SELCO: Providing Sustainable Energy to the Bottom of the Pyramid Consumers

            
 
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Case Details:

Case Code : LDEN083
Case Length : 23 Pages
Period : 1995-2012
Pub Date : 2013
Teaching Note :Available
Organization : Solar Electric Light Company
Industry : -
Countries : India

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.



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"SELCO’s frugal just-in-time energy distribution system - as opposed to the always-on but wasteful electricity grid - brings more value to more Indians at less cost, and it is both environmentally and economically sustainable. SELCO’s business model is an outcome of the jugaad mindset." -

-Navi Radjou, Jaideep Prabhu, and Simone Ahuja, authors of the book Jugaad Innovation, in 2012.

"You have to look at the bottom of the pyramid more sustainably – by creating asset-based consumer goods."

-Harish Hande, co-founder, Solar Electric Light Company, in 2011.

"A unique social business model. This is a most exciting example of a company that has corporate and social responsibility at the heart of its mission."

-Julian Birkinshaw, Faculty of Strategic and International Management, London Business School, in 2008.

Introduction

In July 2011, Harish Hande (Hande), a social entrepreneur and co-founder of Solar Electric Light Company (SELCO), a Bangalore -based solar electric company, was honored with the Ramon Magsaysay Award sponsored by the Ramon Magsaysay Award Foundation (RMAF). The award recognized Hande for "his passionate and pragmatic efforts to put solar power technology in the hands of the poor, through a social enterprise that brings customized, affordable, and sustainable electricity to India's vast rural populace, encouraging the poor to become asset creators," according to Carmencita T Abella, President, RMAF. On receiving the award, Hande said, "It is a humble moment for all of us at SELCO.

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The Magsaysay Award in a way justifies the path of social sustainability that SELCO has always strived and fought for – in order to connect poverty alleviation and sustainable energy. The award will motivate all employees in SELCO to push forward its mission and hope to inspire many more to start various social enterprises that can help reduce the poverty in the world."

Ever since Hande launched SELCO in 1995, he had been involved in dealing with one of the most pressing problems in developing countries worldwide – unreliable access to electricity. According to the World Bank , the electricity crisis in India was severe. In 2011, over 400 million people had no access to reliable electricity and an estimated 100,000 villages had no access to the national grid and electricity. In locations where power supply from the grid was not available, most Indian rural households had to rely on alternative energy sources such as coal, kerosene, and biomass for cooking and lighting. While these sources of energy were costly, it was also reported by the World Bank that in 2011, the smoke and fumes emitted from open cooking fires killed nearly 1.6 million people. Most of these were women and children and they died from emphysema and other respiratory diseases. In addition to health and environmental concerns, lack of reliable energy sources meant students could not study for an extended length of time due to irritation and pain in the eyes caused by the emission of smoke from the light sources they used.

In 1991, when Hande had gone on a field trip to the Dominican Republic while pursuing his doctoral degree from the University of Massachusetts, he chanced upon a village where poor people were using the solar photovoltaic (PV) lighting system and were paying for it. After meeting Richard Hansen (Hansen), an American engineer who had devised this system, Hande felt that the same business model could be applied in India – a decentralized approach instead of large centralized thermal stations was the key to serving the poor in remote villages of the country. In January 1993, Hande met Neville Williams (Williams), a former Greenpeace activist and founder of an NGO, Solar Electric Light Fund (SELF). Like Hande, Williams had been inspired by Hansen’s solar PV model and offered reliable electricity to the poor worldwide. In 1995, Hande in association with Williams co-founded SELCO....

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