Grameen Shakti

Our business strategies include:

• Offering attractive financial mechanisms to make RET affordable
• Developing awareness, creating an environment for forging community partnership
• Focusing on consumer needs instead of subsidies through innovative consumer friendly product development etc.
• Technology transfer and local capacity development
• Tapping into local market forces through entrepreneur development, green job creation, creation of new business opportunities and linking these to RET
• Focusing on women as main actors and entrepreneurs of change
• A de-centralized bottom up approach instead of centralized top down approach

Our expected social impacts include:

Women's empowerment, green job creation, poverty alleviation, CO2 emission reduction, promotion & dissemination of sustainable renewable energy solutions in Bangladesh, less deforestation, reduction of fossil-fuel imports, awareness creation etc.

To date we have sold:

• 718,146 Solar Home Systems (SHS)
• 391,142 Improved Cooking Stoves
• 20,094 Biogas Plants

Impact to date - so far we have:
• Employed 10,800 people as our direct employees
• Trained 10,922 technicians
• Provided training to 215,837 customers
• Built 46 Grameen Technology Centers (GTC)

Our work generates 162 Mw-hr green electricity per day and saves around a half million tons of firewood every year. All of these results have impacted a total of 4 million beneficiaries in the country.

Our government has set a target of reaching all of Bangladesh with electricity by 2020. Momentum has been created for solar power which our rural people have accepted wholeheartedly. Solar and other renewables are in position to play a very important role to complement government efforts to take electricity to all by 2020. We have not yet reached the penetration rate of mobile phones or televisions which have reached more than half the rural market. We have not yet reached the cost effectiveness needed to reach all rural income groups, especially the lower income group in large numbers.

Challenges:
1. There are more than 30 organizations engaged in the rural renewable energy sector. Except for a few, the majority have a very small client base. Cutting edge business culture is yet to develop in this field because of the prevalence of NGO culture. There has been very little incentive for innovation or new product development because most of the organizations depend on guaranteed soft loans from IDCOL.

2. The present practice of vast rural networks of branches and engineers translates into huge transaction costs and slow penetration rate. Lack of good communication, especially during the rainy season, constraints movements and increases transport costs. Seasonal variation in the income of rural people makes collection of installment payments difficult. This is not cost effective or feasible in the long run.

3. Training and retaining efficient human resources at the field level is also difficult. Incentives are low compared to the hard work. It is difficult for organizations to increase incentives in order to keep their costs low.

4. There is a lack of skilled engineers who can make cost effective and efficient SHS designs especially for productive applications.

5. Other major challenges are high battery prices and an inability to source quality materials or accessories cost effectively.

6. Huge taxes and VAT are charged on imports of all raw materials except solar panels. This increases the cost of local manufacturing of solar accessories, which in turn increases the cost of Solar Home Systems.

7. There have been very few incentives from the government to popularize RET except for long term soft loans through IDCOL. Most practitioners are over dependent on IDCOL with no diversification of funding. Mainstream financial institutions are yet to take a major interest in the RET sector.

Grameen Shakti uses an integrated sustainable entrepreneur based business model to bring clean and affordable energy, income, health, and economic development to rural Bangladesh. In response to the special energy needs of the rural people, Grameen Shakti has developed a sustainable integrated model that facilitates income generation instead of reliance on subsidies, creates local community support and capacity development allowing the people to solve their own problems instead of creating dependence on others.

This is a model which brings technology to the people by coupling innovative financing with technology transfer through effective community involvement. The key elements of the integrated sustainable entrepreneur based business model are:

1. Providing no direct subsidies but innovative financing schemes based on installments that make the technology affordable and cost-effective compared to traditional energy alternatives, and create ownership.

2. Creating awareness for renewable energy technologies through motivational programs and social activities that involve the community. For example, Grameen Shakti organizes special programs for school children to increase their awareness about renewable energy technologies.

3. Gaining the trust and confidence of the rural people by focusing on consumer needs and providing high quality services including consumer friendly product design, installation, training of clients on proper use of technology, free monthly after sales support, and strict quality control. Our consumer friendly approach also includes a buyback system allowing customers to return Solar Home Systems at depreciated prices if their area is connected to the grid.

4. Training and employing young people at the community level. Our vast and growing network of currently 1,348 offices at the community level and around 10,000 social engineers helps us to decentralize our activities, transfer the technology to the rural areas and build rapport with the rural people.

5. Linking the technology to income generating activities and creating opportunities for entrepreneur development. We encourage micro-utility initiatives allowing the technology owner to generate additional income. In addition, we encourage community based manufacturing by purchasing and assembling accessories locally.

6. Focusing on women as the main actors and entrepreneurs of change. Grameen Shakti has set up already 45 Grameen Technology Centers and we have trained and empowered already over 3,500 women who are working independently as renewable energy technicians and entrepreneurs.

Grameen Shakti is investing in capacity development and R&D. We are:

• Developing a sustainable framework for developing human resources through country wide vocational centers, training institutes etc. The focus should be also on developing export quality human resources. This would also provide an incentive for private companies to participate with the maturing of the sector.

• Focusing on R&D to adapt and develop innovative technologies. We should have an innovation lab in all major universities which should be linked with international institutions and research institutions. Government should create an incentive structure such as competitions and awards to promote R&D.

• Facilitating new ideas such as installment collection through mobile phones and prepaid cards to scale up and reduce transaction costs.

We have a strong grassroots network to provide after sales service, right at the doorsteps of the rural people. Rural people are unlikely to invest in a technology which is not durable and has no after sales service available. We focused on creating a vast network of rural engineers who developed one to one rapport with their customers. They visit each client’s home monthly to offer free after sales service for nearly 3 years. We offer a long term warranty (i.e. 20 years for panels, 5 years for batteries and 3 years for charge controllers etc.) for SHS plus a buyback option under which a client can return his/her system if the area becomes grid connected. This is a wonderful weapon to explore renewable energy technologies in the rural areas. A rural network of women technicians has been created to assemble and repair solar accessories to ensure low cost, quick effective repair, maintenance services and availability of spare parts, right at the doorsteps of the users. They also train customers on how to take care of their systems and provide them with training manuals. This means well kept systems, minimum repair and maintenance costs for both clients and us.

Capitalizing on community forces:
One reason for this success has been the active involvement of the rural community. Rural people were completely unaware of renewable energy technologies. Winning rural confidence played a vital role. Engagement of community leaders and organizing demonstrations helped a lot. Special focus was placed on creating a local stake in these technologies – social and economic issues were significant. In order to keep the goodwill, the POs offered special packages for rural schools and madrasa. The introduction of scholarships for school children of solar users and design of special programs for rural school children to raise awareness of renewable energy in the next generation were also done. Installation and maintenance of the systems, and creating an understanding of the local market and customs were accelerated by the local youth. The setting up of village based technology centers to assemble all solar accessories, creating jobs for local women, was also essential. This bottom-down, decentralized approach has helped us to keep operating costs low, and gain acceptance by the local communities. GS was unique in that sense that we not only provided clean energy solutions, but also created powerful social and economic forces for their adoption. For example, GS created jobs for young men and women who could earn enough in few years to install a system themselves.

Building institutional capacity:
Fully developing the infrastructure for renewable energy technologies in Bangladesh requires more than just putting solar systems on the market. Many projects in the country also work to remove the barriers to more widespread use of renewable systems and build the skills along with the partner organizations. These POs facilitate a package of interventions to support Bangladeshi institutions in overcoming major market barriers. These institutions include rural electricity cooperatives, community-based organizations, NGOs, microfinance institutions, and private-sector groups.

Women as active agents of change:
Grameen Shakti has set up village based GTCs to train and empower young women to become renewable energy technicians and entrepreneurs. This was one of our most innovative and successful programs. These centers managed by women engineers train rural women in renewable energy technology, enabling hundreds of rural women to earn extra money. These women who belong to most deprived class of their communities have learned skills on assembling, installing and repairing and maintaining one of the most up-to-date technologies in the world. They assemble and repair solar accessories such as charge controllers, mobile chargers, inverters etc. This has enhanced their social and economic value in their communities and contributed to women's empowerment. These women are the backbone of our local production and repair network helping rural people access cost effective, efficient services right at their doorsteps. They are powerful voices motivating other women, their families and neighbors to install solar and other renewable energy technologies.

Appropriate product design & diversification:
GS with other POs promotes and designs high quality, innovative products which meet the diversified needs of rural clients. The customer tailored packages ranging from 10 to 135 watts allow a rural client to save energy, generate income and become the owner of a system after 1 or 3 years, at the same cost of kerosene. The standard 50 watt system allows a rural client enjoy 4 bright lights, watch television and power mobile phones. For the lower income group, there are 10 to 20 watt systems and a micro-utility model which allows sharing of one system by many. Depending on the income of a rural client, the design products vary to power computers, DC fans, refrigerators and income generating activities.

A listening culture coupled with strong quality control:
GS remains tuned to local needs by listening to our staff and clients. The strong audit and MIS system help GS seek new opportunities, meet challenges and forge ahead. We are flexible and localized in our approach, but without sacrificing quality. SHS registered exponential growth after the advent of IDCOL with the number of service providers, suppliers, and manufactures multiplying. Bangladesh gained the capacity to manufacture all solar accessories expect for the solar panels.

None noted

An exponential demand has been created among rural people for solar power and renewables. This is mainly due to the increased price of kerosene, diesel, and lack of grid connected power, decreased price of solar energy, and especially due to growing aspiration and economic diversification of the rural people. Dependence on land or agriculture is reducing, cattle is being replaced by power tillers, tractors etc. Nearly 60% of the rural people own a television.

Technical progress has reduced cost, increased efficiency and diversified the application of solar energy. For example, use of LED and CFL has reduced the cost of solar power, while increasing its efficiency. Pico systems (1 to 5 watts) can power 2 or more lights while charging mobile phones. This has brought solar technology within the reach of lower income groups. LED-based systems have resulted in a dramatic decrease in costs. Factors to reduce cost include efficient loads, innovative batteries, and lower module cost.

We can use biogas technology not only generating cooking gas, but also for generating pure methane gas which can used for running vehicles, power pumps and other electronic equipment. This will facilitate rural development. Though some large sized biogas plants in Bangladesh are generating electricity, it is only for meeting the owners’ own energy needs. We can scale this up if we can purify the gas and place it in cylinders. We can use all types of wastes ranging from animal dung to crop residues for this purpose. This is successful technology which has been implemented in India, Sweden and many other countries. Our Government which is promoting independent power generation should also facilitate this type of technology. We can use biogas technology in urban areas to convert wastes into electricity, gas and organic fertilizers.

Again Biogas technology takes part in the global struggle against the greenhouse effect by reducing the release of CO2 from burning fossil fuels in two ways. First, biogas is a direct substitute for gas or coal for cooking, heating, electricity generation and lighting. Second, the reduction in the consumption of artificial fertilizer avoids carbon dioxide emissions that would otherwise come from the fertilizer producing industries. By helping to counter deforestation and degradation caused by overusing ecosystems as sources of firewood and by melioration of soil conditions, biogas technology reduces CO2 releases from these processes and sustains the capability of forests and woodlands to act as a carbon sink.

Improved Cooking Stoves can be one of the most cost effective devices to stop indoor air pollution and reduce deforestation. In this connection, GS has already constructed 373,969 ICS through local technicians. We have received a huge positive response from women because of the 50% reduction in fuel costs and smoke free cooking. Various POs could disseminate 10 million cooking stoves by 2015 if proper initiatives are taken.

Diversification of rural economy concurrent with increasingly efficient solar systems has created a market for larger Solar Energy System applications to power pumps, mini/micro grids for SMEs, internet kiosks etc. The rural farmers suffer from power shortages during the irrigation season and replacement of electric power pumps by solar pumps would save the grid system of 800 MW load on the national grid. There is also increasing demand in the rural health and education sectors for Integrated Energy Systems to power lights, computers, TVs and refrigerators etc. Solar power can fill the niche. Solar power can also be used for early warning systems, emergency lighting, water desalination etc. in disaster zones. Increasing load shedding in the urban areas has made solar power an attractive option for urban dwellers. 1 to 10 KW systems to power lights, TVs and other appliances in domestic and commercial sector can easily create a niche, alongside diesel generators and Instant Power Supply etc.