Tell us about the social impact of your innovation. Please include both numbers and stories as evidence of this impact
We have 148 dealers selling solar products in all Rwanda. From June 2009 until May 2010, 1.584 products have been sold. Each product sold impacts 6-8 people (household size).
Through our distribution model we manage to reach an important part of the people living in rural areas with no access to any other source of lighting but kerosene, candles or wood. Clean and affordable solar energy brings many benefits to this population.
- Our dealers. We contribute to job creation and business development in the emerging solar sector. In addition, by distributing our products, they dramatically increase their earnings potential.
- Local Businesses: We contribute to the local economic development encouraging entrepreneurial cottage industry expansion by extending the functional length of the workable day. We stimulate further economic activity in rural areas.
- Households: Traditional light sources such as kerosene lamps are expensive and inefficient. Using solar lamps means potential savings for families and therefore, poverty alleviation.
Using solar products results in an improvement of studying conditions for low income households since light provided by kerosene lamps is not sufficient for studying. Enhancing educational performance increases students’ possibilities to contribute to economic development for themselves and their families.
Clean solar energy improves child/family health by replacing unhealthy energy sources and improves the quality of health care delivery by providing solar power for rural community health care facilities.
Our products contribute to protecting the environment through greatly reducing the CO2 emissions, by replacing fossil consumption with clean solar energy utilization, and by reducing tree cutting thus preventing soil erosion and saving essential wildlife habitat.
Our first dealer, Teresa, was distributing airtime in a borrowed space in a shop. When she started working with us she was able to rent a small shop for herself and sell various products. Nowadays she has 2 locations selling our products. Due to the increased earnings she has made, she has been able to send her 3 kids to school.
Problem: Describe the primary problem(s) that your innovation is addressing
The main problem we are addressing is the lack of access to clean and affordable sources of lighting that millions of people are facing.
By making solar products available to almost everyone in the country we address the problems stemming from the use of the only available sources of lighting for population living in off-grid, remote areas, such as kerosene lamps, candles and wood.
- Rural families spend up to 30% of their annual income in these expensive and inefficient sources of lighting.
- Kerosene lamps, candles and wood do not provide enough lighting for studying.
- Use of kerosene increases risk of respiratory diseases, especially for women and children, the most exposed to kerosene vapors, as they are the ones who spend most time inside the house. In addition, the use of kerosene lamps inside houses involves high risks of fire accidents.
- Use of wood and kerosene contributes to deforestation, soil erosion and CO2 emissions.
- Women in rural areas spend, not only an important part of the household annual income for kerosene or wood, but also time and effort that could be used for other activities.
Actions: Describe the steps that you are taking to make your innovation a success. Include a description of the business model. What might prevent that success?
- Dealers training. We are aware that our foundation is our dealers and the stronger we make them the stronger we will be. We invest heavily in training.
We need each dealer to sell 10 products per month for our enterprise to be a success. The key factor in achieving this target is the business skill of the entrepreneur. Our coaching becomes the most important aspect of our management.
- Right product, right price. There is enormous demand for home and small business lighting. All products undergo thorough quality and marketing testing. We make products available and affordable to almost everyone.
We have translated our solid understanding of the market into a business model that allows us to reach out to consumers with methods appropriate to local conditions and preferences.
- Low overheads. We have efficient methodologies for managing our distribution network with very low overheads.
Each of our four Territory Managers is responsible for managing 30-50 independent rural dealers. GLE's fixed costs in this structure are limited to the core company. This financial efficiency is a major factor for the sustainability of the business. The model is extremely scalable in Rwanda and other markets. We can add more dealers/products with no/minimal increase in overheads.
Our most significant risk is that the product is not accepted or that potential customers will still struggle to afford the entry level cost.
To mitigate this risk, we have done extensive market research to ensure that our product is designed to meet the market demand and expectations. It is imperative for the long term sustainability and profitability of our project that our products are accepted in the market; hence we have incentive to continually conduct thorough market research.
We have also developed tools to address consumer´s financial problems or uncertainty related to the quality of the products. Under certain circumstances, we have a sale mechanism that allows 3 payments that make our products affordable to almost everyone. In addition, our dealers let clients use the product for one week before they have to pay for it. Both systems are working well so far.
Results: Describe the expected results of these actions over the next three years. Please address each year separately, if possible
Products sold/lives impacted
From June to December 2009 we have sold 562 products. From January to May 2010 we have sold 1,022 products. If we continue to increase at the same rate, by December we will have sold 6,500 products in 2010. About 39,000 people lives will be impacted and GLE business will become sustainable. To be able to achieve this objective we need to continue investing in our dealers training.
Considering a 0% monthly growth on sales from December onward, projected sales for 2011 will be 12.000 products sold. It is more likely that sales continue to increase at the rate of 30%. In this case projected sales for 2011 will be 17.000 products sold.
Greatest contribution would be GLE proving this a profitable market. Each company that can do this (none has done it yet) will attract many other investors to this market, making it more competitive, more innovative, more consumers will have access to a greater variety of clean energy products. More products for this market will be developed.
Dealers created / profits realized by entrepreneurs
Once the majority of our dealers are sustainable, we will add 30 more dealers in Rwanda. We expect to do this in February 2011. Sales rate and availability of products in Rwanda will be increased.
A dealer that sells 10 products per month makes a significant amount of profit for a rural entrepreneur and this stimulates localized economic development. Some of our dealers already sell 20 - 30 products per month. As a village develops economically our business in that village will also increase. This economic development is a foundation of our strategy.
GLE business is sustainable and is scaled to other areas.
When the Rwandan operation is cash-flow positive, GLE will expand into other countries in Africa with this same distribution model and same product line.
If your innovation seeks to impact public policy, how?
The major policy barrier to the adaption of solar products in Rwanda is that they are not exempted from VAT. If we can prove the viability of the market and show the Rwandan Revenue Authority that more money can be collected through income tax than through VAT, they will agree to exempt solar products from VAT, which will allow solar companies in Rwanda to lower their prices by about 20%.