What would our world be like without electricity? Most of us have experienced at least one power-cut and had a glimpse of living without light and power for a few hours or even days. But for 1.5 billion rural people in the developing world, this is their reality, day in, day out.
Affected communities are often extremely isolated, requiring hours of travel through difficult terrain on under-developed roads, meaning that utility companies are unwilling to make the large investments required to reach them. Being marginalized from the national electricity grid results in dire consequences for human development, encouraging high levels of illiteracy, extreme poverty, disease and social stagnation.
Quetsol’s Solar Kits: Improving Health & Wealth of Poor Communities
In Guatemala, Central America, co-founders Juan Rodriguez and Tono Aguilar launched Quetsol to change this situation for thousands of rural communities. Quetsol is a renewable energy company (and a Certified B Corporation) whose mission is to improve human development through the provision of low-cost solar electricity kits. Since its inception in 2010, it has distributed over 3,000 kits to households throughout Guatemala and built a special relationship with the communities it serves.
Unlike many solar companies, which focus on product development from their offices in the developed world, Quetsol works to establish a presence within each community - allowing them to learn from their clients and adjust.
And the model has proven very effective. Regular surveys and impact assessments show that key development indicators such as education and wealth are improving as a result of solar power. Ninety-six percent of customers report saving money and 70 percent of families confirm their children study one-to-four hours more per day. Customers also report less burns from kerosene lamps and the generation of extra income by charging neighbors a small fee (approximately US $0.25) to charge their cell phones.
Quetsol’s Community-Based Model: Pay-As-You-Go
So how does this community-integrated model work in practice? Customer input is currently spearheading an exciting change. Until now, Quetsol has followed a pay-for-ownership model with nearly all of its clients, using microfinance partners (MFIs) to pay for kits in small increments.
However, these MFIs have become a bottleneck due to the difficulty of processing loan applications. In response, Quetsol is launching a new Pay-As-You-Go (PAYG) solar power unit, allowing rural families who can’t afford to purchase the kits outright to buy solar energy as they need it -- either in daily, weekly or monthly instalments -- from local shops in exactly the same way they currently buy mobile phone credit.
The company retains ownership but installs the panels on the customer’s home. Once a payment is made, an activation code is issued to be entered directly into the solar kit, creating renewable energy on demand.
PAYG Ends Reliance on Loans, Boosts Flexibility
As well as removing the reliance on loans, the new PAYG model provides much needed flexibility. Poor families face a great deal of uncertainty and must make difficult decisions about where to spend their money daily. Quetsol’s customers, therefore, value having more choice of how and when to buy their electricity.
Right now 32 families are participating in the first PAYG pilot, trying the new payment method and providing valuable input on improving the kit design. By listening, learning and working together, communities and companies can together overcome enormous obstacles to development -- and this community is learning to thrive on this principle.
This is just the start, of course. Quetsol hopes its efforts can lead the way in developing a new generation of utility companies that support rural development and protect the environment. Like its fellow B Corporations, Quetsol hopes to truly redefine success in business.
Kudos For Quetsol
Quetsol, along with 66 other companies, was recently recognised as “Best for the World” for creating the most positive overall social and environmental impact. The B Corp Best for the World List honors those businesses that earned an overall score in the top 10 percent of all Certified B Corporations on the B Impact Assessment, a comprehensive assessment a company's impact on its workers, community, and the environment.
Katie Kerr is a Communications Associate at B Lab, a nonprofit organization that serves a global movement of entrepreneurs that use the power of business to solve social and environmental problems. Her work has appeared in publications including the Harvard Business Review, Fast Company, and Forbes. Please follow B Lab on Facebook or Twitter for all the latest news.