As right-wing opponents of renewable energy grandstand in Washington about the collapse of Solyndra, trotting out all the old hobby horses about price and competitiveness and the rest, I’ve decided this is a fine moment to let India’s most innovative solar energy entrepreneur teach us some remedial math.
The entrepreneur in question is Harish Hande, co-founder of the Solar Electric Light Company of India, aka SELCO. Hande is a graduate of India’s elite Indian Institute of Technology and the University of Massachusetts, and unlike many electrical engineers, he decided to focus on the socioeconomics of implementing technology rather than the technology itself. After graduating, he helped launch SELCO in 1995 with Neville Williams. Among other investors, they found a fantastic investment partner in E+Co., an innovative international development organization specializing in social entrepreneurship.
Hande will tell anyone who will listen — including me in an interview for my book, "The Geography of Hope," back in 2006 — that he and Williams built the company to dispel three myths. He was interviewed recently by the Indian Express newspaper, and here’s how he explained it:
The fundamental [premise in founding SELCO] was how to balance social, economic and environmental stability at the same level. And to destroy myths like the poor can’t afford technology, the poor can’t maintain, and thirdly that you can’t run a commercial venture while trying to meet social objectives.
Hande rejected the idea that renewable energy was too expensive for the hundreds of millions of Indians with no household electricity at all, dispelled the notion that the poor can’t manage a small loan and keep their power system running, and demonstrated that a development project could also be a profit-making enterprise.
Since its founding, SELCO has partnered with small banks throughout rural India to bring electricity to more than 100,000 village homes that had never before glowed with electric light. The villagers themselves own the systems and pay them off through flexible microcredit loans. This novel approach has allowed electricity to reach villages that previous top-down electrification schemes failed to reach. One of the best SELCO stories is about how the top graduate for 2010 in the state of Karnataka — home to Bangalore, the high-tech hub of modern India — was a young woman from a village lit by SELCO solar panels.
Along the way, SELCO has uncovered a kind of math that you can only learn if you really get to know the world’s poor. The story Hande told me a few years ago was about a villager who ran a market stall. She couldn’t afford a solar panel if the loan repayment was 300 rupees (Rs) per month, but she could manage it at Rs 10 per day. This would seem to be the same thing, but for the woman, it was two different financial systems. As Hande explained, the woman never had the means to save up the Rs 300 to make a lump sum repayment, but in her day-to-day work she spent Rs 15 on kerosene. Eliminate that expense with a solar panel, and she can pay it back from her kerosene budget.
In his more recent Indian Express interview, Hande made some further calculations. He pointed out that millions of poor Indians now have mobile phones but no plugs to charge their batteries with. Kiosks throughout India will recharge phones on the fly for 5 rupees (about a dime) a pop. Here’s Hande on the implications:
That’s the irony. As we go poorer into the economic strata of society, people spend more on energy. The average household income in many of the villages we visit is Rs 1,600 [about $30] a month. Out of that they spend Rs 155 on kerosene and candles and Rs 40 a month merely to charge their mobile phones.
[. . .]
You know everybody says the subsidy is on kerosene, but if you go and ask a street vendor in Bangalore, she spends Rs 15 a day on kerosene. And what happens is, everybody sits in Delhi and says, “Solar (energy) is expensive, we need to subsidise it.” They don’t look at the fact that there are various other parameters and an ecosystem that needs to be built. Today as we say, solar (energy) is expensive for the rich and affordable for the poor. . . . The poor spend more on energy. Today it is at Rs 195 [about $4] a month. If you look at five-year financing, solar (energy) actually works equal or cheaper.
So here’s a headline for you: In rural India, solar power is cheaper than conventional energy. People making 30 bucks a month are better served by a limitless clean energy source we routinely dismiss in the richest countries on earth as beyond our means. The trouble, you see, isn’t with renewable energy. It’s more basic — it’s how we count.
To practice the new green math 140 characters at a time, follow me on Twitter: @theturner.
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