ONergy - Access to Clean Energy in Rural India

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ONergy - Access to Clean Energy in Rural India

Kolkata, India
a
Organization type: 
hybrid
Project Stage:
Growth
Budget: 
$500,000 - $1 million
Project Summary
Elevator Pitch

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

ONergy is for-profit social enterprise providing decentralized energy solutions to rural households impacting over 50,000 lives since April 2010. We provide reliable and affordable clean energy solutions and execute projects across lighting, cooking and electrification. We build an ecosystem which connects technology, finance and grassroot organizations - to manage the needs, aspirations and resources of rural BoP beneficiaries. ONergy was established in 2009, led by a strong mission to provide solar energy to 1 million lives by 2016. ONergy aims to empower its customer by providing a complete package of product, service and consumer financing through Grameen banks, cooperative societies, commercial banks and micro-finance institutions.

ONergy creates a unique full service distribution infrastructure by establishing Renewable Energy Centers (RECs) and operate through a network of trained rural entrepreneurs and leveraging on existing local networks. The model is sustainable, financially viable, decentralized and scalable. We operate through vertical integration (which provides value throughout the entire chain and eliminate middleman) and horizontal integration (by providing a range of appropriate energy products). Currently ONergy has set up 7 RECs in West Bengal and Orissa.

About Project

Problem: What problem is this project trying to address?

India, a rapidly emerging economy with the world’s second largest population, is facing a surging energy demand. Energy crisis faced nationally and globally has trickle-down effect over the rural areas in India. It is seen that 2/3rd of India - approximately 800 million people- do not have access to reliable and clean energy, such as clean cooking fuel or electricity, which is leading to a crisis in development (access to education, water, health, livelihood generation) and causing environment degradation. East India is among the poorest of India’s states, with the Human Development Index consistently ranking it in the bottom 5. India’s rural BoP or Bottom of Pyramid (considered 114 million rural households) spends 224* billion (US$4.86 billion) per year just to meet their energy needs. These households often pay higher prices for lower-quality goods and services due to lack of options. These masses are characterized by unmet basic needs. The most challenging aspects are lack of ecosystem, purchasing power, lack of knowledge and information about the solar energy and clean technology availability, social and economic infrastructure, poor distribution system and predominance of conventional energy usage. There has been a high failure rate of solar and renewable energy systems in rural areas which has led to a trust deficit. The problem is promoting appropriate technology, lack of ecosystem, financing options and no after-sales service network.

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

ONergy provides a unique full service distribution infrastructure by establishing Renewable Energy Centres (RECs) in partnership with grass-root organizations – NGOs and/or Micro-finance Institutions –in which operate through a network of trained rural entrepreneurs and leveraging on existing local networks. ONergy concentrates on (i) innovation in delivery – through the Renewable Energy Centres which their entire distribution and service network is owned and managed by ONergy helping us reach the last mile. (ii) Innovation in financing - Facilitating consumer financing through partnerships with rural banks, MFIs and also offering pay-as-you-go services. (iii) Innovation in technology - by understanding needs of customers, providing customised solutions & appropriate technologies. It is an ongoing activity, with setting up of the REC being just being the first part to be followed up with capacity building and training activities for Rural Entrepreneur in synergy with Switch ON within the communities. These Rural Entrepreneurs will become a part of the ONergy network and help to create a distribution and technical network in these areas. Upon every sale they make, or technical or other service they provide (including installation, repairs, etc) or stoves they build, they earn a commission or fees from the end user generating livelihood options and link energy to income generation and over all community development.
Impact: How does it Work

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

ONergy aims to facilitate last mile access to clean energy solutions for lighting, cooking and electrification in Rural West Bengal. It aims to create ecosystem which connects technology, finance and grassroot organizations - to manage the needs, aspirations and resources of rural Bottom of the Pyramid (BoP) beneficiaries and address some of the major barriers in large-scale adoption of renewable energy in the rural sector are - lack of innovative distribution methods, strong repair and maintenance servicing locally available, consumer financing to cover the high upfront capital cost of technology, and inability to link renewable energy applications with productive end uses. ONergy had set up the 1st REC in South 24 Parganas, characterized by abject economical and energy poverty, in partnership with a MFI – Vivekananda Sevakendra-O-ShishuUddyan. The average monthly household income is in the range of INR 2000-5000 (USD 40-100) and the households spends approx. 10% on energy needs (kerosene, battery, mobile charging). Through the REC, ONergy addressed some of the challenges in distribution/servicing, Technology and Financing. a. Innovation in Distribution and Servicing – The REC leveraged on existing local networks and serve as focal points for dissemination of Clean Energy Solutions through a network of Trained Rural Entrepreneurs. We partnered with a local MFI – DCBS, trained their SHG leaders in marketing and distribution of Solar Solutions, and trained 2 of their staff members in advanced Solar Technical Servicing. They promote and distribute solar solutions in their community and also provide timely servicing, with support from ONergy. ONergy currently has established partnerships with 14 grass-root organizations and developed over 150 Rural Energy Entrepreneurs across West Bengal and Orissa. b. Technology Innovation –ONergy provides customised solutions and energy products according to the needs to the users. This ranges from 1 W LED Lamp to 75 W and above home electrification systems and improved cooking solutions, providing different price points to the customer. c. Financing Innovation – ONergy has connected DCBS with Milap – microlending platform, lending money to MFIs at very low interest rates.Now DCBS provides energy financing to its existing benificiaries, and they can pay for their systems in 6 months to a year! ONergy has developed partnerships with 3 Rural banks, other Micro-finance institutions in West Bengal and Orissa and established revolving energy corpus and guarantor fund to facilitate energy lendings.
Sustainability

Marketplace: Who else is addressing the problem outlined here? How does the proposed project differ from these approaches?

Mentors and Supporters – We are currently being mentored by SELCO Solar and TIDE for our Solar and Improved cooking Programs. Technology Providers – We partner with different Solar manufacturers to source off the shelf products, luminaires and other components including batteries and panels. Competitors: Renewable energy products manufacturers and Renewable energy service companies – Some of them have strong brand presence, but use conventional distribution network, do not have strong presence in rural areas and have standardized products. They do not have enough bandwidth to reach last mile. Grid – Govt is planning to expand grid to connect all remote areas. Grid does not have enough energy to provide reliable energy to tail end and off grid areas. Solar can be used to provide the required energy at the tail end, and thus do not provide a threat, and could be potential customers/partners.

Comments

Indrani Sharma's picture

Thank you for your participation in AFI Growth Prize Competition. We have a key question for you: how will you finance scaling-up of your operation? 

Please post your response as comment here before Dec 15, 2012 to be considered for final evaluation.

Dear Indrani,
We are in advanced talks with a set of investors for closing an equity round. In addition, we are getting a bank loan limit done for working capital requirements. We have also recently secured a grant of Rs. 1 crore from SIDA

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