The problem
About 590 million
Africans live off the grid, according to a 2011 study by the International
Finance Corporation, an arm of the World Bank. Most of them rely on flame-based
lamps powered by fossil fuels like kerosene. The light from these lamps is dim
and comes with significant health and financial costs. A kerosene lamp may cost
less than $5, but fuel averages about $57 per year, or about $158 over the
lifetime of the lamp. Sub-Saharan Africans burn up about $10 billion annually
on kerosene, and worldwide, kerosene costs people without electricity $36
billion, according to the report.
People who are
dependent on kerosene not only have less money for food, clothing, education
expenses and other essentials, but also risk their health and even their lives.
Many of them also cook over open flames, and the combined indoor air pollution
generated by stoves and lamps is equivalent to smoking two packs of cigarettes
a day. Women and children suffer the most. The United Nations Development
Program and the World Health Organization report that 1.6 million deaths per
year in developing countries are caused by indoor air pollution from
traditional fuels. They also report 300,000 deaths every year from burns. Many
more lose their home to fires.
Solar lights can
completely eliminate the need for kerosene lighting, with little or no ongoing
costs.
The vision
A
$20 solar light can transform the life of a poor family in rural, off-the-grid
Uganda. Fueled by the unlimited power of the sun, solar lights replace
dangerous kerosene lanterns, freeing families from their toxic fumes, high risk
of burns and fires, and the burden of ongoing fuel costs. The brighter light
from an LED-based solar lamp allows children to study in the evening and gives
adults more time to work, boosting income and educational achievement. Many
solar lamps also charge cell phones, keeping a family connected to the world.
Even
though the solar lights pay for themselves in just five weeks, they have been
slow to catch on among the 1.3 billion people worldwide who lack access to
electricity. What’s getting in the way? Is it just the up-front cost? Lack of
credit? Are there other factors, such as poor distribution or mistrust of the
technology? And most importantly, how can we remove these barriers?
We
are three professors from UC Berkeley’s Haas School of Business who have teamed
up with a Ugandan economist to study ways to get rural Ugandans to upgrade from
kerosene to clean, sustainable solar lighting. We are partnering with BRAC, the
world’s largest nongovernmental development organization, which has an existing
micro-business program in Uganda.
All
funds raised will be used for our research costs, including the purchase of
solar lamps developed by Barefoot
Power. Our goal is to develop recommendations for nongovernmental
organizations or for-profit companies to quicken the rate the adoption of solar
lighting.
The project
This project grew
from Berkeley-Haas Professor David Levine’s past work to encourage Ugandan
cooks to switch from open-flame cook stoves to safer, more efficient models. The
efficient stoves cut fuel use in half and provide health benefits; but as in
the case of solar lighting, adoption has been frustratingly slow. One of the
biggest barriers is access to free credit, which is beyond the capacity of many
small retailers.
David tested a new
sales offer: everyone received a free trial, a payment plan, and the chance to
return the stove if didn’t work well. It was a success: 47 percent of those in
the study took the free stoves with only 2 percent returning them; compared to
a 5 percent adoption rate with the cash-and-carry offer. Read more about his research here.
For the current
project, David has joined forces with Haas professors William Fuchs and Brett
Green to test whether an alternative sales model can speed the adoption of
solar lamps. Ugandan economist Vastinah Kemigisha will lead the work on the
ground. The research team is already in the process of hiring and training 640
Ugandan women who are involved with a microfinance program through BRAC.
Our plan is to run a
controlled randomized trial in which we will give each woman in our test group
four $20 lanterns, which they can then sell for about a 20% markup. They can
then use the proceeds from their sales to purchase more lamps at $20 and slowly
grow their business. The test will be whether these women are able to sell the
lamps, and whether the lack of a startup barrier and the pay-as-you-go model
will incentivize the entrepreneurs to continue business. Each woman will be
responsible for her own sales, and if she is successful, she will build a small
business. We will also have another control group who will be offered the lamps
but without credit. Thus we can explore how our experiment affects the end
outcomes. Go to Indiegogo.com
