A “D.light” for Ending Poverty

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SAN FRANCISCO — D.light manufactures and distributes durable, solar-powered lighting products to customers in the developing world who only make $4 to $6 per day. Since starting up in 2007, d.light has sold over 6 million of its solar powered lamps in over 40 countries, and has raised a total of $40 million in capital. Out of the 2.3 billion people in the world who suffer from energy poverty with no access to reliable electricity, the socially-minded company has a goal of empowering 50 million people by 2015 and 100 million by 2020. For d.light, its success hinges on the partnerships it forges with organizations that serve their customers, such as the Renewable Energy Enterprises Foundation in the Philippines, Buen Power in Peru and Solar Sister in East Africa.

The Base of the Pyramid refers to the poorest of the poor in developing countries or those that live in rural villages or urban slums. That is about 4 billion people who live on less than $2.50 per day. There are many businesses like d.light that wish to improve the lives of the world’s poor with their products and services. The World Bank and the International Finance Corporation have identified over 29 companies that offer quality solar-powered lighting products, including d.light’s. Outside of the 29 approved companies, more cheap and lower quality solar lamps are flooding the market. Most people in the developing world have never heard of solar-powered lamps; many aren’t able to distinguish which products are best.

D.light’s solar powered lamps charge on their own during the daytime, shine for at least four hours at night and are designed to last more than five years. The standard model costs between $20 and $30, which poses a very high upfront cost for customers who only earn about $100 a month, 70 percent of which goes to food. One question is whether or not a $30 investment would indeed positively replace the $2 to $3 monthly cost in kerosene, candles, batteries and whatever else might be sacrificed for the purchase. Another question- if it breaks, can it be fixed? Life in rural areas does not allow the convenience of a near-by home improvement store. Base of the Pyramid customers want risk-free solutions, not cheap products.

This is where collaborations with organizations like the Renewable Energy Enterprises Foundation (REEF) are vital. Frontline organizations like REEF help d.light set up distribution channels that reach rural villages and teach potential customers about an unfamiliar technology. REEF’s Family First Program addresses energy poverty for 1.2 million Filipinos who lack access to electricity. The program identifies the poorest families living off the electrical grid in the Philippine provinces of Zambales and Bulacan. Such families rely on solid fuels such as wood, dung, crop residues, charcoal and kerosene for both light and for cooking with crude stoves or open fires. To date, the Renewable Energy Enterprises Foundation has been able to distribute d.light solar lamps and environmentally friendly cooking stoves to almost 2,000 families in need. By offsetting 40-to-60 percent of a family’s cooking and lighting expenses with renewable energy and sustainable practices, the families can divert funds to healthcare and education.

Cross the Pacific Ocean and land in Peru, and there you will find Buen Power working in the local communities high up in the Andes Mountains. Approximately 20 percent of all Peruvians, or 4.2 million Peruvians, live without power, especially in the Andes. Buen Power recruits teachers who typically procure second jobs to mitigate systemically low salaries and trains them to conduct educational sessions about the solar technology in the distant communities. D.light solar lamps are sold  at an affordable, subsidized cost to residents, and 10 percent of the profits go to giving away the lights for free to those in dire need. Buen Power aims to bring solar lights to approximately 10,230 low-income Peruvians in the near future. D.light solar lamps will help the people of the Andes who live at altitudes where the sun sets at 6 p.m. year-round enjoy an extra four hours of productive, waking hours every day. This could lead to more output of women who weave artisanal clothing from Alpaca fibers, more study time for the children, savings gained from not having to purchase expensive batteries to power flashlights and improved air quality in the homes from no longer using kerosene lanterns for light.

In East Africa, d.light collaborates with an NGO called Solar Sister. Solar Sister is a deliberately woman-centered direct sales network of 3,000 Solar Sister Entrepreneurs. Its aim is to sell 315,000 solar lights and mobile phone chargers in the coming years across Uganda, Tanzania and South Sudan, where there is no light source after dark beyond firewood and burning grass. To date, over 84,000 people in the hard-to-reach areas have benefited from d.light’s solar power products. Solar Sister Entrepreneurs have been able to double their household income, of which 90 percent are reinvested back into her family. Additionally, in Uganda, the problem of high upfront cost of purchasing a solar lamp for the base of the pyramid customer is being addressed with a flexible, pay-as-you-go finance model. A typical consumer can pay off the device in less than one year with the added bonus of being able to use the product while paying it off. Overall, the benefits of solar lamp usage have led to a 30 percent reduction in household expenses towards expensive kerosene. Furthermore, children get three hours more study time every day.

Globally, 2.3 billion people live without electricity. Socially-minded businesses who wish to serve these customers realize that selling their products via retail will only work when the product becomes widely known and trusted. Therefore, marketing and education is essential to generate future sales with the base of the pyramid. D.light has found innovative ways to distribute its socially and environmentally beneficial solar products to people suffering from energy poverty. And it is reaching more at an exponential rate. D.light is growing at the rate of one million users per month. It stands a pretty good chance of reaching its goal of empowering the lives of 100 million by 2020.

Sources: Buen Power, Hystra, Lighting Global, REEF, Solar Sister, USAID, D.Light
Photo: What Design Can Do!

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