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June 06, 2011

Solar Demonstration Centers, Disruptive Innovation, and Decentralized Renewable Energy Deployment

Sociological models show that for disruptive innovations technological adoption tends to proceed from a small subset of consumers (innovators and early adopters) to the more conservative majority once a certain momentum has been built. The gap between the early adopters of a new technology, and the early majority, can be the most important, and significant, barrier to widespread adoption. Overcoming the social and psychological barriers inherent in this barrier is the key to the fortune at the bottom of the pyramid. More importantly though, it is the key to creating a new standard for the market place – decentralized renewable energy – capable of finally delivering clean energy access to billions around the world.

DiffusionOfInnovation

The difficult task of bridging this gap for renewable energy is magnified in BOP markets by the grinding reality of poverty. First and foremost scarcity of disposable income leaves most consumers extremely risk averse. A situation that has been exacerbated by decades of donor driven off-grid renewable energy programs and the dumping of cheap, low-grade goods that has created false perceptions of renewable energy in many markets. Given these difficulties, and the nature of disruptive innovations in general, targeted interventions capable of building momentum to overcome the gap between early adopters and the early majority in off-grid populations is imperative.

An exciting example of such an intervention is the newly inaugurated E-1 Solar Demonstration Center in Ujire, Karnataka, which offers an innovative prototype for replicable interventions aimed at building momentum and reducing perceived risk. The center is a partnership between a foundation (Halloran Philanthropies), a social entrepreneur (SELCO-India) and an NGO (Sri Kshetra Dharmasthala Rural Development Project -SKDRDP ) that functions as a demonstration, awareness raising, and consumer research center for renewable energy services for the poor. The E-1’s services include: 1) Mobile phone charging, 2) Lighting services including lanterns for household use and charged batteries for street vendors, and 3) The provision of purified water (already as much as 1,500-3,000 litres daily).

The E-1 is conveniently located in a high trafficked rural area near a temple town that can see anywhere from 30,000 to150,000 pilgrims (depending on the season and holiday) each day. The explicit link to regular patterns of social movement (i.e. going to temple and dropping your mobile off to get recharged) provides a unique opportunity for reducing perceived risk and increasing the visibility of renewable energy for consumer segments not yet familiar with renewable energy.

Solar Demonstration Center from Justin Guay on Vimeo.

Building and maintaining a fleet of rural renewable energy demonstration centers like the one in Ujire could be an ideal way to increase consumer adoption of renewable energy in rural areas worldwide. In sub-Saharan Africa for example, the World Bank’s Lighting Africa program, which has helped organize the off grid lighting sector by setting quality standards, providing technical assistance and organizing annual conferences, could provide financing for a fleet of demonstration centers in off-grid areas. This fleet could promote the most highly performing products and reinforce the technical standards and quality assurance branding embodied in the program (much like the energy star program in the US).

Such a fleet, coupled with broader policy support for enabling environments - like creating stable supply chains, support for products and services that increase income generation and productivity, training institutes to impart generalized broad-based technical skills, and the provision of appropriate financing – would undoubtedly generate much needed momentum for renewable energy adoption and energy access worldwide.  In fact, such enabling environments leave only one question to ask: which innovative business and financial models will deliver clean energy services to the next billions?

-- Justin Guay, Sierra Club International Program

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