Micro Solar Intervention
Designing and testing a micro-finance model for entrepreneurs to expand energy access in Haiti
My research and design-build efforts in LatAm exposed me the opportunity new tools and infrastructure can play in non-formal areas, from favelas in Rio to barrios in Caracas to post-earthquake tent camps and slums in Port-au-Prince. During November and December of 2011, I collaborated with a team composed of Georgetown Students, a MFI from Penn State and Haitian solar company to design and test a micro-finance model to introduce energy-generation tools to these markets.
Key responsibilities: work on the ground in Port-au-Prince to select pilot community, build community partner relationship, design optimal solar configuration and coordinate system installation.
Micro energy-generation tools can meet huge demand in off-grid markets, but their high upfront cost is a barrier to entry for entrepreneurs.
The central issue constraining energy access is not how energy is generated but how consumers pay for service. Non-formal areas, such as slums and favelas and IDP camps, lack infrastructure and instead, rely on autonomous generation tools -- especially solar.In Haiti and other similar developing countries with weak electrification, consumers pay a premium, about 10 HTG ($0.25), to charge their cellphones. How can tremendous demand be met with these existing energy technologies?
Can micro-finance institutions facilitate ownership of these tools through micro payments?
We pitched a fledgling MFI on a technology-based lending model: offer a micro-solar system and repayment plan for entrepreneurs to recharge cellphones. Our team optimized the financial model by balancing the solar system's cost and MFI lending rate with the entrepreneur's profit.
We piloted the model with an entrepreneur in an IDP camp, outside of Cité Soleil in Port-au-Prince
One of our local partners worked with an IDP camp, Capvva, that was particularly disconnected from infrastructure. Capvva's 1000 families would have to walk at least 1/2 mile to access water, electricity, internet cafe service, transportation, etc. I selected this site because of the significant demand for these types of resources.
The residents had assembled a church council and we selected the deacon because if his high status and central tent placement at the camp entry. I was worried about any notion of favoritism reverberating resident jealousy and wondered if there was a way the solar system could offer value, beyond an enterprise solution, to encourage consumer adoption.
Findings from my field research revealed significant community security issues, including rape and burglaries. These issues happened at night when the disconnected Capvva area was shrouded in darkness, due to lack of electrification. Street light could be a chief security strategy and be a boon to productivity: children can study and residents can socialize after dark.
I worked with our solar company partner to incorporate a community streetlamp into the micro solar system. The final PV system included a light for the deacon's home, a community streetlamp, and enough battery capacity to charge 20 cellphones per day.
What if consumers could pay for their phone charges with airtime?
A significant issues with MFI repayment is collecting the payment. Field agents often have to motorcycle out and find loan recipients every month to collect cash. Our team romanticized a system in which consumers could pay digitally, automatically sending a fraction of the payment to the MFI.