I had a chance to sit down and chat with Jeremy Leggett last week at the Skoll World Forum. Jeremy is the Chairman of SolarAid, a social enterprise that delivers solar solutions to rural Eastern and Southern Africa. SolarAid is one of a number of social enterprises that have emerged in the last five or six years that are taking advantage of advances in technology to create innovative solar power solutions for people who live beyond the reach of the power-grid. Others include SolarSister, d.light, and ToughStuff.
What is interesting about these organisations is that they are all working at the intersection of commerce and philanthropy. All are trying to create sustainable local businesses with solar technology but the difference lies in how philanthropy plays a role in their work. SolarAid, d.light, and SolarSister are registered non-profits that seek donations in various forms as seed capital to help local solar enterprises grow. ToughStuff alone appears to be a for-profit “triple-bottom-line” company that has a social and environmental mission.
Both ToughStuff and d.light are product-oriented organisations producing solar products uniquely designed for developing world challenges. SolarAid by contrast is more of a solution integrator, bringing products, financing, and supply chain together to enable rural businesses. Jeremy described their model as aspiring to be the CarPhoneWarehouse of the African rural solar industry.
When I asked him what the key barriers to the scale-up of rural solar solutions in Africa were, he emphasised the difficulty of finding and/or creating channels for distribution and financing. Like so many apparently technological problems, the big challenges are social, logistical, and organisational.
What struck me most in our conversation was the evolving nature of SolarAid. They started out as a typical non-profit relying on for-profit SolarCentury which donates 5% of its profits to SolarAid and support from traditional aid programs like USAID but now down-play the non-profit nature of their organisation. Tellingly, the SolarAid brand (with the philanthropic nature of the organisation embedded in the title) is no longer used in the field. They rely instead on their micro-franchise brand SunnyMoney which conveys a very different message in the title.
In addition, they are talking to micro-finance institutions to explore local financing solutions for solar entrepreneurs. When I asked whether they might actually evolve into a for-profit social enterprise in the future, Jeremy said they haven’t ruled out that possibility.
A tipping point seems to the provision of entrepreneurial start-up capital as a grant or a loan. There is a tension here between wanting to lower the barrier for would-be entrepreneurs and increase the spread and uptake of solar technology versus the danger of creating dependencies through grants or worse distorting the market for solar solutions. The reality though is that all markets are distorted in one way or another. Perhaps the key is not to focus too much on whether the market is distorted or not but rather on what a healthy ecosystem for the market looks like and how to move in that direction. Viewed from this perspective, it is easy to see the virtue and appeal of an organisation like SolarSister that combines social enterprise and women’s empowerment to great effect.