SELCO : The Solar Electric Light Company

Mayank Prabhakar - H13086

Roopan Roy John - B13168

Energy Services in India

400 million Indians have no access to electricity.
More than Half of rural households are not connected to
state electricity grids

Chronic cooking fuel shortages

Lack of power to undertake

World Bank Report

Reliable Energy Services leads to

Development of Family.
Upliftment of Quality of Life.
Better Education.
Healthy Working Conditions.
Increased Income.

Income Generation Activities

Lack of Reliable Lighting
Electricity Deficit
Distribution Constraints

Paradox
People who really need
alternate energy options cannot
procure them.

Selco
SELCO, for-profit venture, was established in 1995 to disprove
the following myths:
Myth 1. Poor people cannot afford sustainable technologies.
Myth 2. Poor people cannot maintain sustainable
technologies.
Myth 3. Social ventures cannot be run as commercial entities.

Value Proposition
Including the financing requirement in the overall product package.
Innovate not only in the usage of technology, financing methodology, modes of marketing etc., but also in
ways of linkage innovation.

Business Model :A for-profit Social Enterprise

Business Model: Innovative Linkages

Poverty Alleviation & Energy Services
Poverty
Alleviate By

Energy Services
Need

Increased Income
Generation
By
Income
Generating
Activities
Surely Require
Energy Services

Technology & Energy Services

Sustainable
Technologies
Need to be provided By
Reliable Supply
Chain

Business Model: Innovative Linkages

Financing End User Energy Services - Technology
Finance

Third Party

Sustainable
Technology
End User

Sustainable
Technology
End User

Energy Services

Energy Services

Business Model: Innovative Linkages

User Payment Sources & Loan Repayment

Product Design
A SELCO photovoltaic solar home system consists of a panel, a battery and a charge regulator.
Panels charge during day and works for 12hrs without being charged.

Philosophy
Customized to meet the expectations of the
specific clients

Categories

Conceptual Tools to measure/assess the

impact and effectiveness of Social Enterprise
Ashoka Measuring
Effectiveness
Questionnaire

This tool aims to understand the impact of entrepreneurs

receiving funds to do social sector work.

BACO Ratio

This tool quantifies a potential investment's social output

and compares it to the universe of existing charitable
options for that explicit social issue.

Base of Pyramid Impact

Assessment Framework

Base of Pyramid (BoP) Impact Assessment Framework is a

method that helps organizations better understand and
improve their on-the-ground poverty alleviation impacts.

Need for innovations

Q. Why do the under served need Innovation?

Q. Why has it not happened?
Financial Risk
Technology Innovations
Lack of Commitment

SELCO = Technology + Financial Instruments

Expanded SELCO Vision: Moving beyond Strictly Solar
Sustainable
High-Quality
Branded
Consumer Durables
Empowering
customers

Product

SELCO has the potential to utilize its

distribution network and customer
relationships to be at intersection of
product, service, and finance:
Selling high quality, branded consumer
durable products coupled with after-sales
service and consumer financing

Service

Finance

Installation and aftersales service at the

Customer Home on
all company products
sold

Matching the
cash-flow

Organizational Framework

Philosophy
MYTH #1
The poor cannot afford technology

MYTH #2
The poor cannot maintain technology

MYTH #3
Social ventures cannot be commercial entities

Growth Story
2013

160,000

2012

135,000

2011

121,000

2010

105,000

2009

92,000

2008

81,000

Number of
systems installed
by Selco

customization
Wants can be standardized;
needs have to be customized

matching needs + market linkage

The moral of the story is if you can create a product that matches
[people's] needs, it does not matter how poor [they] are, there will be
a market for it

an increase in productivity, not income; She has no market for those

extra baskets. There is no market linkage.
* wants SELCO to address the entire supply chain

surrounding a product

Users Reasons

Financial Institutions Role

Lighting for Study

Powering small motors
For Income Generating activities
Cleaner
Safer
No maintenance

Accessing the credit worthiness of the client

Creating the appropriate financial product
Partnering with SELCO to meet the needs.
Collection of loan installments

SELCOs Role

Demo of Technology
Accessing the needs
Developing the need based product
Partnering with local financial
institutions
Installation of the system
After Sales Service

Typical chain of an energy delivery services setup of SELCO.

INVESTORS

: Matching money with mission

Continuity
Tailor-made Payback/ Financing(Creative Financing)
Employees
Designing products for the poor (tailor-made solutions)
Innovative customization
Building Assets for the poor

Scaling Up & Challenges

Is it about numbers in Decentralized energy?
Lateral or deeper?
Customization vs. Commoditization?

Big SELCO or numerous SELCOs

Replicate or scale?

Leadership and Personal Qualities

Empowering the poor
Bank accounts / solar loan/ Siddi community (gujarat/karanataka)

Point of View: BOTP as an asset and not a market

Views BOTP as money goes IN, product comes OUT

Th!nk Sustainable
Cross pollinative innovation ~ light in a tiffinbox
Multi-pronged problem solving!

Leadership and Personal Qualities

Open source
Model: Replicate, rather than scale up
For and By the people who need it
Solution is the best form of protest
Hands-on Leadership
Attention to detail
Emotional/Empathetic