost-effective energy technology such as LED lights instead of the fluorescent bulbs. If successful, these new technologies will reduce the size of the solar panels, which leads to a reduction in the price. Most importantly, the reduction in price, and the increase in households and ranches using this technology is bringing economic development to the regions in Brazil (Mugica 2004).
 * Opportunities & Risks: **

Besides the social and environmental positive impacts that this social entrepreneurship provides, the TSSFA project has also shed light on many lessons to be learned by all social entrepreneurship programs. The importance of understanding the local markets, communities, and politics are crucial in finding solutions that work in the long run. Also, perseverance and patience are key to a social entrepreneurship business because although the community may be hesitant at first, when they see that they business is in it for the long run and cares about their work, they are more likely to jump on board, and thus success is more likely to be seen. Most importantly is the point that: //serving the low-income market does not equal reducing costs by providing less-- the key to success is to provide more services to meet more needs, and cost-efficiency is at the heart.// "An entrepreneur thinks in terms of results and in terms of profits. A social entrepreneur seeks results that will change people's lives simply and quickly, and the profit we seek is sustainable human and economic development" - Fabio Rosa.
 * Key Lessons: **

media type="youtube" key="rPGBgLW2uJ4?fs=1" height="385" width="480" Watch at 4:23 to see a Solar Electricity Kit in a home in Brazil. Also feel free to watch the additional videos about the Brazilian case: Video 1. [|The New Heroes 1/3] Video 3. [|The New Heroes 3/3]
 * Video: **

= 2. Case Study: SELCO Solar Light - India =

Dr. H Harish Hande is the Managing Director and co-founder, along with Neville Williams, of Selco Solar-India. Dr. Hande earned his undergraduate degree in Energy Engineering from the Indian Institute of Technology and his Doctorate from the University of Massachusetts, specializing in solar energy (Schwab). Dr. Hande first received his inspiration while visiting the Dominican Republic. He saw areas of worse poverty than that of India using solar energy. He then began writing his doctorate thesis on solar electrification in rural areas, primarily India and the Dominican Republic (Schwab).
 * Who: **

Selco Solar is a sustainable social enterprise established in 1995 with the goal of providing sustainable energy to low income households and businesses. About 57% of India does not have electricity. Selco set out to dispel three myths associated with sustainable energy (Selco). 1) Poor people cannot afford sustainable technologies 2) Poor people cannot maintain sustatainable technologies 3) Social ventures cannot be run as commercial entities
 * Backgroud: **

Selco offers its customers a complete package, comprised of three key features. First, each Selco package is tweaked to best serve the needs of its users. Selco provides the same quality of services and products regardless of one’s economic background. By doing this Selco can customize specialized products to the individual regardless of the size of the order. For example, Selco has created the largest solar water heating system, consisting of 2,000,000 liters, for a single client (Selco).
 * Service &Package: **

Second, Selco provides a complete installation and an after-sales service. Selco has set up 21 regional service centers in Karnataka and Gujarat, India (Selco). These service centers allow for quick maintenance and service and employee over 140 people.

Third, Selco will create a financial package through grameena banks, commercial banks or micro finance institutions that will best suite the financial constraints of the customer.

Selco Solar offers wide variety solar systems. They pride themselves on being able to customize any system to fit the customer’s needs, big or small. Selco’s primary business is the sale of photovoltaic cells. These cells create energy directly from sunlight and can be used for water pumping, communications, entertainment and small business appliances. They can be used to light an individual house, a place of business or even a hospital. Selco also sells a variety of streetlights used from lighting gardens to roads. For example, a standard household four light system can cost up to US$ 380 (Schwab). This payment can be made with a small down payment and then monthly payments of $6-8 over five years. The benefits of using solar power as a home lighting source include no blackouts, reliable power when required, and easy financing.
 * Products: **

Selco offers a water heater system. These systems heat water by thinning it a circulating over a conductor that is warmed by radiation from the sun. Water temperature is assured to be 60 degrees and the system can be upgraded to assure at least 80 degree (Selco). There is no cost to operate these systems once they are installed. Systems generally come in sizes from 100 to 500 liter systems; however, anything can be customized, and Selco holds the record for largest water heater system at 2,000,000 liters (Selco).

In 2008 Selco began selling a cook stove. The cook stove is roughly 40% more efficient and emits 70% to 80% less smoke than the traditional cook stove (Selco). These systems were designed to reduce indoor air pollution and improve the quality of life in rural India.

When Selco first started the banking systems did not have a portfolio for solar energy. Selco was largely responsible for convincing these banks to finance sustainable energy systems for the poor. By creating affordable systems Selco was able to work with banks to develop financial solutions that match the cash flow of the customers. The normal interest rates faced by the people of India are being subsidized by the Government if India, Ministry of Non-Conventional Energy Source (Renewableenergyworld). The Canara Bank, for example, is offering loans for water heaters of 2% for individual households, 3% for institutions (churches, hospitals) and, 5% for commercial businesses (Renewableenergyworld). Banks will generally finance about 85% of the project cost over a loan period of 5 years.
 * <span style="font-family: Arial,Helvetica,sans-serif; font-size: 120%;">Financing: **

<span style="font-family: Arial,Helvetica,sans-serif;">So far the young company has been able to make a large impact in the rural communities in India. Selco has provided over 100,000+ solar home lighting systems. These home systems largely consist of photovoltaic (PV) solar cells and are the main source of business for Selco. These systems have allowed for an increase in productivity throughout rural India. Individuals can run their businesses with a reliable sustainable energy system that is not based on fossil fuels allowing for increased work hours. These simple innovations have been responsible for an increased quality of life in low-income households.
 * Impact: **

=<span style="color: #008000; font-family: Arial,Helvetica,sans-serif;">3. Case Study: Vladimir Delagneau and Technosol SA <span style="font-family: Arial,Helvetica,sans-serif;"> =

<span style="font-family: Arial,Helvetica,sans-serif;">//__**Who**:__//Vladimir Delagneau is the founder and operator of Technosol, a Nicaragaun company tackling the challenge of bringing electricity to rural communities all over Nicaragua and El Salvador. His passion for new energy thinking started when he was forced to leave school and join the military. When he was working as a radio communications officer, he saw the very people effected by a poor electricity grid: People living without basic comforts like lighting, refrigertion for food, and radio. After <span style="font-family: Arial,Helvetica,sans-serif;">his experience in the armed forces, Vladamir was granted a scholarship to study energy technologies in Germany. In 1998 he returned to Nicaragua and started Technosol with the intention of solving the rural energy problem in Nicaragua. (Schwab Foundation, 2010)

//__<span style="font-family: Arial,Helvetica,sans-serif;">**Background**: __//<span style="font-family: Arial,Helvetica,sans-serif;"> While 45% of Nicaraguans live in the city and have regular access to electricity, the other 55% of the country lives in small rural communities with limited or no access. 74% of all rural citizens do not have access to electricity. This inculdes small hospitals, schools, buisnesses, and of course homes.(Ashden Awards Case Study, 2010) Modernizing these local communities has not been pursued by big companies because of the relatively low profit that would come with expanding the grid and the reduced payment ability of most rural inhabitants. (Schwab Foundation, 2010)

__//<span style="font-family: Arial,Helvetica,sans-serif;">**Technosol**: //__<span style="font-family: Arial,Helvetica,sans-serif;"> Technosol was established in 1998 by Delagneau as his means for helping the rural nicaraguan community. Technosol offers cheap and easy solutions to lighting, refrigeration, and water pumping systems for rural populations. Technosol has 17 branches across Nicaragua which help to maximize efforts in storage, distribution, and customer service. The rapid expansion of Technosol has led them to reach many communities all over Nicaragua. Today Technosol has installed more than 50,000 solar units (Schwab Foundation, 2010). Technosol has solar solutions that start as low as $250 and go up to $2500. Because of the poor economic state of the area, Technosol works closely with microfinance companies capable of making sure their customers are on an easy payment plan that fits their needs. About half of Technosol customers are private businesses and homes, while the other half are comprised of government contracts for things like hospitals and schools as well as contracts from NGO's such as the World Bank (Ashden Awards, 2010).

__//<span style="font-family: Arial,Helvetica,sans-serif;">**Benefits**: //__<span style="font-family: Arial,Helvetica,sans-serif;"> According to The Ashden Awards Foundation these are just some of the benefits from Technosol that help over 200,000 people: (Ashden Awards Case Study, 2010)
 * <span style="font-family: Arial,Helvetica,sans-serif;">Health centers can remain open for 24 hoursmedia type="youtube" key="B5R1Oe6hktw?fs=1" height="307" width="384" align="right"
 * Health centers can properly refrigerate vaccines and medicines
 * Families no longer suffer from the indoor air pollution of kerosene Students can do homework by light during the nightime
 * Farmers can use electric fences and water pumps to help production
 * Shops earn extra income by extending hours of operation
 * 26,000 tons of Carbod Dioxide emissions per year saved
 * Internet and television for students

= 4. Case Study: Light Up the World Foundation =

<span style="font-family: Arial,Helvetica,sans-serif;">Light Up the World Foundation (LUTWF), partnering with the Stanford Graduate School of Business, is currently looking for and testing alternatives to fluorescent light bulbs in many of the electricity packages that are being sold to the low-income households in many of the case studies above. LUTWF is a non-profit, Canadian based organization that has partnered with many other organization and schools throughout the United States in an effort to minimize costs while increasing efficiency and safety of products sold to the numerous households in such countries as: Brazil, India, Mexico, and so on... (Snyder 2003).
 * <span style="font-family: Arial,Helvetica,sans-serif; font-size: 120%;">Who: **

<span style="font-family: arial,helvetica,sans-serif;">**<span style="font-family: Arial,Helvetica,sans-serif; font-size: 16px;">Products: ** <span style="font-family: Arial,Helvetica,sans-serif;">While the current options include lights made out of fluorescent bulbs may be safer than kerosene or other previously used, non-reusable materials, LED bubls are, "inexpensive to manufacture and maintain, durable, and most significantly, ultra-efficient...LED's, or light-emitting diodes, produce nearly 50 times the amount of useful light per dollar produced by a conventional bulb and 200 times more useful light than a kerosene lamp" making them a much better, and cheaper alternative (Snyder 2003). This decrease in costs and increase in efficiency means that dealers who are selling their electricity and lighting kits to low-income households will be able to sell at a more affordable price and to a larger population (Snyder 2003).

=﻿Works Cited:=

<span style="font-family: Arial,Helvetica,sans-serif; margin: 0in 0in 10pt;">Ashden Awards. (2010). //Case study summary: Technosol//. London: The Ashden awards Foundation. (This was a case study published by the Ashden Awards foundation when they gave an award to Technosol for their efforts in social entreneurship)

<span style="font-family: Arial,Helvetica,sans-serif; margin: 0in 0in 10pt;">Ashden Awards. (2010, October). Power From the sun. Retrieved October 2010, from The Ashden Awards for Sustainable Energy: []

<span style="font-family: Arial,Helvetica,sans-serif;">"Fábio Luiz De Oliveira Rosa | Ashoka.org." Front Page | Ashoka.org. Web. 21 Oct. 2010. [].

<span style="font-family: Arial,Helvetica,sans-serif;">Harish, Hande. "India: Financing Solar Water Heaters | Renewable Energy News Article." Renewable Energy World - Renewable Energy News, Jobs, Events, Companies, and More. 10 Feb. 2006. Web. 22 Oct. 2010. []. <span style="font-family: Arial,Helvetica,sans-serif;">This article talked about government subsidizing for loans. It went into detail about water heaters and how they can be typically financed.

<span style="font-family: Arial,Helvetica,sans-serif;">Index | Selco Solar India, a Social Enterprise, Provides Sustainable Energy Solutions, and Services to Under-served Households and Businesses. 2008. Web. 22 Oct. 2010. []. <span style="font-family: Arial,Helvetica,sans-serif;">This source was primarily used to find out detailed information about the company, Selco. Basic products, impacts, and company history were taken from this website.

<span style="font-family: Arial,Helvetica,sans-serif;">Mugica, Yerina. "Distributed Solar Energy in Brazil: Fabio Rosa's Approach to Social Entrepreneurship." Ed. Ted London. UNC Kenan-Flagler Business School (2004): 1-27. Google Scholar. 2004. Web. 21 Oct. 2010.

<span style="font-family: Arial,Helvetica,sans-serif;">"The New Heroes . Meet the New Heroes . Fabio Rosa." PBS. 2005. Web. 21 Oct. 2010. [].

<span style="font-family: Arial,Helvetica,sans-serif; margin: 0in 0in 10pt;">Schwab Foundation. (2010, October). Vladimir Delagneau Barquero. Retrieved October 2010, from The Schwab Foundation for Social Entrepreneurship: The voice of social innovation : [] <span style="font-family: Arial,Helvetica,sans-serif; margin: 0in 0in 10pt;">(The Schwab foundation is an organization that recognizes active social entrepreneurs. The information gained from this site was used in our case studies.)

<span style="font-family: Arial,Helvetica,sans-serif;">"SELCO Solar Light." Schwab Foundation for Social Entrepreneurship - Home. 2007. Web. 22 Oct. 2010. []. <span style="font-family: Arial,Helvetica,sans-serif;">The source was used to learn basic information about Selco. Information about the co-founder Hande Harish was found on this site. A few basic examples of product and pricing were listed on this page. This site also gave information about what Selco was currently doing.

<span style="font-family: Arial,Helvetica,sans-serif;">Snyder, Bill. "Honors & Awards: Top Stories: News: Stanford GSB." Stanford Graduate School of Business. 3 June 2003. Web. 21 Oct. 2010. [].