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EXECUTIVE PERSPECTIVE: An energy option for 30% of the world’s population

We sat down with Sam Goldman and Ned Tozun, founders of d.light, a global social enterprise aiming to improve the lives of the two billion people in the developing world that live without access to reliable energy.

Sustainability: What percentage of the world currently lacks access to electricity at home?

Sam: 2.3 billion people worldwide still lack access to reliable electricity. They either live without any connection to the grid, or they have grid electricity that frequently fails. In Africa, about 60% of the population doesn’t have access to reliable power.

In India, the grid reaches more than 90 percent of rural villages, but that doesn’t mean people’s homes and businesses are actually connected. There, 311 million people still do not have access to electricity. Those who have no or very unreliable electricity are forced to find power from other sources. Unfortunately, they often use kerosene, which is expensive and dangerous.

Sustainability: Why does this matter, in a very practical sense?

Ned: Energy access is closely linked with well-being and economic prosperity. An individual’s Human Development Index score, which takes into account life expectancy, education, and income, can double or even triple with increased energy consumption of a few hundred kilowatts per year.

Studies from India indicate that electrification, whether it be from solar lanterns, home systems, or microgrids, increases incomes up to 38 percent. Access to brighter, more reliable light alone can improve literacy rates as much as 74 percent.

Sam: It also matters because we are giving families the option to move away from existing solutions that are unreliable, expensive, and even dangerous. In regions like South Asia and East Africa, households that are connected to the grid may still experience power outages as frequently as fourteen times a day. For these families, as well as those who are not connected to the grid at all, the kerosene lantern is the only light they have after the sun goes down. But burning kerosene has serious drawbacks. Breathing its fumes is equivalent to smoking two packs of cigarettes a day. Kerosene also causes fires and severe burns, resulting in fatalities 13 percent of the time. On top of that, kerosene costs 40 times what the average American pays for energy, making it a significant economic burden for individuals and communities. We want to eradicate kerosene as a lighting source and provide safe and reliable alternative sources of electricity so these regions can leapfrog past the grid, straight to renewable energy.

Ned: We saw this with mobile phones in the 1990s. As soon as service providers made phones available for free and allowed customers to pay per minute or per SMS, mobile phones became accessible even to families with very limited incomes. Today many countries don’t need to install landlines because everyone has a mobile phone. The same thing can happen with energy. With solar lanterns and home systems, centralized energy grids are no longer necessary.

Sustainability: What does your company do?

Ned: We provide solar energy solutions for households and small businesses that transform the way people all over the world use and pay for energy. Our extremely affordable and durable solar solutions are designed specifically for families with no or limited access to electricity. We’ve already impacted more than 63 million people since our founding in 2007. Our goal is to reach 100 million people by 2020.

Sam: Our product line is aimed at lifting people up the energy access ladder. Our products range from single-function solar lanterns to multi-function lights and mobile phone chargers, to more advanced solar home systems that can power an entire household.

We offer a wide range of solar-powered lanterns and mobile chargers. Our entry-level product is the A1, one of the world’s most affordable quality solar lanterns. Next is the S2 Learning Light, which is the world’s best-selling task light, and the S20 Family Lantern for ambient room light. The S100 and S300 provide light and charge mobile phones.

We are also greatly expanding the global reach of pur D20 and D30 solar home systems. They operate like personal power grids for homes or businesses, and include a solar panel, mobile phone charger, solar lights, light switches, a torch, and a radio. The lights can last up to 17 hours on the low setting and are 12 times brighter than kerosene.

Sustainability: Why are you doing this?

Sam: I’ve always believed that the region where someone is born shouldn’t determine what opportunities they have. There’s no reason why 2.3 billion people around the world shouldn’t have access to reliable power. The technology is here, it’s proven, and it’s extremely affordable.

Lack of energy limits progress for people all over the world. Our goal from the beginning was to make solar-powered products that were extremely affordable so anybody could purchase them and immediately improve their quality of life.

Today, in many parts of the world, the number of people living without electricity is actually increasing. Population growth is outpacing the development and reach of reliable, centralized grid service. Without affordable, reliable energy solutions like ours, families living at the base of the economic pyramid—the poorest families in the world–might have to wait decades for access to energy.

Sustainability: What does it cost?

Ned: One of our top priorities has always been to provide the best value for money for customers, regardless of their income. Our product line ranges in price from a $5 solar light to a $200 solar home system that lights up a small home and can power several devices.

Though the upfront cost can seem high for some of our customers, our products pay for themselves quite quickly—oftentimes within a few months. Customers who switch to solar from kerosene save on average $85 a year, a significant sum when you make just a few dollars a day.

For families who want to purchase a home system, we offer very affordable financing options. Customers only need to pay a small deposit to bring a grid-like experience into their homes. They then pay for electricity on a daily basis, at a rate lower than what they previously spent on kerosene.

Sustainability: What are the actual benefits?

Ned: We evaluate our impact Collectively, our products have saved $5 billion in energy-related expenses and enabled 31 billion productive hours for working and studying. We’ve also had a significant environmental impact, as our products have offset 22 million tons of CO2—and counting.

Individual customer stories demonstrate the impact we are having even more powerfully than the numbers do.

Schools that we’ve partnered with in India and Tanzania have reported that students studied an additional 1-3 hours per day after they received solar study lights. In Karnataka, India, schools reported that test pass rates increased by 15%.

Rovina Surat of Indonesia, a single mother, hunts squid at dawn with her d.light S300. She also began selling d.light products as a side business. The income she generated has allowed her to build a house for her family.

Agnes Wanjiru of Embu County in Kenya sells chips (French fries). She used to make about $4-5 a day from her business, but as soon as she bought a d.light S20 and began using it in her stall, her income doubled to about $10 a day. The brighter light allowed her to keep her stall open for longer and attracted more customers. Agnes then upgraded to a d.light S300, allowing her to start another business charging phones, and her income increased another 50% to $15 a day.

These are all stories of incredible, lasting change—catalyzed by simply providing access to affordable and reliable energy solutions.

Sustainability: What would make the biggest difference for accelerating access to your technology?

Sam: We believe that our pay-as-you-go financing solution is an extremely effective way for us to get our solar solutions into the hands of many more people who need access to safe, clean and reliable power.

Thus far, we’ve enabled more than 250,000 households to upgrade to solar home systems, primarily through some sort of consumer financing. Now we’re opening up this comprehensive solution to our partners and distributors in Africa, Asia, and Latin America. Our local partners can integrate the PayGo platform’s payment systems, customer support, and inventory management tools into their existing operations. We expect our products and home systems to reach millions of families in underserved countries and regions in the coming years.

Ned: One of the greatest barriers to the broad expansion of solar home systems is the upfront capital required to build and distribute them. We’re excited to see more and more traditional investors and lenders view off-grid energy markets as a significant investment opportunity. As of mid-2015, over 13 million brand-quality portable solar lights had been sold worldwide, so it’s clear that investors can make can make strong returns and have a tremendous social impact. Solar lanterns alone are a $300 million market; we expect the market for solar home systems to be even greater.

Sustainability: What gives you hope?

Ned: I’m greatly encouraged by the many social, technological, and business trends that will make it easier and easier for us to provide high-quality, affordable energy solutions for base-of-the-pyramid households. When we first started d.light, we faced a lot of skepticism from those who didn’t think we could build a sustainable business serving families in developing countries. That’s no longer a question. Today we are just one of many businesses providing essential services and products to off-grid families. Collectively we have demonstrated that it’s possible to build a profitable business driven by a social mission, one that can benefit the environment, customers, employees, partners, and investors alike.

Technologically, we are making great leaps in the efficiency and performance of everything from batteries to solar cells. And the costs of these technologies keep dropping. The future is wide open in terms of the energy-related product offerings we could provide for families living in the most remote areas of the world, products that are environmentally sustainable, affordable, and even better than what people in developed countries use today.

Sam: I love visiting our customers in the field and seeing firsthand how their lives are being changed by our products. They experience material benefits like light and mobile charging, but they also have new opportunities for better education, higher incomes, and greater health and safety.

Because of our lights, more children are studying for longer hours. They have a higher likelihood to finishing high school or college, which could change the entire trajectory of their lives. And improvements in these individual lives translates directly into lasting economic and social change for entire communities. We have so far directly impacted more than 63 million people, but the work we’re doing now will likely have a positive effect on countless other families.

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