SELCO INDIA - Linking Energy Services to Better Quality of Life
This entry has been selected as a finalist in the
How to Create Market-Based Strategies that Benefit Low-Income Communities competition.
SELCO believes that modern energy services if provided in a sustainable way can uplift the quality of life among the underserved: our primary clientele. One of our main energy services is providing reliable and safe electricity using solar power. Electricity is then used to power lights, or/and small motors for income generating activities. The safe and reliable solar lights have led to better light conditions for children to study, thus leading to better education. Earlier while cooking people used to inhale the dangerous smoke of the kerosene lamps, and that has now been replaced by clean solar lights. Solar lights have also led to increased working hours thus enabling the households to do income generating work in the evenings. For example people do tailoring or weave baskets. Lights have also increased business for local petty shops and road side eateries. On the social side, bright lights at home have had an effect on the general morale, benefits that cannot be easily measured in terms of economics. In some households, SHS has also replaced diesel generators, another polluting agent in the local environment. SELCO?s work also has created a tremendous awareness among the locals and some policy makers. SELCO INDIA has pioneered numerous innovations (both financial and technical) in order to link modern energy services to better quality of life.
About You
Location
Project Street Address
Project City
Project Province/State
Project Postal/Zip Code
Project Country
Your idea
Sector of activity
Energy
Other sector of activity
On the mosaic diagram, which of these factors is the primary focus of your work?
Factor
Poor understanding of the human and social capitals of low income communities
Principle
Design products and services that tap into the wealth of poor
Name Your Project
SELCO INDIA - Linking Energy Services to Better Quality of Life
Describe Your Idea
SELCO believes that modern energy services if provided in a sustainable way can uplift the quality of life among the underserved: our primary clientele. One of our main energy services is providing reliable and safe electricity using solar power. Electricity is then used to power lights, or/and small motors for income generating activities. The safe and reliable solar lights have led to better light conditions for children to study, thus leading to better education. Earlier while cooking people used to inhale the dangerous smoke of the kerosene lamps, and that has now been replaced by clean solar lights. Solar lights have also led to increased working hours thus enabling the households to do income generating work in the evenings. For example people do tailoring or weave baskets. Lights have also increased business for local petty shops and road side eateries. On the social side, bright lights at home have had an effect on the general morale, benefits that cannot be easily measured in terms of economics. In some households, SHS has also replaced diesel generators, another polluting agent in the local environment. SELCO?s work also has created a tremendous awareness among the locals and some policy makers. SELCO INDIA has pioneered numerous innovations (both financial and technical) in order to link modern energy services to better quality of life.
Innovation
Description of your products or services:
SELCO believes that modern energy services if provided in a sustainable way can uplift the quality of life among the underserved: our primary clientele. One of our main energy services is providing reliable and safe electricity using solar power. Electricity is then used to power lights, or/and small motors for income generating activities. The safe and reliable solar lights have led to better light conditions for children to study, thus leading to better education. Earlier while cooking people used to inhale the dangerous smoke of the kerosene lamps, and that has now been replaced by clean solar lights. Solar lights have also led to increased working hours thus enabling the households to do income generating work in the evenings. For example people do tailoring or weave baskets. Lights have also increased business for local petty shops and road side eateries. On the social side, bright lights at home have had an effect on the general morale, benefits that cannot be easily measured in terms of economics. In some households, SHS has also replaced diesel generators, another polluting agent in the local environment. SELCO?s work also has created a tremendous awareness among the locals and some policy makers. SELCO INDIA has pioneered numerous innovations (both financial and technical) in order to link modern energy services to better quality of life.
Description of the operational model:
SELCO INDIA is solar energy services company that sell, installs and services solar lighting systems to the underserved in rural India. SELCO is headquartered in Bangalore, India and has 25 solar service centers offices in the states of Karnataka, Andhra Pradesh and Kerala. With a staff of more than 150, SELCO has installed more than 45,000 solar lighting systems. SELCO has also partnered with more than 12 local financial institutions. SELCO has ensured that its clients can get door-step service and door-step financing: two key components for the successful dissemination of modern energy services in the underserved areas. SELCO?s primary mission is to uplift the quality of life among the underserved and also create enabling conditions for income generating activities. Solar lighting has led to better education, smokeless environment and longer working hours; thus uplifting the quality of life of the beneficiaries. Most of the residents in the area were underserved and belonged to low income groups. The socio-economics of the target group prevalent in the its area of operations motivated SELCO to create a local service network and partner with local financing institutions to create many innovative financing models.
Impact
Description of the financial model:
SELCO has innovative numerous models (both financial and technical) in order to reach the underserved communities in its area of operations. The financial models have been developed in according to the existing as well as the future cash flows of the end-user. The cash-flows after acquiring the energy service is dependent either on the savings (after substituting costlier fuels) or from extra earnings (because of availability of the energy service); In many a case, reliability and safety issues are also considered while evaluating the value of the energy service. SELCO also piggy backs on many networks of regular financial institutions, micro-finance institutions, co- operatives and SELF-HELP groups. The financial models vary from collection periods to refinancing of down-payments; very site specific models. SELCO leverages most from the financial resources of the above mentioned group of financial institutions, for its end-users. SELCO, itself is financed by social ethical investors and sustains itself by providing the energy services. SELCO for the last 3 years has been profitable.
Client fees represent this approximate percentage of operational budget:
90%
Key operational partnership:
SELCO has built strong partnerships with commercial financial institutions and micro-finance institutions: key to success for creating door-step site specific flexible financing for the underserved. It also has partners in form of like minded NGOs that believe in creating sustainable linkages at all level. Social objectives can be met in a sustainable way provided all linkages in the development chain are economically sustainable: a strong component in the partnerships of SELCO INDIA. Some of the major challenges that SELCO INDIA faces is convincing the partners to look at the complete chain of developments and not only at certain links in the chain. The other challenge is to inculcate the ?out-of-the-box? thinking: very key to create innovations at the grassroots level. The most important partnership SELCO INDIA has is with its own employees and its end-users: both are key to any successful innovation.
Current outreach:
We are at the Scaling Up stage. SELCO INDIA is 10 years old now. Most of its initial years were spent in creating the basic linkages. Now most of its strategies revolve on innovations. Innovations in financing, value-products, marketing and operational (also a combination of the mentioned factors); Lot of its financial resources are spent in these innovations ? that are necessary for reaching out to the underserved.
How many clients have benefited from your product/service in total? Over the last year?:
SELCO INDIA is 10 years old now. Most of its initial years were spent in creating the basic linkages. Now most of its strategies revolve on innovations. Innovations in financing, value-products, marketing and operational (also a combination of the mentioned factors); Lot of its financial resources are spent in these innovations ? that are necessary for reaching out to the underserved. SELCO INDIA has till date reached out to 225,000 beneficiaries and in the last year has served 25,000 beneficiaries.
What percentage of your clients is below the poverty line ($2 per day)?
40% Primary mission of SELCO INDIA is to create innovations in a way that the energy services targets clients who live below the poverty line. The percentage of SELCO INDIA?s clientele under this category would increase year by year, because of the innovations.
What is the order of magnitude of the potential demand for your products or services? Which other low-income groups, countries or regions could benefit from it? Try to quantify (number of clients, market size in currency).
The potential is very huge around the world. To convert the potential to market will depend on the innovations. It is very difficult to quantify, because in India itself there are 500 million people who do not have access to basic energy services: therefore the potential is huge and will require many more SELCOs.
Scale-up strategy:
How many low-income individuals do you plan to benefit in three years from now? How are you planning to scale up or replicate your solution? What are the major constraints to scale up?
SELCO INDIA plans to reach out to atleast 100,000 individuals in the next 3 years. The plan is to increase the number of micro-finance partners in the areas of its operations. One of the primary barriers would be to attract financial resources for innovations (financial and technical); Successful innovations can help in faster scale-up. The risk is some of the innovations might fail, leading to pressure on the existing financial resources of the company: this will be a primary barrier to scale-up.
Which specific areas - and why - in your field would benefit most from investment by corporations, foundations, and other investors:
Investments from foundations and socially ethical investors will help SELCO in scaling up and replicating its model in other parts of India and the world. Financial resources from foundations would help SELCO experiment with more (financial and technical) innovations at the field level. Investments from social ethical investors would help SELCO to scale up using the successful models. Financial resources could be used in many ways, for placing guarantees, re-financing margin money, providing low-cost working capital to rural entrepreneurs etc. Many of the strategies have been successfully implemented and replicated by SELCO, but many are still to be tried out. These strategies could be replicated not only in terms of geographical area but also be used for promoting other energy services like biogas, bio-mass, pico-hydro etc.
This Entry is about (Issues)
Sustainability
The organization: How does the initiative fit with your overall organization's strategic goals and priorities? How did the initiative start?
SELCO INDIA is a company that believes in achieving social objectives in a financially sustainable way. The company was founded in 1994, with a primary mission to provided environmentally friendly solar systems to the un- electrified rural households in India. Over the last 4 years, SELCO INDIA has strategically focused on all linkages of the development chain and has tried to strengthen the weak link, so that modern energy services (like solar) could be provided in a sustainable way. Its end-aim is to uplift the quality of life by making energy services accessible and affordable to the underserved.
Organization's legal status:
Company
Number of Employees:
150
 | 407 weeks ago SELCO INDIA - Linking Energy Services to Better Quality of Life has been chosen as a finalist in How to Create Market-Based Strategies that Benefit Low-Income Communities. |
