HYDERABAD, India — THRIVE Solar Energy Corporation does more than make solar powered lighting products and solar systems. THRIVE is a socially-driven enterprise which bases all business decisions in the favor of their primary consumers: those who earn less than $2.50 per day and live in the most remote parts of the world. Sohrab Kakalia, THRIVE’s CEO for its U.S. office, recently explained the company’s Community Empowerment Business Model in an interview. It is unlike others in the business of solar powered products for the poor.
THRIVE Solar Energy originated in Hyderabad, India. It houses a research and development office in Fremont, California, home to many other battery technology and renewable energy corporations. Although Kakalia is based out of California, he spends most of his work abroad. His most recent trip was to the Philippines, where upwards of 15 million Filipinos across 7,000 remote islands have little to no access to electricity. Although THRIVE has distribution of its solar powered products throughout 15 countries, the headquarters for main product engineering, marketing, operations and development remain in India.
Kakalia explained that THRIVE first formed in 2001 as an NGO tackling the problem in India of 130 million children and their families depending on hazardous kerosene lamps for studying in the dark. THRIVE derives its name from a jumbled acronym standing for Volunteers for Rural Health Education and Information Technology. However, in an early project to distribute 20,000 solar powered lamps in Afghanistan, the founder, Ranganayakulu Bodavala, realized that the lamps were of no use after 3-6 months due to their low quality.
This prompted Bodavala to form a company to manufacture its own high quality and affordable solar powered products to benefit customers at the base of the pyramid, those whom economists define as the 4 billion people in the world who live in rural villages or urban slums and live on less than $2.50 per day. Of these, 2.3 billion people suffer from energy poverty with no access to reliable electricity. THRIVE recognizes that this represents a huge demand for alternative energy products.
Since 2007, THRIVE Solar Energy’s product mainstay has been its quality solar powered study lamps, which provides up to eight hours of light from a single day’s charge in the sun. These days, THRIVE has expanded its product line to include solar powered flashlights, mobile phone chargers, lanterns, water pumps for farms, building lighting systems and power generators, especially for rural clinics and schools.
Therefore, it is not only those who are poor who could benefit from THRIVE’s solar products. Indians who do have access to the electrical grid have to contend with regular blackouts. This is frustrating for small businesses and entrepreneurs who are trying to build India’s economy. India still uses coal to generate more than two-thirds of its electricity. Decreasing coal supplies are forcing power plants to shut down or run below capacity at a time when energy demands are at their highest. Memories remain fresh after a widespread blackout in July 2012 left more than 680 million Indians- double the population of the U.S.- in the dark for days.
India’s energy woes are familiar to many developing countries. As a result, the demand for alternative sources of energy like solar power is increasing and many companies are entering the industry to supply the demand. Instead of taking full advantage of the situation to maximize profits, THRIVE Solar Energy insists on a Community Empowerment Business Model. Kakalia explained that to keep its products affordable to all, it eliminates the middleman costs in its supply chain by manufacturing locally. As much as possible, it sources its raw materials and equipment locally. To date, THRIVE has two factories in India, one in Kenya, and another soon to be opened in Ghana, ensuring that the local economy benefits from the job creation. Kakalia believes that the local manufacturing model can be replicated in 50 other countries.
THRIVE’s Community Empowerment Business Model takes it one step further. The manufacturing facility in Andhra Pradesh in the southeastern coast of India employs 320 people, 260 of which are women. In many developing countries, it is an important poverty eradication strategy to empower women with employment as the benefits of it will act as a multiplier-effect on to their children and families. And to top it all off, the factory is also run entirely on solar energy.
Kakalia said that overall, the company aims to manufacture in the places where it needs its products the most. So while most solar lighting companies still source everything from China, THRIVE believes in manufacturing in multiple countries.
Additionally, Kakalia said that THRIVE Solar Energy does not practice “sell and forget.” Its Community Empowerment Business Model engages a “before sales” and “after sales” service: locals are hired to educate prospective customers about solar technology and the benefits of the solar products. After the sale, customers are supported with warranties and access to after sales service support. This in turn has provided employment of local village representatives. As THRIVE’s brand name and reputation grows, so do the sales of its larger and more expensive solar power systems, thus making it a sustainable business.
Whereas most businesses find the middle class to be more lucrative to deal with than the base of the pyramid, THRIVE has not lost its original sight for serving the poor. Kakalia stated that THRIVE stays as profitable as needed to make sure its products stay affordable for the base of the pyramid. Additionally, THRIVE has formed a One Child One Light campaign with the help of a number of sponsors and partnerships such as The World Bank, International Paper (India), Oxfam, Sonata Software, Save the Children and Compassion International. Today, 650,000 school children have received THRIVE’s higher quality solar study light. THRIVE is currently supplying one million of its solar study lights to students with the help of IIT Bombay across rural India.
THRIVE’s work has influenced local government officials in the Tribal belts of India (Northwest and Central regions of the country) to declare a kerosene-free state. 1.3 million families have benefited from solar home lighting systems thanks to affordable and subsidized financing plans. “The impact is faster when you work first with the local leaders,” said Kakalia. Buy-in with the locals, whether they are government officials or prospective customers, have been the key to THRIVE’s success.
For its work, THRIVE Solar Energy has received the honor of the World Bank and IFC’s Lighting Africa Development Marketplace Competition in 2006 and 2008. In 2009, it received the Lighting Tanzania award in partnership with Zara Solar Ltd., Tanzania. In 2012, THRIVE was recognized by a local Indian affiliate of CNBC as an “Emerging Socially Responsible Small-Medium Enterprise of the Year” Award. Currently, THRIVE’s products are sold in 15 countries. Over one million of its solar light shipped internationally in the year 2013 alone.
– Maria Caluag