Mexican Innovation Connecting Off-The-Grid Rural Farmers To The World
Millions of rural Mexican citizens lack access to reliable electricity. But Manuel Wiechers, founder of Iluméxico, is helping farmers off the national energy grid turn on the lights.
Mexico, a top-10 oil producer, this year announced plans to generate 35% of its power from clean renewable energy sources by 2026. This ambitious government plan actually makes a lot of sense: solar radiation is, on average, about 60% higher in Mexico than in Germany - the world's solar market leader. And while the country is hydro-heavy, wind and solar energy currently make up less than 1.5% of the country's power output.
Clean energy—particularly solar energy—is a huge business opportunity in Mexico, and in the next decade, Mexico plans to produce enough plants to “increase the country's solar capacity more than fivefold,” according to estimates from the Energy Ministry. While that's welcome news for the 97% of consumers connected to the national grid, who are sure to see utility bills drop, there are still three million Mexicans that do not have reliable access to electricity.
Who are these three million? “We're talking communities that have limited or no access to basic services—water, energy, sewage, and even roads,” Manuel Wiechers said. “Definitely the most remote villages in Mexico... communities already targeted as non-viable for grid extension.”
Wiechers, 26, is the co-founder and director of operations at Iluméxico, a social enterprise that connects rural populations in Mexico to the rest of the world. Wiechers, also an Ashoka Fellow, would tell you he doesn't sell energy, but uses energy as a platform for development: “Energy is a gradual need.”
Half of Mexico's rural population, the customers Iluméxico's is trying to reach, receives financial support from the government. A majority are indigenous (59%), the whole is mostly primary school educated and literate. These farmers make between $150 and $200 (American) each month, but that only goes so far with three or four mouths to feed at home. Most women (78%) in these communities are unemployed, and families typically live in wooden homes sealed with tile or thatched palm leaf roofs. Food is cooked over firewood.
Their energy bills can be trouble. Each month, the majority of farmers spend $15 on candles and kerosene to fuel their lamps, while a few fork over cash for more expensive gas generators. The dollars add up, totaling more than 10% of their monthly income, and that doesn't include wasted opportunity costs: 86% of farmers in rural Mexico walk almost two hours to central hubs every week for supplies.
“One of the first exercises we do for families is to calculate spendings they have on energy to identify the economic benefits of solar power,” Wiechers said. “They can clearly see they can afford the system and buy the solution.”
Wiechers is selling 15-watt home solar kits that can power two LED light bulbs and a mobile phone—a quarter of the population own one. That might not sound like much, but it's a start, and the basic Iluméxico package. Upgraded 20-, 60-, 90-, and 130-watt systems are available, the larger of which can power a handful of CFL bulbs, plus a TV, radio, computer, or other appliance.
"People actually pick which one they can afford and how they can afford it," Wiechers said. “Since most people work in the fields, in agriculture, they usually have seasonal income. We're trying to be really flexible in the sense that if you know that October and November are going to be your good months, then there you can pay us a higher fee and the rest of the months you can pay us a lower fee.”
Most families pay $50 up front for solar kits, then follow a 10-month payment plan. “When the situation merits,” Wiechers said, Iluméxico works with families to have the government cover the down payment for solar systems.
“With the savings they get from having solar power, about $10 per month, it's not been that hard for them to pay,” Wiechers said. “And we have actually worked with the poorest municipality in the country, which is in Guerrero, and had really good results there as well.”
Wiechers isn't the first one to try to bring solar energy to the masses. In the 1980s, President Carlos Salinas de Golari developed Solidaridad, a poverty alleviation program designed around conditional cash transfers that also aimed to install solar panels in rural communities. It failed. Batteries died after a few months and maintenance issues were rarely resolved, issues that still slow solar adoption today.
Iluméxico recognized this challenge as an area of opportunity. “What we're doing is implementing a rescue program for people who already have a solar system—you don't have to purchase one from us,” Wiechers said.
“In community centers, where people go to sell products, get access to services, or coin conditional cash transfers, Iluméxico takes care of repairs, replaces parts, and offers technical advice for consumers with warranty plans.”
In addition to the solar tech, and the financial education Iluméxico provides, delivered through partnerships with local banks, rural Mexican villagers are given a crash course in environmental awareness: “They have other priorities, but we feel people should see the positive impact their system can have on the environment.”
Iluméxico will close the year with five branches and more than 2,500 participating households across central, south and southeast Mexico. Wiechers plans to open 10 additional branches in 2014 and is optimistic that, by 2018, Iluméxico will be able to operate 50 solar branches and reach 50,000 households.
“It's difficult to find organizations that are working at this scale,” said Ashoka Mexico's Georgina Aldana. “It's not just the solar panels. They're helping communities realize their boundaries are not established, they can push those boundaries. That's what we find innovative in Manuel's project."
Manuel Wiechers is one of seven finalists in the Unilever Sustainable Living Young Entrepreneurs Awards, who will be featured on Virgin.com in the coming weeks. Learn about the other finalists at changemakers.com/sustliving, where you can also share your own project.