Testing Approaches via Coordinated, Communication, Education, and Sustaining-Services (ACCESS) to Rural Solar

Testing Approaches via Coordinated, Communication, Education, and Sustaining-Services (ACCESS) to Rural Solar

Uganda
Organization type: 
nonprofit/ngo/citizen sector
Project Summary
Elevator Pitch

Concise Summary: Help us pitch this solution! Provide an explanation within 3-4 short sentences.

Out of an estimated 6 million Ugandan households, 90% do not have electricity, and are forced to use unhealthy, expensive kerosene lamps and candles for home lighting. Furthermore, homes with electricity suffer unreliable and inconsistent supply. It is also extremely expensive, and sometimes technically infeasible to provide electrification to the many scattered rural households. Through our Lighting Rural Uganda with Solar (LRUS) project, we are revolutionising the Ugandan market by introducing ultra-affordable micro-power solar LED lanterns through efficient sales networks that are finally reaching the rural consumers in need. In partnership with USA-based manufacturer Greenlight Planet (www.greenlightplanet.com), we have made a game-changing introduction of a solar lamp in Uganda.

About Project

Problem: What problem is this project trying to address?

The project is based on an entrepreneurial model of energy service delivery, which has been developed and successfully piloted across villages in Kalangala district in Uganda. Through this model, VCCs are mobilized for the delivery of energy services in remote villages. These services are meant not only for household use, but also for small enterprises such as shops, evening markets, and private clinics, and various cottage industries. The model is designed to benefit both the user and the supplier of services. The project also facilitates the establishment of distribution centers in partnership with grassroots level VCC partners by identifying, and training of VCC entrepreneurs; creating awareness among communities about the use and upkeep of lanterns; and developing livelihood activities through the solar lighting and energy business. The entrepreneur, in addition to providing the facility for setting up the center, will also contribute equity in cash and pay for the solar lanterns. Our primary target segment is the ‘Kerosene Replacer’ – a poor household with no alternative to Kerosene lighting, and has an annual income of typically $300 - $600. The family lives live in a mud hut or concrete home with two rooms in which the family eats, and sleeps. Our secondary target are the ‘Light Upgrader’ Segment; having a higher disposable income, with modern grid connections either through a generator and hydro power , but suffering from an unreliable supply, with frequent power outages in evenings and at night.

Solution: What is the proposed solution? Please be specific!

The project commercial partnership between an innovative new manufacturer(Greenlight planet), an eager VCC distributor, and an established grass‐roots NGO mobilizer and coordinator (WIRDA/LRUS) is allowing a widespread distribution of ultra‐affordable solar‐LED lanterns among poor households who have no hope of ever accessing on grid electricity. The innovative product being introduced into Uganda for the first time, the SolarFlare, was designed at the University of Illinois (home of Professor Nick Holonyak, the inventor of the LED) after thousands of hours of on‐the‐ground research and development in rural India. Already piloted on a small scale in the Ugandan least electrified rural Island of Wakiso district, the project is conceived on the premises that addressing the energy needs of the off–grid households requires innovative service delivery models that increase access to modern energy on a sustainable basis, while at the same time remaining affordable to the vast majority. This benefits of this model are threefold: moving away from the donation style of simply giving products away for free will give the villagers a greater sense of ownership while maintaining dignity; establishing credit amongst the villagers will enable them to participate in similar village empowerment programs in the future; and by recovering costs, the VCC sector can replace philanthropies as the source of funding, making the projects sustainable and scalable.
Impact: How does it Work

Example: Walk us through a specific example(s) of how this solution makes a difference; include its primary activities.

With initial USAID funding, the project objective over a 12-month period is to test a variety of marketing approaches that include distribution of solar lanterns via i) village credit cooperatives (VCCs) ; ii) Retail Chain sales; iii) and applying both VCC and retail chains , all aimed at promoting access, demand, and utilization of the solar lanterns among 3000 rural households. Project activities include ,project set –up, community mobilization and sensitization, selection of Access retails, conducting a Baseline survey, selection of comparison sites , training of VCC retails, development of SMS reminders using FrontlineSMS , a text messaging system to reach VCC groups and as well prospective clients , project launch including development and distribution of IEC materials, Stakeholder mobilization and involvement in the provision of portable solar lamps to school children and their families in rural areas who do not have access to the electrical grid with stakeholder are serving as contact points with the affected families in order to guarantee the success of the project. The on going project activity involves project monitoring, support supervision and evaluation, which will take us through September 2011 , ready for the project impact evaluation .
About You
Organization:
Wakiso Integrated Rural Development Association(WIRDA)
About You
First Name

Kintu

Last Name

Michael

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About Your Organization
Organization Name

Wakiso Integrated Rural Development Association(WIRDA)

Organization Country
Country where this project is creating social impact
How long has your organization been operating?

More than 5 years

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Innovation
What stage is your project in?

Operating for less than a year

Share the story of the founder and what inspired the founder to start this project

Michael kintu holds B.Sc. degree in Economics and M.A. degree in Economic Policy and Planning from Makerere University in Uganda, and has just submitted his PhD thesis on Utilization Patterns of Education, Health, Water and Energy facilities under Uganda’s Decentralized Governance. Michael is a lecturer in Development Economics at Nkumba University at Entebbe, Uganda. As Grants Manager with the Uganda Virus Research Institute (1993-2002) , Michael managed a variety of Research grants from the NIH, Rockefeller, USAID, CDC and World Bank. As a Project Manager of World Bank funded integrated farmers ‘s project from June 2003 to August 2008, Michael managed a complex program worthy US$ 1.5million to US$1.7 million annual budget which included several developmental cross cutting issues. In 2009 Michael was touched by a story in a rural Ugandan village, when told how 3-year old sleepy John entered the bedroom, and accidentally dropped a kerosene lamp on the mattress thereby lighting up the whole grass thatched household. Silvia, the mother who had gone to visit her in-laws nearby, rushed home after her other three children cried out as the fire engulfed the house. Wailing, Silvia entered the burning house to rescue her two children Davis, 5 and 3-three year Ronald, who had been sleeping. Shortly afterwards, their voices faded. Their daddy, Ronald senior arrived home too late to save his wife and children. If the household were using solar lamps , Silvia, Davis and Ronald junior would not have perished. This story inspired the founder to start this project

Social Impact
Please describe how your project has been successful and how that success is measured

The Project Solar lamp is contributing to the development of economic activities and wealth generation by allowing students to study after dark, shops to stay open later, off-grid rural midwives to help vulnerable mothers deliver, adults to engage in wealth-generation activities, and Kerosene and candle light toxic smoke, inferior luminescence and present burning risk to become history.

For any subsistence‐marketplace product, one key to adoption is simple: off‐the‐shelf price to the consumer. Solar lamps sold in Uganda cost US$ 50 upwards. The solar lamp we have successfully introduced in Uganda moves off the shelf between $12 and $15, depending on the distribution chain, a price point that has simply not existed in Uganda until now.

The primary outcome of importance are to ;i) reduce by 75% the kerosene fuel budget , ii) reduce by 75% the kerosene lantern related fire accidents ; iii) reduce by 75% the prevalence of students not studying after dark ; iv) reduce by 50% poverty associated with not extending economically productive business hours after dark due to lack of light.
Crucial quantitative measurements include: Number of lanterns sold, amount of kerosene (or other fuel) used pre/post purchase, number of hours per night of fuel based light derived prior to purchase, hours of LED light used post purchase, hours (pre-and post purchase) of income generating or educational activities per night, basic demographic information about each customer (income, # of dependents, etc.)

How many people have been impacted by your project?

1,001- 10,000

How many people could be impacted by your project in the next three years?

More than 10,000

How will your project evolve over the next three years?

We will integrate the current project strategy with two other innovative approaches that include; a) utilizing and building upon the strength of the church community relationship in Uganda’s rural communities and;b) using existing school infrastructure as basis of a country wide program to convince school children and their parents of the usefulness and cost effectiveness of the solar lamps. Working through the social network of churches will ensure a high repayment rates and effective advertising. Making information available through schools, as well as introduction of micro credits, will aid in making this project viable .The long-term relationship between teachers and school children will ensure correct usage of lanterns and payback of the micro credits on schedule. 

Sustainability
What barriers might hinder the success of your project and how do you plan to overcome them?

Potential risks include the likelihood that poorly engineered copycat products will be introduced, which will spoil consumer markets. Another potential threat will be entry of new firms to compete for the same customers and resources. This rivalry may intensify if the firms have similar market share, leading to a struggle for market leadership. There is also a danger of inventory stock outs leading to the adverse consequences of stock outs and long-run loss of revenue from the shift of customers to more reliable sources of supply.
Warranties and branding are being used to mitigate bad publicity from these inferior products. We are using three strategies (cost leadership, differentiation, and focus) at the business unit level to create a competitive advantage. This strategy is positioning our firm to leverage its strengths and defend against the adverse effects of competition. We are avoiding stock outs by having regularized replenishment of inventory as stock out become eminent.
Another potential barrier which is out of our reach to solve , but again which is a blessing in disguise ,is the problem of the inflation which has reached two digit levels at 16% in Uganda due to the high fuel prices ( One liter of paraffin costs U$1.2) . It is a blessing in the sense that , it is compelling households to scramble for our solar lantern in order to cut down on their fuel budget.

Tell us about your partnerships

Green light Planet’s successful product development and marketing efforts have already been proven in a pilot project on the ground in India. Green light planet’s biggest challenge was in establishing retail chains in Africa to stock and advertise the products. This is Michael’s core competency. Online and phone contacts between Michael and Patrick Walsh (CEO) of Green light Planet started two years ago when Michael came across Patrick’s Green light Planet’s solar flare products across the Internet, and immediately discovered that the Solar Flare product pipeline could provide a suite of quality of life and income generation solutions for the Uganda’s rural poor segment, and could also be sold to a wide audience of existing traders and retailers in Uganda.

The above initial collaborative efforts have lead to completion of a consumer acceptance pilot project. During the pilot project, Green light planet has been the partnership‘s product supplier, while Michael through WIRDA provided a crucial grass-roots link to micro-entrepreneurs in local communities thus, which not only provided an avenue for distribution, but also established levels of contact with individual community sales people that would not otherwise be established. Michael‘s other role during the pilot roles have included collection of quantitative and qualitative data that measured the effects of the SolarFlare’s introduction on quality of life.

Explain your selections

Almost all Ugandan Solar projects are primarily, and almost exclusively implemented on fee for service basis, since the majority of their customers are institutions and/or business focused. However, our project is grassroots based, and pro-poor and therefore allows; a) households to pay with small incremental expenses like they already do for kerosene; b) households not have to worry about product servicing and replacements; c) mark-ups for the delivery networks to allow sustainability and growth.
We are incubating the idea through a micro-credit financing mechanism in community settings by utilizing and building upon the strength of exiting VCCs. Working through VCCs is ensuring mobilization of own-community resources to purchase solar, high repayment rates and effective advertising thus creating a community driven supply chain and reliable market. Community buy-in through sensitization and awareness outreaches is driving the sustainable introduction of solar LED technologies on a commercial basis and at level accessible to average community households.

In every Ugandan community there is some form of VCC structures, and VCC members access services and goods and make payments promptly. The government encourages the formation of SACCOS and fully supports them. There is a Uganda Postal bank, which supports VCC by giving them loans at lower interest rates. As VCC are located in remote rural areas and charge lower interest rates to their members, using them has enabled many people to have solar lanterns.

How do you plan to strengthen your project in the next three years?

We are financing the project through VCC members own capital contribution, which is expected to increase each year thus, providing the necessary capital for growth and expansion of distribution channels. In the first year, annual project net sales/re-investment revenue is expected reach approximately US$ 270,000 based on annual sales of approximately 13,000 solar flare products, increasing to approximately US$ 1.8 million in year two, based on annual sale of approximately 83,000 solar flares.

The project expects to break-even within two years with reasonable profit margins. This will allow growth of sales, and attract loans /investors to scale up project operations.
However, the project will also make an appeal to CoopAFRICA, an affiliate of the International Labor Organization, (ILO) which supports Ugandans SACCOS to create jobs, generate income, and reduce poverty. The project idea resonates well with CoopAFRICA requirements, and a US$ 50,000 grant-funding request has already been submitted to CoopAFRICA for funding consideration.

The project idea also addresses pollution reduction, an area of interest to the Global Environment Facility(GEF) 's Small Grants Programme in Uganda and already a grant proposal request of US$ 50,000 have been submitted to GEF. Additionally, VCCs will be mobilized to utilize the Uganda Government solar subsidy on the equipment, which enables the consumer to only pay up to 70% of the solar system while 30 % is paid by the Uganda government owned rural electrification agency.

Challenges
Which barriers to employment does your innovation address?
Please select up to three in order of relevancy to your project.

PRIMARY

SECONDARY

Lack of efficiency

TERTIARY

Lack of efficiency

Please describe how your innovation specifically tackles the barriers listed above.

The current project solar lamp functions primarily as a home lighting platform. However efforts are underway by the project partner ,Greenlight Planet , to modify the solar lamp so that it has additionally capacity to charge cell phones, portable radios, and other electronic devices, which will make it extremely popular in least electrified regions of Uganda, and more especially with a cell phone charger which will be a considerable value addition for rural consumers.

Are you trying to scale your organization or initiative?
If yes, please check up to three potential pathways in order of relevancy to you.

PRIMARY

SECONDARY

TERTIARY

Please describe which of your growth activities are current or planned for the immediate future.

We are improving the VCCs marketing and sales’ knowledge, skills, performance, their interactions with clients; and updating their skills in implementing supply chain management procedures .We have rolled out a training program that strengthens marketing and sales capacity among VCC and Retail chain outlets. We have developed banners posters, calendars, brochures and leaflets for the general community, and included Incentives such as T-shirts, and caps to help VCC marketing and sales persons “stand out” in their communities. Following the capacity building, selected VCC marketing and sales persons have receive accreditation in form of signs, posters, or stickers that will identify them as accredited outlets.

Do you collaborate with any of the following: (Check all that apply)

If yes, how have these collaborations helped your innovation to succeed?

We have initiated collaboration with the Microfinance Support Center (MSC) of the Uganda Ministry of Finance, which is the premier financier of VCCs in Uganda, and has functional branches in all Ugandan regions. To this end we are working with Uganda Cooperatives Savings and Credit Union Limited (UCSCU), the national apex organization for Savings and Credit Cooperative Societies (SACCOs) in Uganda. UCSCU is providing on-going technical assistance in all aspects of VCCs implementation and management including linking the VCCs to the MSC through our coordination and mobilization efforts.