Bringing sustainable light and enduring hope to African women, social entrepreneur, Katherine Lucey, founder and CEO of Solar Sister, shares her wisdom on building a renewable energy movement with some of the poorest communities in the world.
What Solar Sister is all about?
Solar Sister is an innovative social enterprise that empowers rural women in Africa with economic opportunity and clean energy. With an Avon style for-women, by-women business model, Solar Sister solves the problem of ‘last mile’ access to clean energy and brings solar technology right to the women’s doorstep. Using their natural social networks of family, friends and local community, the women provide critical access to clean energy solutions.
Solar Sister’s sales proposition is simple: at a starting cost of about $20 for a solar lamp, customers get a lighting source that is 8 times brighter, cleaner and safer than piecemeal kerosene – the cash expense is paid back by the cost savings of buying kerosene in 2 and a half months. This translates into brighter light for families and savings of more than $100/year on fuel.
Where did the inspiration for Solar Sister come from?
1.6 billion people on the planet don’t have access to electricity. They rely on kerosene lanterns and candles for light. They spend up to 40% of their family income on energy that is inefficient, insufficient and hazardous. Widespread use of kerosene has an adverse impact on local air quality as well as on global climate change. Poor lighting, smoke and rudimentary lanterns are responsible for large number of infections and burn injuries. Solar Sister creates critical, lasting change in the lives of women and girls living with the devastating effects of energy poverty.
A founding story of Solar Sister is the story of Rebecca, a rural farmer in Mpigi, Uganda, who chose to put a solar light in her chicken room. Rebecca knew that chickens only eat when they can see, and by increasing the hours of light, the chickens ate more, and were healthier. They laid more eggs, improving the economics of her operation and providing income that allowed her to buy seeds, and eventually a goat, pigs, and even a cow.
From the simple improvement of a single light, Rebecca built a farm and eventually a school where she teaches children to read and write, and also how to do small plot farming. Realizing that women like Rebecca have the power to improve their own lives, with a little bit of light and opportunity.
How did you get started? Did you receive foundation or angel investments?
Solar Sister is a market based program, with revenues from sales of solar lamps providing the engine for economic growth. We are a social business, using the power of the market to achieve a social goal of distribution of clean energy technology. Today, even though portable solar LED lighting technology is an affordable solution; lack of access has kept the products from being adapted by rural households living in the dark. Ingenuous clean energy products for the base of pyramid markets are little good if the poor can’t use them.
Solar Sister’s pilot project in Uganda was recognized as an innovative approach to empowering women with technology in Ashoka Changemaker’s Women|Tools|Technology competition. ExxonMobil Women’s Economic Opportunity Initiative is generously providing the support to scale the demonstrated program success in Uganda in 2011 and replicate it in a country in West Africa in 2012.
How do women get into the program? Why women and not men?
Solar Sister reaches out to the women who would otherwise not have an opportunity to become entrepreneurs and provides them with a holistic package of working capital, business training and marketing support. Women represent 70% of the rural poor most affected by energy poverty. But more importantly, women are primarily responsible for energy usage at the household level. Clean energy technology will not be adapted on a widespread basis if women are not part of the solution.
Creating a program that engages women as participants in the distribution of clean energy is both effective change and a solid investment. Investing in woman is not just the right thing to do, it’s the smart thing to do. The women may not have economic capital to invest in a business, but they do have their social capital – their networks of family, friends and neighbors. Together we are successful.
The strength of our enterprise solution comes from the women themselves, it is their own ingenuity and commitment that builds their business, we are just offering them the opportunity to help themselves. Even small amounts of electricity can dramatically improve the lives of women living with acute energy poverty. Creating economic opportunities for women in turn has a multiplier effect on social and economic progress of their communities and our world.
Our local staff and strong grassroots partner organizations like the Mother’s Union of Uganda and Women for Women play a key role in orienting, recruiting and training the rural women to the business opportunity presented by Solar Sister. By offering them a program based on micro-consignment, the women are provided with a ‘business in a bag’ that includes inventory, sales training and marketing support.
Since they are selling on consignment, they do not have to pay for the inventory until they sell it, earning a commission on each sale and creating sustainable businesses. All profits are invested back into growing the network of Solar Sister Entrepreneurs, creating a sustainable business with a growing impact.
Why use a solar entrepreneur format rather than just donating the equipment?
Tapping the power of the markets to drive widespread distribution of clean energy technology provides a scalable solution that can achieve global impact. When you give a lamp away, it ends there. One person has benefited. But when you empower an entrepreneur by giving her the tools she needs to build a business that provides lamps for the community to purchase, it creates a sustainable solution. The entrepreneur reinvests her sales revenues into new product, creating a multiplier of impact as she turns her inventory over again and again. And, it provides economic opportunity that lifts the entrepreneur out of poverty. It is the ‘teach a man to fish’ adage with an entrepreneurial (and feminine) twist.
Traditional nonprofit charitable approaches are not sustainable nor do they have the capacity to scale to the levels required to address the most important issues of the day, including energy poverty. There is also a need to shift the traditional development focus of seeing the women as recipients of one-off handouts to empowered individuals capable of bringing a positive cycle of change to build a better life for themselves and their communities.
Solar Sister’s micro-consignment model reduces the start up risk for the entrepreneur by providing the initial inventory to the entrepreneur without requiring a full upfront payment. The entrepreneur sells the inventory and then pays for it only after the sale is made and she has cash flow. Because the inventory financing is bourn by Solar Sister, rather than the individual entrepreneur, we can achieve better financing rates and can diversify the cash flow risk across a broad portfolio of entrepreneurs.
The entrepreneur is supported in building her business without having to bear additional risk. The arrangement aligns the interests of Solar Sister with the interests of the Entrepreneur while providing a market based gender inclusive solution to increase energy access in Africa. Our model is sustainable and scalable across the developing world in areas affected by extreme energy poverty.
Do the women pay back the investment? If so, why?
Leveraging the power of the market place, a one time investment in a Solar Sister Entrepreneur creates a chain reaction of social impact as the Solar Sister Entrepreneur turns over her inventory again and again. To establish a single entrepreneur requires an investment of approximately $500 comprising $200 of one time costs including recruiting costs, training, marketing and sales support and approximately $300 of investment in inventory, which is turned over again and again, generating earned income from sales.
The inventory loan remains outstanding as long as the Entrepreneur continues her business. From day one she generates income to support her family, and provides a return on the investment in one-time costs within one year. Every dollar invested in a Solar Sister Entrepreneur generates over $46 in economic benefits in the first year alone, through earned income for the Solar Sister Entrepreneur, and the immediate cash savings of her customers as they avoid the cost of expensive kerosene.
How can individuals support your work?
Solar Sister gives individuals an opportunity to join our mission. Individuals can make a lasting impact by making a social investment in a Solar Sister Entrepreneur of their choosing. An investment of as little as $25 through our website can make a difference when combined with other micro-investors. $500 provides a full ‘business in a bag’, the start-up kit of working capital, training and marketing support that empowers a Solar Sister Entrepreneur to earn much needed income to support her family, and establish a solar business that brings safe, clean solar light to her community. The donation is invested 100% in a Solar Sister Entrepreneur’s business.
When the Entrepreneur sells lamps, the money she receives is reinvested in new inventory, enabling her to operate an ongoing business and earning a sustainable income from commissions. In this way, a one-time gift is leveraged again and again. It is a social seed capital wherein instead of getting an economic return on the investment in a for-profit organization, the return is the sustainable social, economic and environmental benefits, leveraged for maximum impact.
What are your goals for the number of investments/projects in the next 5 or 10 years and how do you plan to meet those goals?
By creating a clear and direct avenue for investors to see their impact, Solar Sister is creating not just empowered entrepreneurs, but engaged investors. We provide the connection by letting the Entrepreneurs tell their own stories of success on our blog, our website and using social media outlets such as Twitter and Facebook. It is a compelling story and people respond generously, I think because they can actually picture the impact they are making.
Compassion is not a spectator sport, it needs to be followed up with real action. Solar Sister provides a concrete way to get involved that is meaningful and rewarding.
Solar Sister’s mission is to bring more and more women from the veils of smoke, darkness and anonymity to the forefront of a clean energy revolution. Today, there are 107 Solar Sister Entrepreneurs working in 10 teams reaching 34 communities in 3 countries – Uganda, Rwanda and Sudan. Solar Sisters are spreading the benefit of solar light to over 4,020 people. Women are eager for the opportunity to earn an income and contribute to their families. Our goal is to build a network of 5000 women entrepreneurs in 5 African countries over next 5 years.
Is it important for solar entrepreneurs to understand the environmental and health benefits of using solar over traditional fuels?
It is important for the Solar Sister entrepreneurs to understand and communicate the advantages of solar technology over traditional fuels through economic, environmental and health benefits in brings. Familiarity with the products, technology as well as effective communication skills to reach the target customers is vital for this. Solar Sister Entrepreneurs are trained in each of these areas.
But actually, the women are already experts in understanding the negative impact of burning kerosene and candles for light. They have a lifetime of experience that is more instructive than any book. The women will tell you about how the smoke from kerosene lamps turns the walls of their houses black, and they will tell you that it is also the reason their children cough at night. They are consumers of the life changing solar technology they sell which makes them the best sales force in the world. Our local staff and partner support the women through community training and outreach programs.
What is your business model?
Solar Sister is working to build a sustainable business that generates sufficient earned income to support ongoing operations at a scale that can deliver real impact across sub-Saharan Africa. Our model depends on scale to achieve profitability.
The financial contribution of each individual Solar Sister Entrepreneur is multiplied as we scale the program, enabling us to achieve overall financial break-even when we achieve a scale of 1,000 Solar Sister Entrepreneurs. A substantial investment in growth of operations through public and private donations will help Solar Sister achieve both scale that will provide break-even profitability and meaningful impact.
At scale the program will be fully self-sustaining, although in the initial period of high-growth, our operations will require donor support from public and private sources, including philanthropic contributions and crowdsourced funding to build capacity and ‘patient capital’ loans to provide working capital needs. Over time, the philanthropic support will be replaced by increasing earned income from operations.
Are there any mistakes that you made on this entrepreneurial journey that you would like to share with other green entrepreneurs?
Yes! Mistakes are part of the process. I think my ‘favorite’ mistake was not anticipating the pent up demand. In one community we showed up prepared to meet with 10 women who had been selected for the program. But when we got there, 48 women were seated in the room waiting for us. We had to scramble to accommodate them, but it was such a powerful illustration of the hunger for economic opportunity.
Solar Sister program has been built by listening to women, really actively listening to them, and understanding their needs. For example, women look at the solar and see light. Which sounds obvious, but is different than the men who look at solar and see technology. The women we talk to have immediate ideas, very practical applications, of what the solar light can do for them. Solar Sister entrepreneurs are the key asset of our organization. We work hand in hand with them as active participants in a business process and not as passive recipients of handouts. Strength of Solar Sister lies in treating rural women with dignity and respect while helping them build a better future for themselves and their families.
We have also learned that it takes patience and persistence to bring a new way of doing things to a community. There are early adopters who immediately get the program, and there are traditionalists who resist the change that the program represents.
We are learning that providing access to economic opportunity means providing it with an open hand, and letting women participate at their own level of engagement. For some women this is an immediate uptake and results beyond our expectations, and for other women is a slower acceptance. As we are scaling, our efforts are to use the experience gained so far to standardize our recruitment, training and incentive structures for a wider Solar Sister network. Often, communities are used to NGO give aways and we have to ensure a shift from this to ensure that Solar Sister is perceived as a business opportunity to empower women and their communities.
What advice would you have for other aspiring green and social entrepreneurs?
It is absolutely vital to engage with your customers and understand their needs and aspirations as it relates to the product or service you aim to provide as it is developed, instead of as an afterthought. Social Enterprises have a key role to play in solving some of the biggest challenges facing the world today but to do this successfully calls for the best practices from both the business and social sectors.
For example, modern communication and marketing tools are vital tools for today’s social enterprises. At Solar Sister, we believe that while statistics are important, it is all the more important to tell the story of faces behind those numbers. Storytelling is a very important component of our outreach efforts.
Solar Sister’s branding is anchored in both the functional and emotive needs of women entrepreneurs and their customers. Our success imperative is based on creating value for our customers by providing high quality and affordable solar technology, generating income and savings, being sustainable and accessible.