Labl (lighting A Billion Lives)

Xavier Institute of Management, Bhubaneswar Post Graduate Program in Rural Management, 2007-2009

Course: Natural Resource Management Instructor: Prof. C. Shambhu Prasad

“Lighting a Billion Lives- LaBL”

Submitted by :Sumendera Punia

(Roll No.-55)

Vishal Kumar

(Roll No. -59)

LaBL (Lighting a Billion Lives) “AsatoMaa Sat Gamaya Tamaso Maa Jyotir Gamaya Mrityor Maa Amritam Gamaya”

“Oh Lord! Lead me from the unreal to the Real, from darkness to Light, from mortality to Immortality”

How many India are there? While one is striding at a very fast pace riding on the growth of Information Technology, Manufacturing, etc, the other is left behind in the hands of darkness. These are two faces of the same country. When one end is struggling to arrange a day’s meal the other is driving a Mercedes Benz. One is enjoying the chilled environment of an Air conditioned room, the other doesn’t have access to light. It is the disheartened fact that 1.6 billion people are living in darkness; of which 400 million are from India (we have crossed 60 years of our Independence one year back.) According to government data, 76 million rural households in India lack access to electricity. Of this, 65 million use kerosene, Wax candles and dung cakes, firewood, and crop residue bio-mass for lighting. Each household for that spend around Rs. 2to 5 per day. What they get in turn is low level of illumination in company with smoke and fire hazards due to accidental pilfering of kerosene and tipping of candles. Global status Report on renewable energy resources-2007 says Grid connected solar Photovoltaic (PV) has been the fastest growing (50% annually) energy technology worldwide. Germany, Japan, Spain, and USA are the leading nations in harnessing solar energy for fulfilling energy needs. Out of total 25 lakhs solar homes worldwide 3.6 lakhs are in India second to China having 4 lakhs. Over the years reasons for the lack of capacity expansion in power generation is the revenues earned are lesser than the cost of operation. This weakness in energy supply causes loss of economic and social welfare of large section of society

The sun is a giver of life. Our ancient rishis composed hymns in praise of the sun god. Sunlight was used by early Greeks, Native Americans, and Chinese to heat their buildings. Solar energy drives the climate and weather and supports virtually all life on the earth. Heat and light from the sun, along with solarbased resources such as wind and wave power, hydro electricity and biomass, accounts for over 99.9% of the available flow of renewable energy. Nearly 3850ZJ (zeta-joules, one Zeta joule=1021 joules) of solar energy is available every year. At any given point of time, the earth’s upper atmosphere receives 174 peta-watts (3.5 peta-watt=1015 watt) of incoming solar radiation (insolation). About 6% of the insolation is reflected and 16% is absorbed when it enters the atmosphere Solar power is used to refer to the conversion of sunlight into electricity. This can be done either through the photovoltaic effect or by heating a transfer fluid to produce steam to run a generator. India has favourable natural conditions for large-scale harnessing and deployment of solar energy. Despite these favourable conditions, out of the total energy consumption of nearly 120 GW per annum, only a small fraction is generated through solar energy. In our country, so far the solar energy equipment has been focused towards rural, un-electrified areas as off grid applications. Large-scale solar farms coupled with a promising feed in tariff initially would be a right combination to kick starts the growth. The solar lantern, a portable lighting device that uses CFL, has its own rechargeable battery inside that can be charged every day using an 8to 10 watt solar panel. This is an ideal device to light up homes that currently use biomass or Kerosene for lighting. About 5.8 lakh solar lanterns have been distributed in India in the past 7 to 8 years under the program of the Ministry of New and Renewable Energy, but its penetration is miniscule considering the size of the population.

Lighting a Billion Lives - LaBL (A TERI initiative):The Energy and Resources Institute (TERI) in New Delhi had launched the Lighting a Billion Lives Programme (LaBL) to provide light to “billion lives” in India and abroad. It had developed solar lanterns that are currently working in seven Indian states. These solar lanterns can benefit 65 million households and eventually reduce 5.9 million tonnes of carbon dioxide gas emissions from kerosene lanterns. Objectives:- To bring light( LIFE) into the lives of one billion people by implementing the initiative in selected villages in the NGO’s region of work across the world in turn displacing the kerosene and Paraffin lanterns with solar lighting devices, there by facilitating: Education of children.  Providing safer illumination and kerosene smoke free indoor environment for women to do household chores.  Providing opportunities for livelihoods.

The scope of this Lighting a Billion Lives initiative is as follows:1. Design and development of the solar lantern charging station for the target villages by TERI. 2. Identification of villages, site and location for implementing the package. The solar lantern charging station will act as the centralized location from where the lanterns can be rented out to the end users. 3. Identification of local entrepreneur who will be mainly involved in day-to-day operations of the solar lantern charging station. 4. Installation of the solar lantern charging station in the identified location. 5. Development of appropriate business model with provision of training and capacity building for the local entrepreneur. 6. Awareness generation among the communities on the benefit of the solar lantern and its potential use for the various livelihood generation activities.

Delivery Model: This whole model for the campaign is a fee-for-service model, where solar charging stations

are set up in villages for charging the lanterns and providing them on fee-for-service (or rental)

basis to households and enterprises on a daily basis. The charging stations are operated and managed by local entrepreneurs who are selected and trained on technical, operational and daily book keeping accounts by TERI in association with its grass-roots level partners and other like-minded institutions such as NGOs, community-based organizations, educational and charitable trusts, local government units, selfhelp-groups, and micro-finance institutions. These institutions, identified as campaign anchors, play a significant role in coordinating, sustaining, and advancing the campaign.

Scope

Scope Details

TERI

1

Design and development of Solar

P

NGO

Local Entrepreneur

Lantern Package 2.

Identification of the village, Site

P

and location for the development of Stations 3.

Identification

of

Local

P

Entrepreneur 4.

Installation

of

Solar

Charging

P

S

stations 5.

Development of Business models

S

P

6.

Development of capacity building

P

S

S

P

S

S

P

of local entrepreneurs 7.

Awareness generation among the local communities

8.

Business expansion and marketing

*(P= primary organization that will be involved, S=Secondary organization that will be involved, along with the primary organization in the respective scope.) NGO’s will facilitate TERI in identification of villages and suitable location of solar lantern charging stations. Similarly for finding out potential people who can be trained for operating these stations. They will also assist TERI and local entrepreneurs for developing business model and overall monitoring by TERI for the identified station. After selection of the site, the local anchor point and the local

entrepreneur, the charging station is licensed. The event is followed by several focus group discussions with the village elders, women, children, representatives of the local self-government and others. The purpose of the discussions is to spread the awareness among the end-users on the benefits of the solar lantern and its potential use in livelihood generation. Availability of land and building (Fixed assets) will be ensured by locally selected entrepreneurs. They will be held accountable for any mismanagement (damage to the hardware and security breach) in day to day operations and monitoring processes at local level. They have to abide by the terms and conditions of the agreement with local NGO.

Implementation Schedule: Activities

Durations (Weeks) Month 1 1

2

Month 2 3

4

1

2

3

4

First level talks and paper works Identification of the village, Site and location Identification of local Entrepreneur Installation of Lantern Charging Station Capacity

building

of

the

NGO/

entrepreneur/Community Process of renting and monitoring starts

Guidelines for the village selection in LaBL Project are: Village should be easily accessible at all the time.  Village may be electrified, de-electrified or un-electrified but the felt need for the usage of solar lantern must be there at household level and also at entrepreneur level (e.g. village haats, shops etc.)  Felt need should be for at least 15-20 days in a month and household should be willing to spend Rs.2-5 per day for taking the lantern on rent.  The Model would possibly be more successful in village which already has ongoing entrepreneurial activities, presence of self-help groups or any other livelihood and rural development program me.  Villagers must have the willingness and the capacity to pay changing.

The key stakeholder in the campaign plays the most important role in advancing the cause of the campaign. He/she uses the illumination from the solar lantern to facilitate his/her daily activities and also empowered to facilitate the education of his/her children, initiate livelihood activities, and have better access to health and sanitation facilities. The user pays a rental to the entrepreneur for managing the charging station. The campaign follows a stringent monitoring and verification model. At the ground level, the entrepreneur is responsible for maintaining daily record of his/her business. This data is compiled monthly and sent to the campaign anchor, who in turn will send the data to TERI. A central

database is maintained at TERI and is used to monitor the various aspects of the campaign. A part of the data will also be available through the LaBL website.

Socio-economic benefits: The local Entrepreneur running the village model earns decent Income from its operationsLivelihood opportunity creating the financial opportunities for the entrepreneur. Thus apart from providing reliable and ensured lighting to households at an affordable rate, the Campaign also facilitates entrepreneurial development among rural communities. This campaign provides excellent opportunity for public-private-people-partnership (P4) wherein the private sector can enhance the effectiveness of developmental schemes of the government, particularly in health, education and livelihoods sectors, by providing lighting through the LaBL. For instance, the government supports the rural health workers; a solar lantern will help them in doing their duties effectively, particularly when attending to medical emergencies at night. Similarly, the hostels for tribal children which are funded under the universal education programmes of the government can be equipped with solar lanterns to help children in studying at night. The community, represented by the entrepreneur and users of lantern, in turn, can contribute towards operation, maintenance and sustenance of the Campaign

Financial Viability: The LaBL campaign runs on a sponsorship and partnership model, wherein TERI seeks donations from likeminded individuals and organizations to cover the cost of the solar lantern. An individual can sponsor one solar lantern while an organization can sponsor the entire village (package of 50 lanterns) at a contribution of Rs 3600 and Rs 3, 00,000 respectively. With a fee-for-service delivery model a solar charging station is set up by TERI which is operated and managed by a village entrepreneur. This not only provides an employment opportunity but also makes the overall process sustainable. The entire cost of setting up the solar panels, equipments, training to the entrepreneur is borne by TERI. What makes TERI believe in the success of the project is that a rural household would be willing to spend Rs 2-5/day for using the solar powered lamp. This is derived from the fact that an average rural household consumes 4-5 liters of kerosene per month. This amounts to 5*Rs 10 = Rs 50 a month. As per the implementation strategy of LaBL, the village should have sufficient number of people willing to use the lantern for 15-20 days on an average. The charge for renting the charged lantern depends upon the

population of the village. As per the website of TERI the implemented areas have 354 household on an average. LaBL implemented areas State

Household Population

Remarks

Dupali

AP

875

5000

Electrified\Erratic

Berakuchi

Assam

85

448

Unelectrified

Daskin Dimoria

Assam

225

1213

Unelectrified

Sahsoul

Bihar

115

580

Unelectrified

Jhamvu Vas

Haryana

188

1203

Electrified\Erratic

Chapri

Jharkhand

150

1000

Electrified\Erratic

Chakdoha

Jharkhand

150

600

Unelectrified

Mahtabera

Jharkhand

71

404

Unelectrified

Bagapatia

Orissa

78

392

Unelectrified

Khasadiha

Orissa

60

256

Unelectrified

Kusabenti

Orissa

69

305

Unelectrified

Banganga

Rajasthan

96

780

Unelectrified

Jodhula

Rajasthan

108

951

Unelectrified

741

3923

Unelectrified

1116

5777

Unelectrified

1096

5734

Unelectrified

811

4031

Unelectrified

354.94118

1917.47059

West Harendranagar

Bengal West

Gangadharpur

Bengal West

Govindorampur

Bengal

Daksin

West

Kashiabad

Bengal

Average

Illustration- 1 If we compute the expenditure of a family for solar lantern for 20 days it amounts to 20*3= Rs 60. This cost is more than what he was incurring on kerosene for a month. The remaining 10 days will also add to his expenditure. However the solar lantern brings in the intangible benefits of better lighting and clean ambience. Thus individuals can work for longer hours while the children can study for longer hours and that too in a smokeless environment.

a) TERI- The infrastructure cost of setting up the project in a village is between Rs 2.5 – 3 Lakhs. This includes the cost of solar lanterns, solar panels, charging equipments, batteries etc. Each village has 50 lanterns to be given on a rent. The amount charged for renting the lanterns is shared between TERI, local NGO and the entrepreneur. Assuming that TERI gets 80% of the revenue earned from a village where on an average Rs 3 is charged for renting the lanterns the break even will come only after 5 years

Installation cost/village

= Rs 2, 50,000

Total lanterns in a village

= 50

Rent per lantern/day

= Rs 3

Total Rent collected/day

= Rs 150 (Assuming all lanterns are rented)

Revenue collected/year

= 150*30*12 = Rs 54,000

Share of TERI

= Rs 43,200 (80% of revenue)

Break even in years

= 2, 50,000/43200 = 5.78 years

Illustration – 2

b) Individual Household: - Going by the expectation of TERI a household will shelve Rs 720/year for availing the benefits of the project. Thus in 5 years he will shelve out Rs 3600 for lighting purposes. Given that organizations like NEST India* and SELCO** providing the solar lantern along with the solar panel close to Rs 1500, the individual can not only own the lamp but also save a potential Rs 2100 during the same period.

*NEST India- http://www.youtube.com/watch?v=kmf_ZEQGKOU&feature=related ** SELCO- http://www.youtube.com/watch?v=cVQJI5fNqbI Both NEST and SELCO is Ashden award winner, for sustainable renewable energy solution

Moreover with the Rural Electrification and other competitors like SELCO and NEST also in the renewable energy space it will be interesting to see the financial feasibility of the project on a long term.

Technical Feasibility: The LaBL project uses a solar lantern which has two lighting options, CFL for evening operations and LED for overnight operations. On an average it can provide 4-5 hrs of CFL lighting. The lantern is easy to use and is robust to last longer. However one constraint of the project is that it is dependent on good weather conditions. Since the solar panels are mounted on the roof top, rough weather conditions can damage the panels. Similarly cloudy conditions can too affect the smooth operations. With the government pushing hard to eliminate the rural and urban divide a major thrust is on telecommunications. With the emergence of mobile industry this seemingly impossible task seems to be achievable. The LaBL project could have added towards this initiative by providing some mechanism wherein one could recharge his mobile phone through the solar lantern. This could have impacted the information flow in the village to a great exchange thus adding one more feather to its cap. Easy access to information can improve socio-economic conditions to a great extend, thus increasing the impact of the LaBL project. The program is being implemented in coordination with the local NGO. The NGO is responsible for identification of a potential entrepreneur and then TERI provides the necessary technical training and skills to handle the operations. This extends over two weeks after which the entrepreneur takes over completely. Monthly reports are maintained and send to TERI by the local entrepreneur. The servicing of the LaBL lamps would be done by TERI, however not much information is available. On the other hand organizations like SELCO and NEST have devoted service centers which do a regular check every 3 months. The presence of SELCO and NEST is however restricted to South India.

Competitive Analysis: The LaBL project is fundamentally different as compared to most Solar lantern project being implemented or sold in India. No Solar Power project has gone to the extent of a rented model. However being the first in the country LaBL can have the first move benefit. Competitors can follow suit. No marketing survey so far has ever tried to look into the major criteria for designing the Solar Lamp as per the customers need. However the LaBL solar lantern tries to answer the different needs of the consumer as it has the provision of CFL and LED. CFL mainly used for studying, evening work etc, while the LED is used for just providing light to carry out daily chores i.e. Cooking, sweeping etc. The Joint research teams of JIMT (Jaganaath Institute of Management and Technology) & University of Illinois have come up with a specially designed solar lantern which will be available at Rs 950; however there is a constraint that it only provides LED lighting, which gives low light. However the project has not yet been commercialized but it has been patented by the students who intend to produce it under their own organization. Other commercial manufactures of solar lanterns are already selling lanterns to the rural areas and are at the same time providing them with after sales-service (SELCO). They have set up service centers to cater the after sales service and support.

“The rent for service model is not new in India. Local entrepreneurs have been using solar panels to recharge the batteries and rent it out to Vendors for their evening operations. However these operations have been confined to better off states like Karnataka, Andhra Pradesh etc. SELCO has some customers who have used the solar panels for similar activities“. LaBL has used these ideas from various sources to come up with the fee-for-service model that includes the rent for the lamp.

A brief of the organizations into the solar lantern business is given as follows: SELCO India: - It is a Bangalore based organization and it’s Managing Director Mr. Harish

Hande, has won the Social Entrepreneur award 2007 given by the Nand & Jeet Kemaka Foundation. SELCO, a social enterprise, provides sustainable energy services to under-served households and businesses in India. Through its 25 energy service centers in India, SELCO has brought reliable, affordable, and environmentally sustainable electricity to more than 75,000 homes and

businesses since 1995. From solar lighting and electricity, to clean cooking and wireless communications, SELCO aims to empower its customers by providing complete packages of product, service and consumer financing, in a very holistic manner. They have not only spread awareness about the benefit of using Solar Lanterns but have also convinced bankers for the giving out loans to customers to buy this product. NEST Ltd: - It is a Hyderabad based organization and the winner of Ashden awards 2005. Ashden awards are also known as the green Oscar award. Nest is a global player as manufacturer and supplier of solar lighting solutions. Ashden Light Award winning AISHWARYA solar lamp is the flagship brand of the company. Recently NEST bagged a contract of 1 million lamps to be exported to South Africa. The lantern manufactured by NEST comes with a price tag in the range of Rs 1200- 1500. It used local agents, SHGs to sell the lamps. It not only focuses on the rural masses but also the slum dwellers in cities. JIMT

&

university LaBL

NEST

Tata

BP SELCO

of Illionoi* Solar

Solar Panels

Yes

Yes

Yes

Yes

Yes

Rent

Yes

No

No

No

No

CFL

Yes

Yes

No

Yes

Yes

LED

Yes

No

Yes

No

No

Warranty

NA

Yes

NA

Yes

Yes

250/15-20

250

15-20

250

250

4-7 hrs

3-4hrs

6hrs

3hrs

Servicing

No

Yes

No

No

Yes

Life

10

5

2-3 years

5

5yrs

Cost

3600

1500

950

2600

NA

Lumen Light duration/Charge

4hrs

Tata BP Solar: - Tata BP Solar is a Joint Venture between Tata Power Company, a pioneer in the power sector and BP Solar one of the largest Solar Companies in the world over the years; Tata BP Solar has built on this rich lineage to become one of the largest Solar Companies in Asia. Tata BP Solar has the distinction of obtaining ISO 9001 quality accreditation and ISO 14001 environmental standards accreditation from BVQI, London. It has a range of product powered by solar energy and the basic entry price for a solar lantern is Rs 2600. The shop which sells the solar lantern also provides service and each solar lamp comes with a warranty period of one year. According to the shopkeeper of Tata BP solar shop in Bhubaneswar, most of the solar lanterns are bought by rural population in remote areas and they don’t always go for the entry level solar lantern but the higher version priced at Rs 5500.

As per the conversation with one of the officials of TERI, the LaBL project is a social project and TERI doesn’t get any revenue from the setup. The revenue sharing is entirely between the NGO and the village entrepreneur. The NGO needs the money for keeping a reserve for the regular maintenance of the infrastructure. Thus the project should not be assessed from a business perspective. However it is noteworthy that how long the project runs on sponsorship model. Thus the assessment has been made to take care of the sustainability of the model. The model can also create problems at the village level between the NGO and the villagers as only one of them will get the benefit of managing the setup and using it as a source of revenue. This can lead to disrepute of the NGO working in the region.

LaBL Globally: Besides India and South Africa less developed East Asian countries like Laos, Cambodia, Indonesia and Myanmar are also to be included soon. “Rural Indonesia will also be covered under the plan, but we want to implement it first in India,' said Dr Pachauri, who is also head of the UN Intergovernmental Panel on Climate Change, which shared the Nobel Peace Prize with ex-US vice-president and leading environmental activist Al Gore. Later when successful in India it will be implemented in other countries. Grants and funds have been constantly pouring in to support the project from across the world. This includes organizations like DFID, HSBC, and Swiss Agency for Development Cooperation etc who have sponsored for 2-4 villages.

Environmental Benefits: The project promises local and global environmental benefits. Each solar lantern with an average life of 10 years would displace 500-600 litres of kerosene oil, which when burnt would release 1.5 tonnes of CO2. Moreover it would provide better illumination in a smoke free environment. This would have direct impact on the health conditions. Adding to this the solar lantern saves approximately 200KWh of electricity at the user end, which is translates in 250KWh of electricity at the production end given the distribution and commercial losses. Thus a solar lantern in its life of 10 years saves about 2.8 tonnes of CO2 to be released in the atmosphere. This carbon savings can also be traded. The issue of Climate change is getting hot and countries are signing up the agreement one by one. However this can also bring in economic slump. One way to tackle this problem is to switch to green energy, solar energy being one of them. Presently Government of India is giving huge subsidy on kerosene of upto Rs 1415/litre. This amounts to Rs 500 billion. If the government gradually directs this fund for giving subsidy on solar projects, this can prove to be more meaningful as 33% of the subsidized kerosene is being used for adulteration purposes presently. If such a change in policy is brought in it will accelerate the growth of such projects all across the country. Economic growth will be boosted with longer working hour in villages. It will also have a large impact on the carbon emissions and improved health conditions in these areas.

Conclusion: Not much has been written about LaBL except news regarding it. It is yet to be seen how the project does performs in the initial years. It would be immature to judge the project as a success or a failure as it needs more time for such labeling. There is no doubt that this initiative by TERI is need of the hour and it tries to answer the need of a billion people living in darkness. However its feasibility and sustainability over a long term needs to be checked. With large differences in socio-cultural and economic environment it is a challenging task to introduce such project in rural areas. Not only does the project provides clean and better illumination to the households but also reduces the carbon emissions thus contributing towards offsetting global warming. Increased government and organizational support can increase the chances of the project to be a success. If only the government gradually directs the subsidy on kerosene towards these solar projects, it will increase the probability of the project to reach the needy household at the right time and right cost. Last but not the least a positive atmosphere is building wherein technology and management is joining hands to answer the needs of the energy deprived population in a sustainable manner.

References 1. 2. 3. 4. 5.

6. 7. 8. 9. 10. 11. 12.

http://teriin.org/ http://labl.teriin.org/index.php http://mnes.nic.in/ Climate Change-Solar energy Lighting up a Billion Lives- The Hindu Survey of Environment-2008 Akshay Urja-Renewable EnergyMay- June-2008/ Vol. 1 -Issue-6 March-April-2008/Vol.1-Issue-5 January-February/Vol.1-Isssue-4 http://www.straitstimes.com/Free/Story/STIStory_257429.html http://www.ncsu.edu/nano/documents/LightaBillionLivesatNCStateTERIVisitandWorkingSession_000.pdf http://www.businesswireindia.com/PressRelease.asp?b2mid=15302 NEST Solar Lanterns, http://www.youtube.com/watch?v=kmf_ZEQGKOU SELCO Solar Lanterns, http://www.youtube.com/watch?v=HGTO2Nm5lng&feature=related http://www.youtube.com/watch?v=l0Y6UeLqoD0&feature=related SELCO India Ltd, http://www.selco-india.com/ Solar NEST, http://www.solarnest.net/html/aboutus.html