A Model for Selling Solar in India

Of the more than 1 billion people living in India, over 400,000 individuals lack access to electricity, which negatively affects day to day life in a variety of ways.  The Indian government has put several policies and programs in place to expand energy access, including the National Electrification Policy in 2005 that included targets for rural electricity access by 2010.

SELCO-India set out to dispel the myths that poor people cannot afford and maintain sustainable technologies.

In 2005, the Ministry of Power launched a program to promote rural electrification of 100,000 villages and free energy access to over 23 million below-poverty-line households by 2008.  Unfortunately, in practice this process was significantly more expensive than anticipated, totaling approximately $17 billion.  By 2009, lack of adequate funding and poor allocation of resources delayed the accomplishment of the program’s targets.

The entrepreneurial example

In the article “Selling Solar in India,” Contributing Editor, Nilesh Jadhav, stated that “the time has come to support and encourage the entrepreneur and independent financial institutions.” One such enterprise is SELCO Solar Pvt. Ltd. On a local level, SELCO-India has worked to tackle energy access issues for the past 16 years.  Co-Founder and Managing Director, Dr. H Harish Hande, spent time researching rural end user needs and for affordable clean energy products paired with a maintenance service package and end user finance mechanisms.

First opening its doors in 1996, SELCO-India set out to dispel the myths that poor people cannot afford and maintain sustainable technologies, and to prove to the world that social ventures can be successfully run as a commercial entity. Since its beginnings, they have tested and proven the deeply rooted environmental and social impact made possible through the provision of solar photovoltaic (PV) technology to rural communities in India.  SELCO’s innovative and unique distribution and financing offerings are at the core of this success. The company provides products, services and consumer financing through Grameen banks, cooperative societies, commercial banks and other micro-finance institutions.

The company has supplied and serviced over 130,000 households with solar home systems, affecting the lives of over 650,000 individuals who previously lacked access to clean modern energy. Since 1998, the company has displaced over 150,000 tons of firewood and approximately 19 million liters of kerosene.  It has offset over 125,000 tons of carbon and it is projected to offset more than 470,000 tons of carbon for the life of the systems currently installed.  These projects continue to reduce climate change to a greater degree as more systems are sold.

Providing technology, sales and financing

SELCO operates with a holistic vision of its technology product, focusing not solely on sales or distribution.  While the solar PV technology rests at the company’s core, mechanisms are in place to account for the critical circumstances surrounding the technology, including the customer’s financing needs and the product’s service needs. The company has diligently planned its locations and sales to integrate best in class services associated with the sales of its high quality technology products – a key factor in the success of a technology venture.

In addition, the company currently employs about 170 people in Karnataka and Gujarat through 25 energy service centers. The company also provides training and field experience to future solar technology entrepreneurs.

Small and growing businesses, such as SELCO,  can help provide local energy access in rural communities.  Furthermore, their commitment to developing global partnerships and engaging in advocacy around energy access issues not just in India, but throughout the developing world, is a model for the development sector as a whole.