Sparking Entrepreneurship Through Clean and Affordable Energy

Rural Spark

5. Gender Equality 7. Affordable and Clean Energy 8. Decent Work and Economic Growth 9. Industry, Innovation and Infrastructure 17. Partnerships for the Goals

Overview

Rural Spark creates an ecosystem of entrepreneurship from within the local context to grow the world's next rural energy network that is smartly distributed, viable, and sustainable. It has started a clean energy revolution in rural India and Africa.


Author

Dibyendu Adhikari

Dibyendu Adhikari

School

TIAS School for Business and Society

TIAS School for Business and Society

Professor

Mirjam Minderman

Mirjam Minderman

Innovation

Rural Spark supplies energy kits that empower people to become solar energy producers and sellers at the village level. A basic energy kit consists of an energy source (solar panel), a modular storage system (battery pack), and an energy router. The generated power can be used to run multiple devices such as lamps, fans, flashlights, radios, or televisions and to charge electronic devices such as mobile phones and tablets. This is an ideal solution for the remote villages of India, which are off the grid.

Rural Spark offers its energy products and services to the rural villagers following a "hire and purchase" model. The villagers lease the kits from Rural Spark through a monthly subscription. For 18 or 24 months, the villagers pay their monthly subscription fees (typically around $15) before fully owning the kit. In parallel, they earn money by selling energy to their fellow villagers (typically around $23). Rural Spark also provides them with a service and retail platform working in tandem with its energy router and the villagers’ existing infrastructure. This platform helps in executing prepaid payments, subscription modifications, and other customer-oriented interactions through text messages and voice calls.

The villagers produce, consume, and sell energy, so they become independent energy entrepreneurs. In Evan’s words, they “generate energy instead of taking energy.” By working with Rural Spark, these energy entrepreneurs become part of a decentralized network of local energy suppliers. By trading energy surpluses through this network and by linking up energy supply with demand, both efficiency and income increase. Shared ownership also makes this whole ecosystem more reliable and sustainable.

Sparking Entrepreneurship Through Clean and Affordable Energy

Inspiration

The idea of founding Rural Spark appeared when an engineer (Evan), a designer (Marcel), and a business developer (Harmen) brought their innovative minds together. Evan became interested in sustainable energy and smart grids during his studies of Building Services at the Eindhoven University of Technology. Driven by the need to apply this in a proper context and inspired by the efficiency of a smart grid, he focused on clean energy for rural India during his graduation project. Evan recollected: “I wanted to do something with smart grids and smart energy infrastructures. I also wanted to do something which had a lot of impacts and helped society a little bit.” The choice was India, as he recognized the immense opportunities in rural India (where there are 400 million people without access to electricity) to leapfrog the unsustainable, top-down conventional energy networks.

Evan and Marcel flew down to India and started their journey by first educating the rural people in Madhya Pradesh about energy, as the concept of a "smart grid" was still unheard of by the villagers. The team came back to the Netherlands and decided to make something tangible rather than only describing a concept that was quite difficult to explain. After that, they went back to India again, made a prototype, and gave it to a villager to test and experience by using it, with an approach of co-creation. The person started using it not only for himself but also for lending energy to others. At the same time, he started to keep a journal where he made entries of how much energy he lent to others. Only then the idea of creating a local energy network with local energy entrepreneurs struck the team of Rural Spark. Evan noted that, “By giving a simple tool to this one villager, we empowered him to design a business model around it.” There was no looking back for Rural Spark after that.

Overall impact

As per Evan: “Rural Spark’s goal is very simple: we want to make simple tools around which the villagers themselves can build future energy networks for energy sharing.” It has created 100 entrepreneurs in about 50 villages across Bankey Bazar near Gaya in Bihar, India, thereby powering 1,500 households. Rural Spark has changed their lives, not only by providing them with clean, sustainable energy, but also in many other unconventional ways. As part of the self-help groups of the villages, many of the women entrepreneurs have invented interesting business models by themselves such as renting out study rooms for people to use for their electricity needs and providing mobile phone charging services for anywhere between 3 cents and 38 cents.

Among the energy entrepreneurs, a few are shop owners who are now able to keep their shops open for longer even in the absence of grid electricity, and a few are making money by renting out lamps. A local energy entrepreneur can buy around 60 lamps and rent them out to earn $77 a month. The benefits of doing this include safe, reliable lighting and an extra stream of earnings. In addition, they gain social benefits such as increased status in the village.

Rural Spark’s solution has succeeded in reaching the "bottom of the pyramid"—those ignored and under-served by most of the incumbent solutions out there in rural India. Instead of passing on the hefty operational costs of the rural distribution companies, Rural Spark turns the local villagers into entrepreneurs and empowers them with the opportunity to earn money, confidence, and social status. In the long term, Rural Spark wants to provide “energy as a service, not as a product;" however, Evan knows that it “still has a long way to go!”

Business benefit

In 2017, Rural Spark launched a new, upgraded, modular energy kit that gives access to clean and reliable energy. It is now building partnerships with Indian state governments, NGOs, and microfinance institutions. Rural Spark’s primary focus is on most of the north Indian states such as Bihar, Jharkhand, and Uttar Pradesh. It is also in discussion with several northeastern states of India. Rural Spark has also become a dignified member of the Alliance for Rural Electrification (ARE). This membership will help it in understanding country policies and government programs that are coordinated with the mission of ARE. It will also enable Rural Spark to go for geographical expansion beyond India. They are looking to launch a new advanced, hybrid product that can work along with the grid to serve markets in the countries of Southeast Asia and Africa, such as Cambodia and Madagascar. Evan commented: “We expect to scale this model in these emerging markets, even in semi-urban areas.” Rural Spark is also looking at options for going beyond the current application and using their kits for other uses such as energy sharing for cooking.

In near future, Rural Spark aims to be one of the major players in the arena of smartly distributed energy networks in rural India. It hopes that it can convert the Indian rural energy market from a commodity market to a utility market, inevitably. For providing a long-term solution, it is creating a sustainable value chain in which all the partners (product, distribution, and financial) can cooperate with each other so that the stable ecosystem allows a mature and enduring energy network to appear. To do this, Rural Spark is also increasing its team base; over the last three months, it has been recruiting for some major key positions such as Managing Director and Head, Partnerships and Strategy. On the growth plan, Evan stated that the “coming six months will be focused mainly on business development. At the same time, we will slowly start working on the next product, which should reach the markets two to three years from now.” With that, Rural Spark will race toward achieving its vision of "Continuous Energy Access for Everyone."

Social and environmental benefit

Rural Spark’s biggest social impact came through the effort of recognizing the villagers as more than consumers and thus creating value-conscious stakeholders in the process. The local energy entrepreneurs are the core business of the enterprise. In contrast to being only buyers, they form the main assets and help shape the whole network. Rural Spark involved local villagers in the design of the products and network from the beginning through its bottoms-up approach. It has helped the local entrepreneurs to design business models that are local in characteristics and context. The empowerment of the rural villagers (the "bottom of the pyramid") decreased their vulnerability and increased their self-respect and self-esteem. It stimulated economic activities in the villages and gave the local villagers access to sustainable and affordable energy.

Rural Spark’s focus on renewable sources has a great positive impact on the environment as well. By helping leapfrog the outdated centralized energy infrastructure, it is enabling the growth of a distributed infrastructure in rural India, allowing for the use of small-scale clean energy solutions. It is offering alternatives to traditional fossil fuels, decreasing environmental impact. Rural Spark has also aided in decreasing the use of kerosene in rural households, thus mitigating risks such as inhalation of toxic gases or even burning down of houses. Reduced kerosene use also means reduced carbon dioxide emissions into the environment. Rural Spark’s leasing model allows for recycling, innovating, and updating. Hence, the villagers always have access to the most advanced and sustainable energy solutions.

Interview

Evan Mertens, Founder, Technology

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Rural Spark

Rural Spark

Hertogenbosch, NL

Business Website: http://www.ruralspark.com/

Year Founded: 2011

Number of Employees: 2 to 10

Rural Spark is a young and ambitious social enterprise that is improving access to energy in the remote parts of India in a clean and sustainable way. While doing this, Rural Spark is also building a smartly distributed network of local energy entrepreneurs. It is empowering under-served individuals to improve their socioeconomic conditions, bringing prosperity to communities by enabling them to generate, use, and sell energy. Founded in 2011 by three energetic Dutch friends—Evan Mertens, Marcel van Heist, and Harmen van Heist—Rural Spark aims to provide potentially 10 million rural households with sustainable, reliable, and clean energy by 2020.