Innovation

SELCO has created a holistic system that integrates financial models, entrepreneurship and sustainability to serve the underserved and the unserved population.

In working with the poor, Harish Hande, co-founder of SELCO, explained: “You must respect the non-expendable needs of the people. Money out of existing income leaves the poor poorer.” Hande emphasized that a product or service must empower the poor to create assets, increase their quality of life, and improve their livelihood. “Affordable does not mean low cost, it means a combination of technology and appropriate financing,” and products that are of good quality and reliable.

A typical solar system costs $200; the challenge is to secure credit for a bank loan for someone who has no credit, no experience with banking, and no bank account. At first, banks asked for a 100% guarantee of a loan and SELCO guaranteed the loans. Once the individuals paid off their loans within the contractual time frame, the banks gradually lowered the guarantee to 20% and now loans are given for 1% guarantee. The rural poor can now obtain loans with installment payments from Grameena banks, cooperative societies, commercial banks and micro-finance institutions.

SELCO employees first talk with rural villagers to understand their needs. Hande noted that it is important to have an equal partnership through respect of each person's knowledge and experience and find solutions together. Besides the initial solar panel, solar products include: indoor and outdoor solar lighting systems including street lights, a solar water heater, and a solar inverter to power items such as a computer, a television and a sewing machine.

Inspiration

Harish Hande grew up in a middle class family and his father worked for a state authority. Hande did well on his exams and was accepted at one of the better schools in India which are highly subsidized and therefore less expensive with no fees. Part of the subsidization of education is derived from a tax on salt and sugar that everyone pays, including the poor. After college, Hande received a scholarship to pursue a doctorate at the University of Massachusetts, Lowell. In comparison, a student from poor circumstances had to study by a kerosene lamp and often was not able to complete schooling because of the lack of money. Hande felt deeply that he, like others, had the advantage of being “closer to the finish line” to enter one of the best schools. He wondered: “How do you make a level playing field?” The answer for Hande is providing reliable electricity for the unserved and underserved. His inspiration to create a social enterprise was influenced by two major experiences: working with the rural poor in India, Africa, Sri Lanka and South America, and working with SEWA, a Gandhian based organization that empowers women.

In working with the rural poor, Hande learned the importance of partnering with people and pulling everyone's strengths together to develop solutions to meet their needs. This approach is a guiding principle of SELCO. At SEWA, he was part of a cooperative model that empowered women through the use of sewing machines that increased their productivity. SEWA’s bank has been profitable for 22 years. Ela Bhat shared an important piece of advice with Hande: “Cut a part of a hole in a wall – to see the sun light.”

Overall impact

1. 450,000 households, 8,500 mosques, temples and institutions use solar panels installed by SELCO.
2. One hundred rural villages are now 100% solar due to a SELCO initiative.
3. Reliable solar energy is available to the rural poor often with cost savings.
4. New business opportunities are available to the rural poor to create assets.
5. The value of solar energy is instilled in the next generation.
6. SELCO Foundation was created with the mission to share what has been learned about creating a holistic system that integrates financial models, entrepreneurship and sustainability to serve the underserved and the unserved. Hande notes that each piece of SELCO’s success is “… like a Lego piece. Pick it up and use the process” anywhere in the world.

Business benefit

As a social enterprise, SELCO is meeting its mission of supplying solar energy products and services to the rural poor. Profits are invested back in the business. Many of its 400 employees are former clients who see the value of solar energy and the opportunities it brings. The rural poor can now create assets through increased productivity and new businesses that aid them in paying off their loans for solar panels. With secure ways to finance loans for the rural poor and establish their credit, clients can purchase other products, such as, a solar powered sewing machine to increase their productivity. “I am bankable now,” said a villager. Already, the next generation wants the advantages they had with solar energy while growing up; like the young woman who would not marry her future husband until he installed solar panels in her new home.

Social and environmental benefit

1. Improving the quality of life in homes, businesses and institutions through the use of solar energy, for example, villages are safer with street lights.
2. Providing an alternative energy source to fossil fuels and improving air quality.
3. Eliminating the dangers of using kerosene lamps.
4. Providing a way to enhance the quality of education by delivering programming in math and science and English to rural schools through a solar powered network.
5. Creating an economic and service ladder. People have the opportunity to be part of the SELCO operations in many different capacities based on knowledge (not on degrees) and experience.
6. Increasing local employment opportunities, such as, solar panel installers.

Interview

Harish Hande, PhD, CEO, SELCO Foundation